On Apple Buying Beats

Yesterday morning my piece on how Apple should open iTunes as a way to change the future of streaming was published. In the afternoon it was reported that Apple is close to buying Beats–both the headphones and streaming music service.

Here are a few things worth considering.

Apple doesn’t need Beats to get streaming music rights.

The streaming rights negotiated to specific services don’t transfer in acquisition deals, so the deals Beats has in place wouldn’t benefit Apple.

There are plenty of streaming music services (too many?) so another one getting the streaming rights wouldn’t likely be an issue.

Also, as announced on the recent Apple earnings call, iTunes has 800 million accounts. The labels know that if they don’t negotiate a deal Apple could open direct access to the music store and encourage artists to bypass the record labels altogether.

Isn’t this the end game the labels were ultimately afraid of as iTunes rose to become the world’s biggest music store? Also part of the reason why record labels were aggressive about making deals with other digital stores/streaming services.

Misc

Trent Reznor is Beats’ chief creative officer. This is partly an attempt to focus on being artist friendly.

Beats is the only streaming service with no free tier. (Free trial, but no free tier.)

It’s trying to be the most mainstream friendly and was the first to partner with a carrier to bundle music costs with your monthly phone bill.

Beats has an Android app.

Ungrounded Wild Speculation

What if Beats music was always going to be bought by Apple?

Having a music service built from scratch (from MOG) and then road tested with the public is a desirable thing. Beats is always a good cover because it’s a company that doesn’t compete with Apple, but still has reason to built a streaming music service.

Since the reaction to this deal has largely been, “what?/why?” It might makes since that Apple leaked the info to give people time to talk it out amongst themselves.

 
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