1) I'm not making any absolute claims as to what Apple is or interested in. If you wanted to state that as opinion it was easy enough, "In my opinion I don't think Apple is interested in the hardware sales."
2) It read to me as if you were ignoring that when you answered a comment about the growth of Beats Music in a month with the entire rumoured sale of the company for $3.2 billion.
1. Take it as a given.
2. I haven't ignored it but we've had this conversation before about what Apple is capable of doing themselves for $1-2 billion as opposed to buying a company. I really really don't think that Apple is going to keep the HW. It's not in Apple's business model. They dumped that type of merchandise over a decade ago. The question I am seeing, is Apple going to get enough back from the HW to make the fledging music service worthwhile at any price.
To me this just doesn't seem to fit Apple's mo. Apple buys fledging stand-alone companies at comparatively cheap prices. This is a dual company and it's not cheap, imo, if Apple is only considering the streaming service. IMO, if Cook wants to get into the accessories market again, then he's nuts... at almost any price.
so what they converted trail users into paying users in a short period of time. I bet if you look at other similar services they saw the same thing initially. The real question is what are the stay power to these paying subscribers. Not like Cable TV where most people only have one choice. How long before these people move on to the next great thing.
I suspect most of these people beating the Beat door down have been married to over service many times over and they have no loyalty.
Not sure how you can combine the words "impressive" with 110k users. That is 0% compared to iTunes 500 million accounts.
AOL had great numbers too. This is just trendy crap.
Apple drove sales of Beats headphones as they were in the stores not the other way around. . Now I see it was because of Lovine's fruendship with Jobs that they were sold there. . I always wondered why such crap was for sale at Apple stores.
I think all Apple really had to figure out is to go to the same record distributors they already have deals with and sign them so they can have whatever out of their existing catalog for a subscription service model and then all Apple would have to do is link different royalty rates depending on whether the song was downloaded as a sale at one price OR played under a subscription service at a different royally rate and then iTunes internally would just keep track so they could figure out how much they owed each record distributor whether the content was sold or played in a subscription service model. Pretty simple if you ask me. Getting these types of deals is OBVIOUSLY not that big of a problem. Why couldn't Apple do that themselves and save $3.2 Billion on it? Beats really isn't a threat to Apple's business anytime in the near future if they stayed on their own. 110,000 subscribers? Their growth rate would eventually have slowed down and leveled off. How many paid subscribers does Spotify have? Something like 6 Million? They have about 24 million account holders, but only 6 Million paid subscribers.
Apple has 800 Million iTunes account holders, so if they got 1/4 of their iTunes account holders to switch, that's about 200 Million. How long would it take Apple to get paid subscribers? Maybe less than a year or two. I really think Apple didn't have to pay $3.2 Billion to get in this game, I think it's just a matter of getting someone to approach the distributors to activate the same contracts as these others. That doesn't take that long. They already know who the top 3 major players are and already deal with them.
2. I haven't ignored it but we've had this conversation before about what Apple is capable of doing themselves for $1-2 billion as opposed to buying a company. I really really don't think that Apple is going to keep the HW. It's not in Apple's business model. They dumped that type of merchandise over a decade ago. The question I am seeing, is Apple going to get enough back from the HW to make the fledging music service worthwhile at any price.
To me this just doesn't seem to fit Apple's mo. Apple buys fledging stand-alone companies at comparatively cheap prices. This is a dual company and it's not cheap, imo, if Apple is only considering the streaming service. IMO, if Cook wants to get into the accessories market again, then he's nuts... at almost any price.
1) I read very quickly and usually only look at the username after the fact, although some writing styles stick out. If you make an absolute statement that in no way indicates it an opinion or a hypothetical I am not likely to read it as such. I'll do my best to accommodate you since you are saying that you do mean to state an opinion but I can guarantee this conversation won't happen again. Take Ireland as an example, he states he desires as unwavering, factual statements and then if 1 out of 50 comes true he'll be the first one on the board to say something like, "See I told you so. You can all thank me now." IMO, that's not a reasonable way to have a discussion since there is no volleying of ideas; no learning; no growth.
2) It would definitely be a departure from anything we've seen Apple do in the past. From the price to how well known Beats is to not simply being a single component or feature of an Apple product to being a purchase that apparently is multifaceted it's an unusual rumour. But don't the odds say that Apple will change their routine at some point?
The part that really gives this rumour some traction for me is iTunes Store music segment finally suffering a loss in YoY sales. I think that with over a decade it's becoming your parents music service]. Well, maybe not our parents, but for the kids that were preteen when it launches who are now adults they may not find it cool anymore. And maybe it isn't. Perhaps this is complex deal that will allow Apple to achieve many things and at a relative bargain for how much of a rumoured profit center they get compared to other acquisitions we've seen.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
1) I read very quickly and usually only look at the username after the fact, although some writing styles stick out. If you make an absolute statement that in no way indicates it an opinion or a hypothetical I am not likely to read it as such. I'll do my best to accommodate you since you are saying that you do mean to state an opinion but I can guarantee this conversation won't happen again. Take Ireland as an example, he states he desires as unwavering, factual statements and then if 1 out of 50 comes true he'll be the first one on the board to say something like, "See I told you so. You can all thank me now." IMO, that's not a reasonable way to have a discussion since there is no volleying of ideas; no learning; no growth.
2) It would definitely be a departure from anything we've seen Apple do in the past. From the price to how well known Beats is to not simply being a single component or feature of an Apple product to being a purchase that apparently is multifaceted it's an unusual rumour. But don't the odds say that Apple will change their routine at some point?
The part that really gives this rumour some traction for me is iTunes Store music segment finally suffering a loss in YoY sales. I think that with over a decade it's becoming your parents music service]. Well, maybe not our parents, but for the kids that were preteen when it launches who are now adults they may not find it cool anymore. And maybe it isn't. Perhaps this is complex deal that will allow Apple to achieve many things and at a relative bargain for how much of a rumoured profit center they get compared to other acquisitions we've seen.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
Hard music is down everywhere. It took its first hit in 2013.
Streaming is the way to go. It's on the upswing. I just don't think that Beats is the best deal for $3.2 billion. It doesn't fit Apple's MO, imo.
Apple changing its routine? Not a really great sign for investors to have a company go from solid to "who knows what the hell will happen".
Apple has 800 Million iTunes account holders, so if they got 1/4 of their iTunes account holders to switch, that's about 200 Million.
Do you ever think? First of all, iTunes and Beats Music/Pandora/Spotify are not mutually exclusive internet-based services. There is no 1:1 switching going on here. With HW, that's usually how it works but this isn't HW. Second, iTunes covers a lot more than just music so what is your reasoning that someone that signs with a music streaming service will remove their CC and account from the vast iTunes/iCloud umbrella? I'm going to go out on a limb and say you have none.
In one month when the previous report was a total of 300k total at the end of 2013. That means a 36% increase over that number for one month. That's impressive growth for a new service no matter how much you want to spin your hatred for Dr. Dre.
[QUOTE]I still don't know why Apple couldn't get their own subscription model going without wasting $3.2 Billion to get 110,000 subscribers.[/QUOTE]
If the rumours had all been "Apple wants to buy Beats Music, and only Beats Music to get their subscription additions for the month of March" you'd have a point. They aren't. You don't.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
I'm saying that if Apple were interested in getting into the headphone game, they would be better served by making their own large headphones and releasing them under their own brand. No brand is better than Apple. Apple can start from scratch, headphones is not rocket science, and Apple certainly doesn't need any headphone tech from a company that is far down the list when it comes to good headphones.
Like it or not, the Beats brand is not viewed favorably by a lot of people.
MR seems to be interpreting the data differently. They appear to be saying that their total subscription base is only 111k as of March. That's a major drop from the previous report of 300k.
Like it or not, the Beats brand is not viewed favorably by a lot of people.
Sure but "a lot of" is a meaning statement. A lot of people hated Gandhi. A lot of people hated Mother Theresa.
When being objective you can't factor in your own desires. You should look at it from Apple's PoV to try to see why Apple would want to buy them. The same for any rumoured acquisition. People wanted Apple to buy Nest but it's really hard to find a legitimate reason that doesn't include someone's personal love for the product.
OK, big day shooting wild boar from a helicopter with Ted Nugent¡ Later.
FYI, I signed up for Beats yesterday. When you reject the paid plan the first time, they text you a code for AT&T subscribers for 3 free months on AT&T. I'm thinking this is why so many AT&T customers are signing up.
Reading a ton of articles about this rumored acquisition by Apple, I still fail to see any positives. If Apple is interested in the streaming services Beats offers, why can't they just develop their own? Why would they need Beats? Lets face it, Beats subscriber numbers really aren't that impressive, regardless of how you spin the numbers. All the deals Beats have with the labels for their streaming service would be void in a takeover. Apple doesn't need Beats to develop their own headphones if that's what they are interested in. If this deal becomes reality, I think this will be a bad decision by Tim Cook. I do tip my hat to Beats though for making a ton of money selling crappy quality headphones.
You should look at it from Apple's PoV to try to see why Apple would want to buy them.
And when I do try to look at it from Apple's POV, I still find that it would be a bad idea. Note, I'm talking about the headphones here only.
If Apple released their own Apple headphones, it would appeal to practically 100% of Apple's customer base. Apple users don't have anything against Apple.
If Apple released any Beats headphones, it would appeal to a far lesser percentage of people, so why would Apple wish to eliminate so many potential customers? And as I stated before, no brand is more powerful than Apple, so why would they put themselves at a disadvantage?
When being objective you can't factor in your own desires.
This would have been good advice to follow when you were arguing with drblank about the relative levels of achievement of mastering a musical instrument and programming a rap song into recording software.
I don't think that the market is anywhere close to that number.
This is a streaming service that costs $10 a month.
I'm just looking at the percentage of active users vs paid subscription potential using Spotify's numbers since they've been doing it longer than Beats. That's all I'm looking. If it's not 20 percent for Apple, then what percentage do you think they would have at a point where it leveled off to a consistent amount? Remember, during the first year or two, these types of things ramp up at fairly high growth rates until it drops to a more normalized growth rate (up or down). Do I think Apple could get 200 Million paid subscribers out of their current 800 Million after a couple of years? It's possible considering that the iTunes account holders is STILL growing pretty rapidly as Apple increases their markets by opening up more countries with iPhones (which is obviously the new iPod, if you will). What growth rate are the active iTunes account holders growing at and what number is likely after another year or two? They might hit 1 Billion active accounts in the next two years or so. So 200 Million paid subscriptions paying $10 a month is possible. It's hard to tell since it's a new business model and there isn't anyone large enough that been doing it long enough to really know, so it's more speculation. But how profitable is it compared to the other models they currently have and at what point (number of subscribers) does it make decent enough profit margins to do it. What's risks are is can they get enough subscribers to make it more profitable than just selling digital downloads? That's what this model would be competing against. Apple would actually be compteting against themselves in selling digital downloads vs the subscription more than they would competing against Spotify. At the rate Spotify is growing, Apple's business isn't being greatly affected all that much. If Spotify has 6 Million active users paying $10 a month, how much of that $120 a year is Net Profit x the number of paid subscribers? What do they make, do you know? I'd bet they probably make about $10 a year in actual Net Profit per user if they are at a point where they can become profitable. Compare that against how much per user do they make doing the digital download method. Which one stands a chance at making the most Net Profit per user, per year. How many people will continue at the same rate of BUYING content and STILL pay for the subscription service. Some people might actually stop buying music altogether which they would essentially lose business on one model and get less money through the other model. there are a lot of things to consider.
An example, Amazon's Prime increased how much they charge for their movie viewing service that gives cost savings on shipping product orders. What I'm getting at is, is $10 enough for this type of service, or are they going to have to increase the monthly fee and will it still retain those types of customers.
There are still a lot of unknowns obviously, but I think Apple can get a large number of their active iTunes account holders to buy a $10 month service if they market it properly.
Comments
1) I'm not making any absolute claims as to what Apple is or interested in. If you wanted to state that as opinion it was easy enough, "In my opinion I don't think Apple is interested in the hardware sales."
2) It read to me as if you were ignoring that when you answered a comment about the growth of Beats Music in a month with the entire rumoured sale of the company for $3.2 billion.
1. Take it as a given.
2. I haven't ignored it but we've had this conversation before about what Apple is capable of doing themselves for $1-2 billion as opposed to buying a company. I really really don't think that Apple is going to keep the HW. It's not in Apple's business model. They dumped that type of merchandise over a decade ago. The question I am seeing, is Apple going to get enough back from the HW to make the fledging music service worthwhile at any price.
To me this just doesn't seem to fit Apple's mo. Apple buys fledging stand-alone companies at comparatively cheap prices. This is a dual company and it's not cheap, imo, if Apple is only considering the streaming service. IMO, if Cook wants to get into the accessories market again, then he's nuts... at almost any price.
so what they converted trail users into paying users in a short period of time. I bet if you look at other similar services they saw the same thing initially. The real question is what are the stay power to these paying subscribers. Not like Cable TV where most people only have one choice. How long before these people move on to the next great thing.
I suspect most of these people beating the Beat door down have been married to over service many times over and they have no loyalty.
AOL had great numbers too. This is just trendy crap.
Apple drove sales of Beats headphones as they were in the stores not the other way around. . Now I see it was because of Lovine's fruendship with Jobs that they were sold there. . I always wondered why such crap was for sale at Apple stores.
Invading someone's personal space and potentially threatening violence and exposure to their germs is so much less offensive than using the word shit¡
There is a Jim Jefferies scene from Legit I was going to post but I can't find it on YouTube.
Thank god- now please go away.
I think all Apple really had to figure out is to go to the same record distributors they already have deals with and sign them so they can have whatever out of their existing catalog for a subscription service model and then all Apple would have to do is link different royalty rates depending on whether the song was downloaded as a sale at one price OR played under a subscription service at a different royally rate and then iTunes internally would just keep track so they could figure out how much they owed each record distributor whether the content was sold or played in a subscription service model. Pretty simple if you ask me. Getting these types of deals is OBVIOUSLY not that big of a problem. Why couldn't Apple do that themselves and save $3.2 Billion on it? Beats really isn't a threat to Apple's business anytime in the near future if they stayed on their own. 110,000 subscribers? Their growth rate would eventually have slowed down and leveled off. How many paid subscribers does Spotify have? Something like 6 Million? They have about 24 million account holders, but only 6 Million paid subscribers.
Apple has 800 Million iTunes account holders, so if they got 1/4 of their iTunes account holders to switch, that's about 200 Million. How long would it take Apple to get paid subscribers? Maybe less than a year or two. I really think Apple didn't have to pay $3.2 Billion to get in this game, I think it's just a matter of getting someone to approach the distributors to activate the same contracts as these others. That doesn't take that long. They already know who the top 3 major players are and already deal with them.
Apple has 800 Million iTunes account holders, so if they got 1/4 of their iTunes account holders to switch, that's about 200 Million.
I don't think that the market is anywhere close to that number.
This is a streaming service that costs $10 a month.
1) I read very quickly and usually only look at the username after the fact, although some writing styles stick out. If you make an absolute statement that in no way indicates it an opinion or a hypothetical I am not likely to read it as such. I'll do my best to accommodate you since you are saying that you do mean to state an opinion but I can guarantee this conversation won't happen again. Take Ireland as an example, he states he desires as unwavering, factual statements and then if 1 out of 50 comes true he'll be the first one on the board to say something like, "See I told you so. You can all thank me now." IMO, that's not a reasonable way to have a discussion since there is no volleying of ideas; no learning; no growth.
2) It would definitely be a departure from anything we've seen Apple do in the past. From the price to how well known Beats is to not simply being a single component or feature of an Apple product to being a purchase that apparently is multifaceted it's an unusual rumour. But don't the odds say that Apple will change their routine at some point?
The part that really gives this rumour some traction for me is iTunes Store music segment finally suffering a loss in YoY sales. I think that with over a decade it's becoming your parents music service]. Well, maybe not our parents, but for the kids that were preteen when it launches who are now adults they may not find it cool anymore. And maybe it isn't. Perhaps this is complex deal that will allow Apple to achieve many things and at a relative bargain for how much of a rumoured profit center they get compared to other acquisitions we've seen.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
1) I read very quickly and usually only look at the username after the fact, although some writing styles stick out. If you make an absolute statement that in no way indicates it an opinion or a hypothetical I am not likely to read it as such. I'll do my best to accommodate you since you are saying that you do mean to state an opinion but I can guarantee this conversation won't happen again. Take Ireland as an example, he states he desires as unwavering, factual statements and then if 1 out of 50 comes true he'll be the first one on the board to say something like, "See I told you so. You can all thank me now." IMO, that's not a reasonable way to have a discussion since there is no volleying of ideas; no learning; no growth.
2) It would definitely be a departure from anything we've seen Apple do in the past. From the price to how well known Beats is to not simply being a single component or feature of an Apple product to being a purchase that apparently is multifaceted it's an unusual rumour. But don't the odds say that Apple will change their routine at some point?
The part that really gives this rumour some traction for me is iTunes Store music segment finally suffering a loss in YoY sales. I think that with over a decade it's becoming your parents music service]. Well, maybe not our parents, but for the kids that were preteen when it launches who are now adults they may not find it cool anymore. And maybe it isn't. Perhaps this is complex deal that will allow Apple to achieve many things and at a relative bargain for how much of a rumoured profit center they get compared to other acquisitions we've seen.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
Hard music is down everywhere. It took its first hit in 2013.
Streaming is the way to go. It's on the upswing. I just don't think that Beats is the best deal for $3.2 billion. It doesn't fit Apple's MO, imo.
Apple changing its routine? Not a really great sign for investors to have a company go from solid to "who knows what the hell will happen".
Do you ever think? First of all, iTunes and Beats Music/Pandora/Spotify are not mutually exclusive internet-based services. There is no 1:1 switching going on here. With HW, that's usually how it works but this isn't HW. Second, iTunes covers a lot more than just music so what is your reasoning that someone that signs with a music streaming service will remove their CC and account from the vast iTunes/iCloud umbrella? I'm going to go out on a limb and say you have none.
In one month when the previous report was a total of 300k total at the end of 2013. That means a 36% increase over that number for one month. That's impressive growth for a new service no matter how much you want to spin your hatred for Dr. Dre.
[QUOTE]I still don't know why Apple couldn't get their own subscription model going without wasting $3.2 Billion to get 110,000 subscribers.[/QUOTE]
If the rumours had all been "Apple wants to buy Beats Music, and only Beats Music to get their subscription additions for the month of March" you'd have a point. They aren't. You don't.
As for the headphones, I find it odd that people keep calling them crap when Apple doesn't seem to have any good skin in this game. Do the original Beats headphones being too bassy mean that Apple can't make them less bassy. It's like when people are going through an open house looking for a purchase they make their decisions based on the current paint and furniture (this happens a lot!). It's shortsighted.
I'm saying that if Apple were interested in getting into the headphone game, they would be better served by making their own large headphones and releasing them under their own brand. No brand is better than Apple. Apple can start from scratch, headphones is not rocket science, and Apple certainly doesn't need any headphone tech from a company that is far down the list when it comes to good headphones.
Like it or not, the Beats brand is not viewed favorably by a lot of people.
Sure but "a lot of" is a meaning statement. A lot of people hated Gandhi. A lot of people hated Mother Theresa.
When being objective you can't factor in your own desires. You should look at it from Apple's PoV to try to see why Apple would want to buy them. The same for any rumoured acquisition. People wanted Apple to buy Nest but it's really hard to find a legitimate reason that doesn't include someone's personal love for the product.
OK, big day shooting wild boar from a helicopter with Ted Nugent¡ Later.
Reading a ton of articles about this rumored acquisition by Apple, I still fail to see any positives. If Apple is interested in the streaming services Beats offers, why can't they just develop their own? Why would they need Beats? Lets face it, Beats subscriber numbers really aren't that impressive, regardless of how you spin the numbers. All the deals Beats have with the labels for their streaming service would be void in a takeover. Apple doesn't need Beats to develop their own headphones if that's what they are interested in. If this deal becomes reality, I think this will be a bad decision by Tim Cook. I do tip my hat to Beats though for making a ton of money selling crappy quality headphones.
I’m a little worried about this in regard to the rumor that Apple will start selling higher quality audio.
Apple could sell ALAC files (LIKE THEY SHOULD), but it wouldn’t mean much if their hardware is garbage…
110k subscribers for $3B is about $27,000 per ONE subscriber paying $10 a month and after payout to studios bringing like $3 a month?
You should look at it from Apple's PoV to try to see why Apple would want to buy them.
And when I do try to look at it from Apple's POV, I still find that it would be a bad idea. Note, I'm talking about the headphones here only.
If Apple released their own Apple headphones, it would appeal to practically 100% of Apple's customer base. Apple users don't have anything against Apple.
If Apple released any Beats headphones, it would appeal to a far lesser percentage of people, so why would Apple wish to eliminate so many potential customers? And as I stated before, no brand is more powerful than Apple, so why would they put themselves at a disadvantage?
This would have been good advice to follow when you were arguing with drblank about the relative levels of achievement of mastering a musical instrument and programming a rap song into recording software.
I don't think that the market is anywhere close to that number.
This is a streaming service that costs $10 a month.
I'm just looking at the percentage of active users vs paid subscription potential using Spotify's numbers since they've been doing it longer than Beats. That's all I'm looking. If it's not 20 percent for Apple, then what percentage do you think they would have at a point where it leveled off to a consistent amount? Remember, during the first year or two, these types of things ramp up at fairly high growth rates until it drops to a more normalized growth rate (up or down). Do I think Apple could get 200 Million paid subscribers out of their current 800 Million after a couple of years? It's possible considering that the iTunes account holders is STILL growing pretty rapidly as Apple increases their markets by opening up more countries with iPhones (which is obviously the new iPod, if you will). What growth rate are the active iTunes account holders growing at and what number is likely after another year or two? They might hit 1 Billion active accounts in the next two years or so. So 200 Million paid subscriptions paying $10 a month is possible. It's hard to tell since it's a new business model and there isn't anyone large enough that been doing it long enough to really know, so it's more speculation. But how profitable is it compared to the other models they currently have and at what point (number of subscribers) does it make decent enough profit margins to do it. What's risks are is can they get enough subscribers to make it more profitable than just selling digital downloads? That's what this model would be competing against. Apple would actually be compteting against themselves in selling digital downloads vs the subscription more than they would competing against Spotify. At the rate Spotify is growing, Apple's business isn't being greatly affected all that much. If Spotify has 6 Million active users paying $10 a month, how much of that $120 a year is Net Profit x the number of paid subscribers? What do they make, do you know? I'd bet they probably make about $10 a year in actual Net Profit per user if they are at a point where they can become profitable. Compare that against how much per user do they make doing the digital download method. Which one stands a chance at making the most Net Profit per user, per year. How many people will continue at the same rate of BUYING content and STILL pay for the subscription service. Some people might actually stop buying music altogether which they would essentially lose business on one model and get less money through the other model. there are a lot of things to consider.
An example, Amazon's Prime increased how much they charge for their movie viewing service that gives cost savings on shipping product orders. What I'm getting at is, is $10 enough for this type of service, or are they going to have to increase the monthly fee and will it still retain those types of customers.
There are still a lot of unknowns obviously, but I think Apple can get a large number of their active iTunes account holders to buy a $10 month service if they market it properly.