On May 8th 2014, Apple announced that it was in talks to buy Beats Electronics for 3.2 billion dollars. While some bloggers have questioned this move by Apple, others have been quick to label the deal as a move to divest some of Apple's sizable cash holdings.
Beats Electronics was started by Dr. Dre and Jimmy Iovine. The company produces a very popular and successful brand of head phones called Beats By Dre. In January 2014, Beats Electronics launched its own music service, called Beats Music. Reports have stated that Beats Music has only 100,000 to 200,000 paid subscribers since its January start.
iTunes Radio has been doing well, however, Apple is disappointed that the stream to click through ration has been running around 2%, as download sales continue to slump. Apple has been considering an overhaul of iTunes Radio, possibly adding a subscription service to its repertoire.
Apple has been selling Beats head phones practically since their inception. Both iTunes Radio and Beats Music have been struggling. Bringing the two entities together seems like an obvious conclusion. This acquisition will at the very least give Apple access to both the Android OS and Windows Phone. The purchase of Beats Electronics will also give Apple a paid subscription service that's already up and running.
It's not easy to discern whether this deal will mean that streaming will now be viewed as more important than owning your own copy of a song or track. In my opinion, it may just turn out that those who come to Beats to listen to a music stream, will end up clicking through to Apple's iTunes for a download.
No comments:
Post a Comment