UPDATED 00:32 EST / JUNE 09 2015

NEWS

Streaming wars: Spotify may match Apple Music’s family plan price

Streaming music service Spotify AG has responded to the launch of Apple’s new and very uninspiringly named Apple Music service by suggesting it may match prices on family plans.

Apple Music was revealed at Apple’s World Wide Developers Conference Monday, and while the spiritual successor to Beats Music, the streaming service it acquired along with the Beats hardware business for $3 billion in 2014, the service is really nothing exciting at all, except for one possibly market influencing difference: price.

The standard one user package on Apple Music is $9.99 per month, the same price as offered by Spotify in the United States, however the Apple Music family package, which caters for six users, is only $14.99. By comparison Spotify offers a 2 user plan for $14.99, or 5 users for $29.99, double the cost being offered by Apple.

“We already have similar family pricing in some markets and we expect to offer competitive pricing everywhere in the near future,” Spotify’s Global Head of Communications and Public Policy Jonathan Price told The Verge, confirming that the company will move to match Apple’s pricing with this product.

Price war?

The interesting aspect of Apple’s family plan is not just the low price, but the fact they were able to get away with offering it.

While Apple’s service doesn’t offer a free version, as Spotify does, and probably to the delight of the music industry, the $14.99 pricing equates to $2.50 a user, and that’s well below what the music industry has previously indicated that it wants charged per head. Sure, it’s not free, but given the economics around Spotify’s ad-supported free service, there’s no exactly a huge financial difference between the two.

If Apple is instead subsidizing the service and the music industry didn’t acquiesce, could Apple intentionally be triggering a price war to put pressure on its competitors?

There’s no guarantee that Spotify will even be able to match these prices; if the music industry doesn’t agree to the price drop, Spotify isn’t in a position to run a service like this at a loss, whereas Apple could.

Apple Music will be available on iOS and Apple devices June 30, with Android and Windows Mobile support to follow in the fall.

Spotify, of course is available now, and the paid package works a treat.

Image credit: mager/Flickr/CC by 2.0

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