While Morris did not reveal any details about Apple’s pricing plans, he made a point of saying that he prefers paid models to ad-supported ones.
Apple’s current iTunes Radio service is ad-supported for users who haven’t paid for iTunes Match. It’s thought that the new streaming service will include significant curation from popular artists.
The company’s Beats acquisition is likely to have been helpful in negotiations with the record companies as it brought industry power player Jimmy Iovine into the fold, along with the Beats Music service.
Morris – who worked for Iovine for nearly 40 years – praised the executive and Apple’s foresight in getting him on board. He said he expects the new streaming service to represent a “tipping point” for the industry and continued:
What does Apple bring to this? Well, they’ve got $178 billion dollars in the bank. And they have 800 million credit cards in iTunes.
Spotify has never really advertised because it’s never been profitable. My guess is that Apple will promote this like crazy and I think that will have a halo effect on the streaming business.
Sony owns a 5.8 percent stake in Spotify and a version of its contract with the service was leaked last month.
Despite the major labels having a financial stake in Spotify and its recent round of updates and new features, I suspect its CEO Daniel Ek will be nervously watching the WWDC keynote.
If Apple can deliver a compelling streaming service, that arsenal of existing credit card details and its huge war chest, will give it a huge advantage even other entrenched incumbents.
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