The news comes as iTunes downloads have taken a sharp drop. Since the start of the year, digital music sales are reportedly down 13-14%. That's much worse than the 2.1% drop last year.
The plummeting download numbers help illustrate why Apple bought the $10-a-month subscription streaming service Beats Music earlier this year, as part of its $3 billion acquisition that included headphone maker Beats Electronics. Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter.
The Recording Industry Associate of America says that revenue from U.S. download sales fell 12% in the first half of 2014; however, a 23% jump in paid-subscription service revenue resulted in a slight overall increase in digital revenue to $2.2 billion.
Apple reported that iTunes sales in its third quarter were $4.6 billion, up $0.3 billion year-over-year. However, it did not break out music sales from apps and other media.
Recent reports suggest that Apple wants to relaunch Beats Music with a lower subscription price. Apparently, it's asking labels to cut the price in half. That may be difficult to achieve. It's suggested that perhaps they'll get the price down to $7-8/month from $10/month.
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