Apple’s Subscription Bundle Draws Criticism

Apple’s hopes of creating a super-bundle of media content for one flat monthly fee have run into early opposition, with some record labels nervous about the prospect of offering their music for a lower price.

The iPhone maker has recently approached the big music companies about bundling together Apple Music and Apple’s upcoming television service, but the two sides have not yet discussed a pricing formula, said people familiar with the negotiations. Talks are at an early stage, they added.

While some labels are open to the idea, people at one big record company said they had concerns, and that the industry was growing more wary about its relationship with Apple, which strong-armed labels a decade ago into selling individual songs for $0.99 on iTunes. Executives fear that margins may be hurt if Apple undercuts the $10 monthly price that Spotify, Apple Music and others charge.

Apple TV+, a streaming video service, launches on November 1 and will cost $5 a month, in an effort to undercut its rival, Netflix. Analysts have suggested that Apple would eventually create a super-bundle for the 420m people who subscribed to some Apple service in the past year. Such a bundle could have several tiers, including apps such as News+, which aggregates magazine and newspaper content for $10 a month, or Arcade, which offers more than 100 games for $5 a month.

Apple could offer consumers a bundle of Apple Music and Apple TV+ at $13 a month, for example, without compelling music rights holders to offer a discount. While Apple has to license music rights from the record labels, it owns the rights to content on its video streaming service and does not have to share revenues.

Analysts said the company was more interested in building a huge number of subscribers than in short-term profit.

Source: Financial Times