Apple has been pushing the labels for more extensive price cuts. It wants to relaunch the Beats Music subscription service it bought last spring next year, and industry scuttlebutt is that it’s trying to get the price cut in half, to $5 a month.
The logic of Apple’s argument, relayed by people who’ve heard the pitch secondhand: Apple’s best iTunes buyers spend about $60 a year on downloaded music — $5 a month. So if subscription services dropped that low, any download buyers that switched over to the streaming model would generate just as much revenue for the music labels. And, more important, the market of potential subscribers would get much larger.