Apple is expected to announce a new music streaming service next week that, if successful, could cannibalize its own music download business.
The service, which is expected to cost $10 a month, will join a very competitive market full of other streaming services and Internet radio players, like Spotify, Pandora and Rhapsody. Amazon also offers a streaming music service, although it bundles it together with its $99 annual loyalty program.
The Wall Street Journal reports that the announcement is expected to occur next week at Apple’s Worldwide Developer Conference, which kicks off with a keynote on June 8.
Unlike other music services, Apple’s is not expected to provide a free, ad-supported listening tier, according to sources familiar with the company’s plans. Instead, it will offer that through iTunes Radio, which will be updated to include programmed channels, hosted by real DJs.
A year ago, Apple first showed it was interested in the streaming music market when it acquired Beats Music for $3 billion. In addition to the company’s high-end headphones, it got a music service and lots of industry connections through its co-founder Jimmy Iovine.
The Wall Street Journal suggests that providing the music streaming service at a cost of $120 could be more lucrative than its current download business today, and that Apple may even take the extra step to encourage customers, who are about to purchase a new album, to sign up for the service instead.
Still, consumers will require a robust catalog and good user experience to make the switch.
As of right now, sources say Apple hasn’t closed deals with the three biggest global music companies, Universal Music Group, Sony Music Entertainment and Warner Music Group. If some of those deals don’t come through by next week, it could delay the launch, but those negotiations are expected to wrap up shortly.
In addition to a new streaming music service, Apple is also rumored to be debuting a new Apple TV set-top box, a streaming TV service, and updates to HomeKit and Apple Pay next week. iOS 9 and OS X 10.11 will also be announced, reports MacRumors.com.