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Love free stuff? Then you won’t like Apple’s new music subscription service, which the company is expected to launch later this year. Apple is planning to launch the service without a free tier, and instead plans to charge every user after a limited free trial, according to a Recode report.
That’s similar to Beats Music, which Apple got its hands on as part of the $3 billion Beats acquisition last year. But it’s very different from Spotify, the current industry leader. Spotify has 15 million paying users worldwide, and at least 45 million additional users tune into the service’s free, ad-supported tier.
Spotify’s ad-supported tier has been so successful that competing services have started to embrace free music as well. Rdio, for example, long resisted giving music away for free, but the company now has a free radio service that aims to pull in users, with the goal of eventually converting them into paying subscribers.
However, Recode reports that label executives are increasingly growing frustrated with those free tiers, with some blaming them for the decline in music downloads. Apple wants to counter that trend with a $8 service, which is expected to be closely tied into iTunes and iOS.
Some in the industry would also question that notion, and instead argue that there are simply different price points for different types of users. Rhapsody has been trying to win over budget-conscious users with a $5 radio tier that is essentially like a Pandora without ands, and Deezer has started to charge audiophiles as much as $15 per month for lossless FLAC streams.
Deezer North America CEO Tyler Goldman told me at CES this year that he doesn’t believe in just one package and price for every type of user. Tyler Goldman “That silver bullet strategy doesn’t work,” he said.