Another less aggressive strategy would see Apple ride out iTunes sales for the next three to four years.
It’s not a question of if but when Apple will phase out its online music store in favor of Apple Music, the company’s year-old streaming-music service, Paul Resnikoff for Digital Music News reports, citing sources with active business relationships with Apple.
Apple subsequently told Recode that the Digital Music News report was “not true,” but would not eleaborate.
Still, with the music download business in decline, many industry insiders are wondering how Apple will deal with the shift.
One possibility is that Apple would phase out iTunes sales in streaming-friendly countries like the US and UK first before phasing the online store out in “tier 2 and tier 3” countries later.
But some within Apple are determined not to let Apple Music undermine its profitable download store, Bloomberg reported earlier this month. The iTunes store reportedly generates nearly as much as three times the revenue as Apple Music.
It seems as if there’s an internal conflict brewing in Apple’s music division, and all signs point to veteran record executive and Beats cofounder Jimmy Iovine, a rising power within Apple whose title is simply “Jimmy.” iTunes and other online services are overseen by Eddy Cue, a senior vice president.
According to Bloomberg, Iovine and other executives from Beats have pushed for Apple to “deemphasize iTunes and plow money into the on-demand streaming service that Beats built.”
And when Apple goes to music labels asking to renegotiate its deals, it sounds likely Iovine will lead that effort. Resnikoff writes:
On that front, top Apple Music executive Jimmy Iovine, a longtime fixture [at] Universal Music Group before migrating to Apple Music, could play a key diplomatic role in the termination and transition.
Apple is expected to unveil a big update to Apple Music at its annual developers conference in June.
The whole report is worth a read at Digital Music News.
This article was originally published on Business Insider. Copyright 2016.
