Apple Streaming In The Works

Apple is working with Beats to debut a subscription streaming service of its own, according to the New York Times, and sources reportedly close to the matter say Trent Reznor is heading up the efforts.

Reznor served as chief creative officer for Beats and now he’s playing point man on a redesign of the iPhone’s music app that will include the streaming service, the sources said.

Apple’s plans also reportedly include enhancements to iTunes Radio and access to some albums before they’re available elsewhere.

Apple’s streaming service won’t come with a lower price tag than competitors, however, and will not include a free tier.

The company recently tried to secure reduced music licensing rates in negotiations with major labels that would have allowed for lower monthly subscription costs than the standard $10 per month, the Times said.

It was a no go. Financial analyst Toni Sacconaghi told the paper Apple doesn’t hold the same leverage it once did with the music industry.

“They’re used to being a shaper rather than a responder,” Sacconaghi said. “This is one of the few times where Apple is playing catch-up and not necessarily coming from a position of strength.”

Still, he added the streaming service is likely to make up just a tiny portion of Apple’s business.

If Apple streaming generated revenues on par with Pandora of roughly $1 billion per year, that would still be less than half a percent of Apple’s $183 billion in revenue, Sacconaghi said.