The logic of Apple’s argument, relayed by people who’ve heard the pitch secondhand: Apple’s best iTunes buyers spend about $60 a year on downloaded music — $5 a month. So if subscription services dropped that low, any download buyers that switched over to the streaming model would generate just as much revenue for the music labels. And, more important, the market of potential subscribers would get much larger.
Re/code doesn't believe that labels will get on board with a 50% price cut; even though, Spotify has just negotiated such a deal for additional family members. However, its likely that they would consider a smaller cut. Perhaps to $8/month.
Apple may also be planning to rebrand the Beats Music service in February, presumably timed to the Grammy Awards, which are being held on February 8th.