Apple Music will be paid-only—but Spotify's 'freemium model is super successful.
By Jack Linshi, TIME
The attorneys general of New York and Connecticut are investigating Apple and several major music labels to determine whether their negotiations over Apple’s AAPL newly unveiled streaming service, Apple Music, violated antitrust law.
Eric Schneiderman of New York and George Jepsen of Connecticut are probing whether the tech giant pressured the labels, or whether the companies conspired with one another, to stop supporting “freemium” rival services like Spotify, the New York Times reports.
Since Apple Music will be available with a paid subscription, its most powerful competitor is Spotify, which offers both a free tier and a paid, premium tier. Spotify’s free tier has thus far proven more appealing to listeners: Of its 60 million users, only 15 million have purchased the premium tier.
Universal Music Group confirmed it was cooperating with investigators, but denied that it had colluded with Apple, according to a letter sent by the label’s attorneys to Schneiderman’s office. The label also said it had no agreements with Sony Music Entertainment or Warner Music Group to “impede the availability of third-party free or ad-supported music streaming services.”
The investigation arrives on the heels of reports that Apple had pushed music labels to stop renewing Spotify’s free tier streaming license and, according to The Verge, officials at the Justice Department and Federal Trade Commission have been interviewing high-level music industry executives about Apple’s behavior.
Apple Music will launch in more than 100 countries on June 30. The service, which is free for the first three months, will cost $9.99 per month or $14.99 for families (up to six users).