Apple Streaming Service Coming Today? JPMorgan Answers

In a report published Monday, JPMorgan analyst Rod Hall maintained an Overweight rating on Apple, Inc. AAPL. The company is likely to be mulling a reduction in app store fees for subscriptions, while unveiling its music streaming service on Monday. "Apple is reportedly planning a departure from its pricing formula in a change that would cut the 30 percent fee that media companies pay on subscriptions. Apple is discussing new commercial terms with media companies to alter its 70/30 Apple tax," Hall reported. The improved terms, which are in still being discussed with media firms, is expected to be applied to Apple's revamped platforms, including Newsstand and its TV updates, while the terms for the existing Apple Store would be left unchanged for developers. "We suspect that these reported better terms stem from Apple's recent negotiations with video content owners who we believe are demanding relatively onerous terms of Apple in return for content rights," the JPMorgan report stated. In addition, CEO Doug Morris of Sony Corp's SNE Sony Music confirmed that Apple would unveil its streaming music service during the keynote address at the WWDC. If the company does unveil this service, the analyst believes that the main surprise would be "the way that Apple engages its platform with artists given the artist-centric influence that we believe Beats founders Jimmy Iovine and Dr. Dre have likely encouraged at Apple."