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Apple to music labels: $10 a month for streaming is too high

The company wants to revamp its deals with major labels so it can offer its Beats Music streaming service for a lower price, according to a report.

Beats Music Apple/Beats

Apple is meeting with music companies to rework deals and reduce the cost of its subscription-based streaming music service Beats Music, a new report claims.

Apple is holding discussions with major music labels to establish new rights and features for a new version of Beats Music, Recode reported Thursday, citing people who claim to have knowledge of the company's plans. The deal would create a new framework for labels to get paid for streaming tracks while also making it more economically feasible for Apple to reduce the service's cost from its current $10 per month, the report claims.

Apple declined CNET's request for comment on the matter.

The relationship between digital music and major labels has been strained. Starting in the 1990s, digital music has hurt traditional music sales in the CD space, and few companies have been able to navigate licensing deals with labels without getting some scratches and gashes along the way. Apple has had its share of run-ins with record labels, though the relationship has improved in recent years.

For streaming services, labels have inked deals that require companies, like Rhapsody and Spotify, to charge $10 for their premium services. Apple wants to change that for Beats Music and potentially gain an upper hand.

Apple closed its $3 billion Beats acquisition in August. The company made no indication at that time what it had planned for Beats Music, but the service is still operating. Recent reports have suggested that Apple could do everything from scrapping Beats Music entirely to simply modifying it. The latest report suggests that changes are coming to Beats Music, but they won't occur until next year, giving Apple ample time to negotiate with the labels.

For now, it appears Apple's main focus is on Beats Music, but the company also operates its own free, ad-supported iTunes Radio. It's not clear whether that service had made its way into the conversations yet.