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.
I wonder how many people pay for iTunes Match? That's only $25 a year. I have iTunes Match, and I like it.
I'm not somebody who is interested in any streaming service, not for $10 a month, or for any price really, but maybe there are others who are.
This rumour is looking better and better everyday.
There is a lot of knee jerking going on around here based on very little information. The fact that Apple might be making a deal that on the surface is outside of the norm for Apple, and possibly way outside of its perceived comfort zone should be interesting and cause a pause for thinking instead of outright dismissal. Most of us here think that Apple generally speaking make very good, well considered decisions, and I am sure the more rational among us understand this alleged purchase was not an impulse buy. So far the only interesting reading I have done on the subject come from writers who are trying to figure out how this can be a good play by Apple. Hating Hip Hop, and specifically Dre, certainly ads nothing useful to the conversation. Reactions to the celebratory foulmouthed video are understandable, perhaps, but out of place. We all know that in so many ways Steve Jobs was the biggest prick around and yet we all forgive him because really, who cares?
Personally I think the headphones (insignificantly) came with the purchase and will continue under the Beats name - Beats by Apple. They may or may not be improved upon. The more interesting part is the streaming service and Dre and Lovine. Apple just got an inside track to the heart of the music business which surely is a good thing. I am wondering if Apple would /c could spin off the music content part of its business to a whole new business unit (Beats?) iTunes is definitely beginning to look very old school to me, and I'm not even young. My kids never use iTunes (they use YouTube).
As someone who has worked in the music industry in various areas and degrees, the one concern I do have in all this is the potential negative financial effect selective streaming of music (as opposed to the actual purchase of same) will have on the creators of said music. Notice the image of the statement in the article pointing out the abysmally tiny royalty rate.
With VIDEO, the studios can determine which movies and TV shows are available for streaming. If you've ever noticed with Netflix, you can't get a lot of the movies and TV shows you want for streaming because the studios control their availability. The studios know that with a $7.99/month subscription someone could technically watch movies 24/7 for a whole 30 days for only $8. Studios would lose money, so they pick and choose which movies and TV shows to allow to be streamed, and when they are available.
With MUSIC, the record companies can't do that now. To limit the catalog puts limits on the number of people who'll sign up and use a streaming service. So they put the entire catalog out there, but offer a horrible royalty rate to the songwriters on the back-end. End result… no one "buys" the music anymore, they only "rent" it. And the songwriter loses at all angles - lack of mechanical royalties from sales, lack of performance royalties from regular radio airplay and venues, and the worse of all royalty rates from selective streaming.
For those that think that artists make the bulk of their money on the road playing shows anyway… well, that used to be the case. But in the last couple decades it's been harder and harder to do that. Venues that used to offer live music have either close down, turn into a DJ or KJ venue, or became a sports bar. Those that continue to offer live music now force you to pay-to-play (buy x # of tickets in advance and it's up to you to sell them to get that money back and make any actually payment money on top of that). That used to be the exception in the 80s and early 90s. Now it's much more the rule.
Unless you're an established artist with a studio backing, it's become a lot more difficult to make money performing live. And now, with selective streaming, even if you do "make it" in the industry, as a songwriter you're ability to make any money continues to be that much more difficult. Even the performing artist loses because of the lack of sales, thus the lack of mechanical royalties. But the studios/record companies continue to make bank.
I don’t have an answer as to how to fix this so that the artist and songwriter don’t get screwed. But it does need to be pointed out that they are and will continue to be screwed under this current structure
With Trent Reznor involved in Beats (the streaming music portion), it would be nice to somehow setup a system such that the artists can self-publish to iTunes and cut out the record companies altogether. What the leaked doc shows is that out of everyone, the artists are getting the biggest shaft of all. Trent is obviously big enough that he can do it for himself (and I also love the cost of his music direct from him, more people will buy and he gets more revenue by doing it directly vs through all the middle men), it would be great if they could somehow extend that to others as well.
Beats likely has such a high fraction of "paying" subscribers because of the link to AT&T wireless accounts, where users can get 3 months free. Will have to see what fraction keep paying after the 3 months expire.
I have to admit this as well. I was not happy at first after seeing Dr. Dre's profanity and n-word laced youtube video. I do not want Apple associating with that type of culture. I feel the same way if it was Eminem so it isn't a Black/White thing. I am getting more intrigued as I read about this acquisition and the reasons for it.
Beats likely has such a high fraction of "paying" subscribers because of the link to AT&T wireless accounts, where users can get 3 months free. Will have to see what fraction keep paying after the 3 months expire.
If they're on Android phones, then the percentage of people who continue to subscribe will obviously be extremely low.
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Yeah, there seems to be a lot of spin for an idea that nobody had even mentioned before.
I do have my doubts of course, but I won't pass any final judgement until we hear all of the facts, and as of now, there aren't any at all, because Apple hasn't said anything at all.
Until Apple opens its mouth and we hear the details, I will remain doubtful about this deal.
Yep, if you took a poll of AI readers and asked them what they'd like to see Apple do with its cash I doubt anyone would have suggested buying Beats. The website MacDailyNews claims that an updated Apple TV is ready to go, the hold up is content deals. If this rumor pans out it indicates to me that Eddy Cue can't hack it in that department and Cook is bringing someone in (possibly Jimmy Iovine) who can.
Still not worth billions. Only tarnishes the Apple brand, does not improve it.
If Apple keeps the headphones (and let's face it that's the part of the company making money right now) business I hope they don't just milk the existing product. I hope they improve it. And maybe even expand it further. Maybe they can use Beats to kick start a wearables line.
Articles after articles ask why Apple didn't go after other services like Spotify. I think Apple picked the right service to buy with Beats. They are looking for the service that will help them corner the market in the future not buying the current market leader. Spotify doesn't have anything innovative to offer except its user base. If Apple can convert even 10% of the itunes account into subscribers, it would dwarf Spotify. And Beats have the tools to make that happen. I think the Beats branding will remains and will be the apple brand for all things music - Apple Beats. The 1 billion dollar in sales headphone hardware is just cherry on top. It is almost a risk free venture because they will make back the purchase price in a few year.
And the argument on why they didnt buy a better headphone company... There are many that make higher quality headphones but how come they can't monetize it for sh*t? They have no idea about fashion and culture that's why. Like Apple, Beats showed they the way and now they start paying more attention to the hardware design. Apple can easily improve the audio but it is harder to improve the branding.
Geeks/Engineering types will never get it which is why Google hardware is a flop profit wise. Apple needs for their next device are: great engineering, design, and fashion and that is going to be very hard to do, but Apple is the only company in the tech world today, that has any chance do it.
If this rumor pans out it indicates to me that Eddy Cue can't hack it in that department and Cook is bringing someone in (possibly Jimmy Iovine) who can.
Iovine is definitely the most valuable part of this deal I think, as he has all of the connections with the labels. If there is any deal, then it's probably him that Apple is after.
Apple needs for their next device are: great engineering, design, and fashion and that is going to be very hard to do
And what exactly do you think that Apple has been doing this whole time? Apple doesn't need any fashion help from anybody, Apple sets the trends, they release devices that are so greatly engineered and designed that everybody else ends up copying them, releasing their own poor imitations.
Apple is a trendsetter and practically every single one of their products is heavily copied, mimicked and sets the tone and style for whole industries. That's what they've been doing for decades.
With Trent Reznor involved in Beats (the streaming music portion), it would be nice to somehow setup a system such that the artists can self-publish to iTunes and cut out the record companies altogether. What the leaked doc shows is that out of everyone, the artists are getting the biggest shaft of all. Trent is obviously big enough that he can do it for himself (and I also love the cost of his music direct from him, more people will buy and he gets more revenue by doing it directly vs through all the middle men), it would be great if they could somehow extend that to others as well.
Not going to happen existing contracts with content companies. iBooks is also tied in the same way with the book publishers.
Apple isn't interested in the hardware sales. Maybe as a spin off, a flip, but that's about it.
I suppose if Apple was able to get $1 billion or more from the hardware side it would make the streaming business seem a bit more attractive.
By the way, do you think that any Beats contracts will be transferred in the deal? I, for one, don't.
The only reason Beats is worth anything is because of the hardware sales. The brand is all around the headphones, not their relatively new streaming service. Last week a CNBC reporter said her sources said it was "all about headphones". At this point we know nothing. But I somehow doubt Apple wouldn't be interested in profitable hardware. Who knows, maybe they'll use the Beats brand to kick start a new wearables category.
Every other Apple-related site is telling exactly the opposite - that Beats's subscription service proves to be a failure with JUST some 100k subscribers; in other words, let's just hope THAT was not the reason Apple decided to spend 3 billion USD on Beats - so the million-dollar question is: why is AI spinning this story in a totally different way?
Comments
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.
I wonder how many people pay for iTunes Match? That's only $25 a year. I have iTunes Match, and I like it.
I'm not somebody who is interested in any streaming service, not for $10 a month, or for any price really, but maybe there are others who are.
As you said, there are still a lot of unknowns.
This rumour is looking better and better everyday.
There is a lot of knee jerking going on around here based on very little information. The fact that Apple might be making a deal that on the surface is outside of the norm for Apple, and possibly way outside of its perceived comfort zone should be interesting and cause a pause for thinking instead of outright dismissal. Most of us here think that Apple generally speaking make very good, well considered decisions, and I am sure the more rational among us understand this alleged purchase was not an impulse buy. So far the only interesting reading I have done on the subject come from writers who are trying to figure out how this can be a good play by Apple. Hating Hip Hop, and specifically Dre, certainly ads nothing useful to the conversation. Reactions to the celebratory foulmouthed video are understandable, perhaps, but out of place. We all know that in so many ways Steve Jobs was the biggest prick around and yet we all forgive him because really, who cares?
Personally I think the headphones (insignificantly) came with the purchase and will continue under the Beats name - Beats by Apple. They may or may not be improved upon. The more interesting part is the streaming service and Dre and Lovine. Apple just got an inside track to the heart of the music business which surely is a good thing. I am wondering if Apple would /c could spin off the music content part of its business to a whole new business unit (Beats?) iTunes is definitely beginning to look very old school to me, and I'm not even young. My kids never use iTunes (they use YouTube).
As someone who has worked in the music industry in various areas and degrees, the one concern I do have in all this is the potential negative financial effect selective streaming of music (as opposed to the actual purchase of same) will have on the creators of said music. Notice the image of the statement in the article pointing out the abysmally tiny royalty rate.
With VIDEO, the studios can determine which movies and TV shows are available for streaming. If you've ever noticed with Netflix, you can't get a lot of the movies and TV shows you want for streaming because the studios control their availability. The studios know that with a $7.99/month subscription someone could technically watch movies 24/7 for a whole 30 days for only $8. Studios would lose money, so they pick and choose which movies and TV shows to allow to be streamed, and when they are available.
With MUSIC, the record companies can't do that now. To limit the catalog puts limits on the number of people who'll sign up and use a streaming service. So they put the entire catalog out there, but offer a horrible royalty rate to the songwriters on the back-end. End result… no one "buys" the music anymore, they only "rent" it. And the songwriter loses at all angles - lack of mechanical royalties from sales, lack of performance royalties from regular radio airplay and venues, and the worse of all royalty rates from selective streaming.
For those that think that artists make the bulk of their money on the road playing shows anyway… well, that used to be the case. But in the last couple decades it's been harder and harder to do that. Venues that used to offer live music have either close down, turn into a DJ or KJ venue, or became a sports bar. Those that continue to offer live music now force you to pay-to-play (buy x # of tickets in advance and it's up to you to sell them to get that money back and make any actually payment money on top of that). That used to be the exception in the 80s and early 90s. Now it's much more the rule.
Unless you're an established artist with a studio backing, it's become a lot more difficult to make money performing live. And now, with selective streaming, even if you do "make it" in the industry, as a songwriter you're ability to make any money continues to be that much more difficult. Even the performing artist loses because of the lack of sales, thus the lack of mechanical royalties. But the studios/record companies continue to make bank.
I don’t have an answer as to how to fix this so that the artist and songwriter don’t get screwed. But it does need to be pointed out that they are and will continue to be screwed under this current structure
With Trent Reznor involved in Beats (the streaming music portion), it would be nice to somehow setup a system such that the artists can self-publish to iTunes and cut out the record companies altogether. What the leaked doc shows is that out of everyone, the artists are getting the biggest shaft of all. Trent is obviously big enough that he can do it for himself (and I also love the cost of his music direct from him, more people will buy and he gets more revenue by doing it directly vs through all the middle men), it would be great if they could somehow extend that to others as well.
Beats likely has such a high fraction of "paying" subscribers because of the link to AT&T wireless accounts, where users can get 3 months free. Will have to see what fraction keep paying after the 3 months expire.
I have to admit this as well. I was not happy at first after seeing Dr. Dre's profanity and n-word laced youtube video. I do not want Apple associating with that type of culture. I feel the same way if it was Eminem so it isn't a Black/White thing. I am getting more intrigued as I read about this acquisition and the reasons for it.
It is.
Beats likely has such a high fraction of "paying" subscribers because of the link to AT&T wireless accounts, where users can get 3 months free. Will have to see what fraction keep paying after the 3 months expire.
If they're on Android phones, then the percentage of people who continue to subscribe will obviously be extremely low.
www.jobs333.com
Articles after articles ask why Apple didn't go after other services like Spotify. I think Apple picked the right service to buy with Beats. They are looking for the service that will help them corner the market in the future not buying the current market leader. Spotify doesn't have anything innovative to offer except its user base. If Apple can convert even 10% of the itunes account into subscribers, it would dwarf Spotify. And Beats have the tools to make that happen. I think the Beats branding will remains and will be the apple brand for all things music - Apple Beats. The 1 billion dollar in sales headphone hardware is just cherry on top. It is almost a risk free venture because they will make back the purchase price in a few year.
And the argument on why they didnt buy a better headphone company... There are many that make higher quality headphones but how come they can't monetize it for sh*t? They have no idea about fashion and culture that's why. Like Apple, Beats showed they the way and now they start paying more attention to the hardware design. Apple can easily improve the audio but it is harder to improve the branding.
Geeks/Engineering types will never get it which is why Google hardware is a flop profit wise. Apple needs for their next device are: great engineering, design, and fashion and that is going to be very hard to do, but Apple is the only company in the tech world today, that has any chance do it.
If this rumor pans out it indicates to me that Eddy Cue can't hack it in that department and Cook is bringing someone in (possibly Jimmy Iovine) who can.
Iovine is definitely the most valuable part of this deal I think, as he has all of the connections with the labels. If there is any deal, then it's probably him that Apple is after.
Apple needs for their next device are: great engineering, design, and fashion and that is going to be very hard to do
And what exactly do you think that Apple has been doing this whole time? Apple doesn't need any fashion help from anybody, Apple sets the trends, they release devices that are so greatly engineered and designed that everybody else ends up copying them, releasing their own poor imitations.
Apple is a trendsetter and practically every single one of their products is heavily copied, mimicked and sets the tone and style for whole industries. That's what they've been doing for decades.
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".
MOG could that be the reason.
With Trent Reznor involved in Beats (the streaming music portion), it would be nice to somehow setup a system such that the artists can self-publish to iTunes and cut out the record companies altogether. What the leaked doc shows is that out of everyone, the artists are getting the biggest shaft of all. Trent is obviously big enough that he can do it for himself (and I also love the cost of his music direct from him, more people will buy and he gets more revenue by doing it directly vs through all the middle men), it would be great if they could somehow extend that to others as well.
Not going to happen existing contracts with content companies. iBooks is also tied in the same way with the book publishers.
MOG could that be the reason.
... and Apple should have bought MOG. Late to the party, imo.
Every other Apple-related site is telling exactly the opposite - that Beats's subscription service proves to be a failure with JUST some 100k subscribers; in other words, let's just hope THAT was not the reason Apple decided to spend 3 billion USD on Beats - so the million-dollar question is: why is AI spinning this story in a totally different way?