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Apple Music is launching in China, and it’s insanely cheap (AAPL)

Apple China

Apple’s music streaming service is launching in China, the company announced on Wednesday. And it’s insanely cheap.

In the US, Apple Music will set you back $9.99 a month, or $14.99 for a family plan. In the UK, it’s the exact same figures (making it slightly more expensive) — £9.99 for standard, £14.99 for a family.

In China, meanwhile, it’s going for radically less. It’ll cost just 10 RMB per month for a single membership.

That’s around $1.60, or £1.

Apple launched Apple Music at the end of June in the US, the UK, and over 100 countries — but not China. The Asian nation is an increasingly important market for Apple. It launched an aggressive retail expansion in China at the start of 2015, and its smartphone business has grown 75% year-on-year in the country — even as the broader industry declines. It’s now Apple’s largest market in the world for app downloads.

The lower price makes sense from a commercial perspective: The Chinese average GDP per capita is significantly lower than in the US and other developed economies — $7,500 in 2010-2014, versus $55,000 in the US. Chinese consumers don’t — on average — have the same disposable income, and may blanch at the Western price-point.

Back in June, before the launch of Apple Music, analyst Neil Shah from Counterpoint told The Wall Street Journal that “In Asia, the pricing needs to near free or around $2-$5 per month to hit the sweet spot.” Apple has managed to offer its product for significantly less than that.

That said, the low price point could reignite the debate over appropriate compensation for artists. Over the last year, whether streaming services — particularly free, ad-supported ones — appropriately compensate artists for their work has been a frequent topic of discussion (although compensation levels are often down to an artist’s individual contract with their label). It’s questionable how much Apple will be able to pay out to labels and artists based on streams of customers who are paying Apple a tenth of what British subscribers are.

In a statement, Apple boasts about both local artists as well as mainstream international stars on Apple Music. “Launching with millions of songs in its catalog,” it says, “Apple Music in China features music from artists including Eason Chan, Li Ronghao, JJ Lin and G.E.M., as well as a wide range of international artists including Taylor Swift, Ed Sheeran and many more.”

Chinese customers are also offered a free three-month trial to test out Apple Music, just like Apple has done in other markets.

Apple Music isn’t the only product rolling out to China today. The Cupertino company is launching iTunes Movies, offering films to rent or buy for 5 RMB and 18 RMB respectively ($0.79 and $2.80, or £0.50 and £1.90). iBooks, its ebook store, is also becoming available. Prices will start at 0.5 RMB ($0.08, or £0.05).

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Source:: Apple Music is launching in China, and it’s insanely cheap (AAPL)

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