They aren't buying this for a revenue stream,
Eh? they are just giving away $3.2B because it is burning a hole in the pocket? Highly unlikely. They are paying billions because someone has some presentation of how it will make them
more billions. Going to be pretty tough to make more billions if there is no revenue stream.
if anything, they'd buy it and incorporate it into their existing service at the same price points.
If the existing services are making money why bother? Are any of the 'free ad' streaming services making money. Most appear to be marketing budget black holes where more money has to be thrown in to get revenue to come out.
iTunes Match pricing is highly suggestive that is largely based on playing the music that people already own. That is going to run into a brick wall when start to accumulate customers that don't own large music catalogs already.
There isn't much proof that Apple's ad revenue and Match subscriptions are actually "paying to keep the lights on" at Apple. Indeed scrambling to throw $3B at Beats is highly suggestive that it isn't.
They want to add value to their hardware, not make them more money directly (as nice as that always is of course).
This makes no sense. The record companies are going to be
charging money per year for streaming. Single event purchase hardware is not going to pay for multiple years of stream services. Just isn't. What have here is a on going, constant reoccurring cost. That means there needs to be a similarly on going revenue stream to match that.
They're all about giving their hardware customers more stuff for free recently, not increasing the prices of what they offer already.
Apple is about the delusion that there is more stuff for 'free'. The one shot 'freebies' and incremental services/upgrades are just built into the price of the hardware. They are being paid for. It is just bundled.
Streaming music is substantially different because Apple does not fully control that. What the yearly costs for music and how many songs have to play "unskipped" isn't really largely their control.
Apple has increasing shifted its revenues to "iTunes store". The tap dance of "that stuff is free we don't want to make money off of it" is wearing thing. They do. Just like don't plan to keep using "Apple TV is just a hobby" tap dance story going forever either.
Apple isn't out to sell hardware. They are far more so a systems company. They are out to sell a ecosystem. If part of that ecosystem has ongoing costs they are most definately out to cover that cost
and make a substantive profit on top.
With scale will the current Beats pricing go down a bit? Probably. As low as Match? I have doubts given few if any are making streaming work right now except the record companies collecting the checks.
