Drake, Pharrell, involved in Apple’s new music strategy

Drake and Pharrell Williams are confirmed to be involved in Apple's music relaunch, say various sources involved in the negotiations.

It is not known what roles they will play. Most likely they’ll be permanent guest DJs on the rebooted iTunes Radio, which will be unveiled alongside the Apple Music streaming service next Tuesday (June 9) at its Worldwide Developers Conference in San Francisco.

Reports that Drake was offered US$19 million are denied by his reps. Drake had been in discussion with Jay-Z to come aboard TIDAL as part of the 16 superstar owners. But he suddenly broke off negotiations. Williams too had been in discussions with TIDAL.

David Guetta and Q-Tip are others approached by Apple. Another superstar, Dr. Dre, already works for Apple after it bought his Beats Electronics.

The use of A-list names would also be Apple’s way to offset TIDAL’s push for exclusive content from record labels by using superstar names as Jay-Z, Beyonce and Madonna, who are co-owners.

Speculation is Apple will offer its streaming on the same devices where hundreds of millions of iTunes customers have their credit card details registered. Those who click to download a song will also be offered a streaming option.

When iTunes launched in 2003 with 26 million songs, it revolutionised the way consumers bought their music. By February 2013 it had sold 25 billion tracks.

Last year streaming rose 45% (to a revenue of $1.6 billion) while downloads were down 8% to $3.6 billion.

Apple’s challenge is that it rules the world when it comes to downloads. It is estimated to have 80% to 85% of that market globally, with 15,000 songs downloaded per minute.

But with streaming, it has to take on Spotify which has 86% of that market in the United States and probably a similar share in the international market. Apple will charge $10 a month while Spotify has free and paid tiers.

Spotify has a head-start of seven years on Apple, reportedly turning over $1 billion last year. At the end of 2014, it had 15 million paying subscribers, plus around 45 million free users.

For the iTunes Radio redesign, Apple brought on board Trent Reznor and BBC Radio’s Zan Lowe.

Its main rival Pandora is only available in the US, Australia and New Zealand. In March 2015, it had more than 79 million active users. Last year, it posted a loss of $30 million on about $921 million in revenue last year.