Apple is pressuring every music label to release all new tracks exclusively through its iTunes store, in a move that presents a major threat to streaming services like Spotify.
Executives at the iPhone maker are reportedly pushing for an “exclusive window”, so that iTunes would be allowed to offer new releases well before its rivals. The model echoes the way that television companies like BSkyB pay to be able to show major releases ahead of the competition, and would help Apple to reassert its dominant position in the digital music market.
The Californian technology giant revolutionised the music industry in the early 2000s when it launched the iTunes music store, with a flat rate of 99 cents a song. For the first time, the system made it easier to buy digital music than it was to download tracks illegally, helping to reduce piracy at the same time as handing Apple a hugely powerful position and around 80pc market share.
However, a newer wave of streaming services has emerged over the past few years, and threatens to chip away at Apple’s dominance, by offering consumers a legal way of accessing music that is even easier than buying individual tracks, (streaming).
Services like Spotify, Beats Music, Deezer and Apple’s own iTunes Radio, allow music fans to stream songs over the internet for free, or for a very modest monthly fee if they don't want any adverts.
These companies have built a considerable following, although they have received mixed reviews from the record companies themselves. Some hugely popular artists receive more than half of their royalty income from streaming. However, many music executives claim it is much harder for smaller artists to gain traction. Last year, Thom Yorke and Atoms for Peace pulled certain tracks from Spotify in protest over the service, which they claimed was unfair to new artists.
The simmering controversy offers Apple the opportunity to launch its latest charm offensive, and persuade record labels to ensure certain tracks are only available on iTunes.
Many record producers will be quick to get on board, partly because they think Apple is the only music retailer big enough to make 'music streaming' mainstream.
However, others are afraid of handing Apple even more power, and would prefer to see iTunes co-exist alongside other several services.
Either way, Apple’s attempt to change the rules marks a major blow to Spotify at a crucial time for the business. Speculation is mounting that the Swedish music business is preparing to file for an initial public offering in New York.