Beats Music's Subscriber Base Pegged at Just 111,000

Discussion in 'MacRumors.com News Discussion' started by MacRumors, May 13, 2014.

  1. macrumors bot

    MacRumors

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    [​IMG]


    A new screenshot shared by The Trichordist (via The Guardian) allegedly reveals that the Beats Music service had only about 111,000 subscriber accounts during the month of March, indicating that Apple is indeed likely to be purchasing Beats for some combination of its headphones business, streaming technology, brand, and industry connections rather than the existing subscription service.

    An acquisition by Apple would undoubtedly boost exposure for the Beats Music service, and potential tie-ins with Apple's existing iTunes services would offer a strong platform for growth, meaning that Apple is likely relatively unconcerned with the small subscriber base.

    [​IMG]
    The leaked royalty sheet breaks down the subscriber numbers according to the available plans, and of the roughly 111,000 accounts, just under 50,000 were individual accounts while 61,621 were joint "family" accounts available through a promotional arrangement with AT&T. Beats Music has not released subscriber numbers, but this leaked sheet appears to corroborate an earlier report from Billboard that claims Beats' early subscriber estimates have been "disappointing" to music label executives.

    Apple had reportedly been impressed with the subscription conversion rate for Beats, although it is not entirely clear from the chart where those users are accounted for. Roughly 70% of total plays fall under a "promotional royalty rate" category, with the remaining being subject to standard royalty calculations, although it is unclear what criteria cause a play to be placed in either of the two categories.

    Looking at the individual subscriptions, the numbers show that Beats pays out approximately 65% of its revenue to rightsholders, similar to other streaming services, with labels receiving by far the largest chunk and songwriters receiving only a tiny slice through their performance rights organizations (PROs).

    Apple is reportedly acquiring Beats Electronics for music industry veteran Jimmy Iovine and musician Dr. Dre, both of whom may play a crucial role in Apple's future music strategy. The Cupertino company also will receive a high-margin headphone business that could be help Apple attract a wealthier and younger clientele.

    Article Link: Beats Music's Subscriber Base Pegged at Just 111,000
     
  2. macrumors 6502a

    Nunyabinez

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    #2
    I'm sorry now that I complained when there were all those Angela Ahrents stories pummeling me.
     
  3. macrumors 68000

    Crosscreek

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    #3
    What do you want for $3.2 Mil. :)

    Alzheimer's
    $3.2bil
     
  4. macrumors regular

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    #4
    ok...

    Understood that Beats brand will grow, but how much will be cannibalization of Apple products or other licensed material, and how much will actually be accretive to Apple? ... :confused:
     
  5. BornAgainApple, May 13, 2014
    Last edited: May 13, 2014

    macrumors 6502a

    BornAgainApple

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    #5
    Iovine and Dred must have something on TC et al.

    Mil ???
     
  6. macrumors 68000

    Crosscreek

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    #6
    I'm sorry , Bil:p
     
  7. macrumors regular

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    #7
    For those who care:

    3,200,000,000
    /
    111,000

    =

    $28,828 per user.
     
  8. macrumors 65816

    JoEw

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    #8
    .000126 per play? wow.
     
  9. macrumors 6502

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    #9
    You don't pay $3.2B for two dudes. Drop the pretense.

    And nice job ignoring what that screenshot is emphasizing: extremely low royalty rates for content producers "artists".
     
  10. macrumors 65816

    Joined:
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    #10
    Yes, young and wealthy clients are demos where Apple is really falling short. :rolleyes:
     
  11. macrumors 65816

    JoEw

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    #11
    Don't forget headphones and brand :cool:
     
  12. macrumors 6502

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    #12
    So at 110,000 subscribers and a value of the headphone business at reported $1 billion. The rumored price is $3.2 Billion. So $2.2 Billion for 110K => ~$29,000 per existing subscriber.

    The price has got to be a lot lower than the rumored $3.2 Billion.
    8 months ago when Beats bought its shares back from HTC, Beats was worth about $1 billion based on the price paid for 25% from HTC.

    I say this is a bad deal for Apple and me as a share holder.
     
  13. macrumors G5

    Rogifan

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    #13
    I said in another thread I don't think the fashion aspect should be discounted.

    http://stratechery.com/2014/apple-buying-beats/
    https://medium.com/editors-picks/ef40bb2cd162
     
  14. macrumors 6502

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    #14
    Everyone here seems like they have this acquisition all figured out. You clearly don't know why Apple is paying that price, neither do I. You clearly don't know the full extent of the acquisition and the longterm benefits for Apple (if any), neither do I. Let it go, stop being so bitter, it doesn't affect you personally.
     
  15. macrumors 6502a

    RightMACatU

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    #15
    $0.000126 per spin :eek:
    An artist could become a millionaire IF only 8 billion people played a song once :D
     
  16. macrumors 603

    whooleytoo

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    #16
    But do those rates / rights transfer with the purchase of Beats, or do they have to be renegotiated? That's what I'd like to know.
     
  17. macrumors regular

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    #17
    I see Apple revamping iTunes radio with technology from beats streaming services and maybe incorporating some of their audio technology into their devices and headsets.

    Beat's headphones suck for the amount of money they cost, but they are better sounding than the Apple's offerings. I dislike how beats uses an EQ filter to massively increase the bass, but Apple's offerings tend to lack both bass and treble in my opinion.

    I don't see apple ever putting beats logo's on their devices, but i do see them leaving beats alone for the most part and allowing them to continue to produce headphones and have a streaming service that shares the same back end as the new iTunes radio would.
     
  18. macrumors 6502

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    #18
    Assuming Apple buys them at all...
     
  19. macrumors newbie

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    #19
    I believe that at a minimum 2x revenue is normal when buying a business - I think I read somewhere that Beats did about 1.2b in Revenue, so that would put the price at around 2.4b...I could be wrong, but I think its somewhere in that range. If so, that would make the price high, but perhaps not as far off as some seem to believe.
     
  20. macrumors 65816

    oneMadRssn

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    #20
    It seems to me like it's an extremely low rate for song writers. The rate is much higher (about 10x higher) for the sound recordings, as seen in the screenshot. Unfortunately, any artist that signed with a label usually signs away all their rights to the recording. Artists that do not sign such agreements get paid more; they presumably get the royalty for both the sound recording and the song writing (assuming they wrote the song).
     
  21. macrumors regular

    Joined:
    Mar 23, 2004
    #21
    So now the, "it's not the ****** headphones Apple want, it's the streaming business" argument has been debunked, just what the hell is Apple thinking?

    Maybe they just want to show Facebook that they too can throw money away on a massively overvalued acquisition?
     
  22. macrumors 68040

    Gasu E.

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    #22
    My father has Alzheimer's. I don't think you have that. Perhaps it's some other disease?
     
  23. macrumors 6502

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    #23
    I wouldn't pay £30 for beats! i got some new Sony headphones which are much better for half the price!
     
  24. macrumors 6502

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    Mar 25, 2010
    #24
    headphone business? Someone care to talk from a professional perspective if beats is actually good headphones?
     
  25. cdmoore74, May 13, 2014
    Last edited by a moderator: May 13, 2014

    macrumors 68000

    Joined:
    Jun 24, 2010
    #25
    Guess you're correct. Anybody willing to buy a IPhone 5C, iPhone 4 in India, Mac computer, $20 USB cable, $400 iPad 2 or $400 iPad mini is gullible enough to buy Beats headphones with a Apple logo on the side.
     

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