Dive Brief:

• Apple Inc. plans to bundle its Beats music streaming service into iOS (although it will likely be rebranded to iTunes somehow), making it the first paid service to be preinstalled on its phones.

• Apple acquired Beats Electronics, including the streaming service and the headphones, last summer for $3 billion. Sources say the tech giant is considering offering a subscription service for $5 a month. Beats, like other streaming services including Spotify, Google Play, Rdio, and Pandora, now offers a $10 per-month premium service. Some have ad-supported free versions.

• Meanwhile, Sony Music said Tuesday that it is looking closely at the value of free music streaming services, prompted by pop musician Taylor Swift’s move to pull her entire catalog from Spotify. 

Dive Insight:

Apple is reportedly trying to work with music labels to enable it to offer the Beats/iTunes streaming service at half its current monthly rate. But that may not fly, considering the precedent that Taylor Swift has set recently.

Musicians and music labels may be about to start a new game of hardball and demand compensation that could help them make up for falling direct sales of their music. And that could disrupt the music streaming world just as it was beginning to disrupt retail CD and digital download sales.