Saturday 22 October 2016

Apple Music is now being bundled into phone contracts

Christopher Williams

Published 26/08/2016 | 08:01

Year-old Apple Music service to get a new look this summer
Year-old Apple Music service to get a new look this summer

BT’s mobile arm, EE, has become the first British operator to bundle Apple Music with mobile contracts in a move to designed to increase subscriber loyalty and help the iPhone maker’s music streaming app challenge Spotify.

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The service will be offered free for six months with a new contract for EE pay monthly customers, double the three-month free trial otherwise provided by Apple. Afterwards users will pay the normal subscription charge, currently £9.99, via their mobile bill.

The deal is the latest in a push by EE to bundle media services with mobile subscriptions. It follows earlier moves by Vodafone, which offers six months of free access to Spotify or Sky Sports with new contracts.

EE also offers subscribers six months of free access to the BT Sport channels on smartphones and tablets, in one of BT’s first attempts to capitalise on its £12.5bn takeover of Britain’s biggest mobile operator. The giveaway has enraged rival Virgin Media, which pays more than £120m per year for wholesale access to BT Sport.

As well as increasing revenues once offer periods expire, EE is hoping that subscribers will be more loyal if they take media services on top of their mobile package. The operator will face intensified competition later this year when Sky launches its mobile network, based on a wholesale capacity deal with O2, which is likely to be aggressively priced and exploit its television rights.

Allowing mobile operators to collect Apple Music fees on its behalf is meant by Apple to accelerate take-up of the service, which was introduced last year.

The Silicon Valley giant is rapidly catching up with Sweden-based Spotify, which has built up a base of more than 35 million paying subscribers. In June Apple said its services had 15 million subscribers.

EE said that Apple Music usage will count towards subscribers’ data allowance. As with its BT Sport offer, the operator has rejected a global trend for “zero rating” of bundled media services. In Australia for instance, Telstra offers a similar Apple Music bundle, but with unlimited streaming.

EE refused to discuss the terms of its deal with Apple, such as whether it will retain a share the Apple Music revenues it collects, citing commercial sensitivities.

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