Apple Playing 'Catch Up' With Beats Acquisition as Music Labels Push for Subscription Services

[petsounds]

This alleged acquisition is still just that -- a rumor -- so I'm not sure why MacRumors is using language in this article to make it sound like it's already an official done deal.

If Apple is really buying Beats for streaming rights, they should've just bought up the music companies themselves. At least then they'd get lucrative publishing rights. Buying Beats is like paying for the opportunity to rent.

 

[Zerilos]

terrible waste of money

Spotify won the Streaming war

this is like buying an IceBox company after Refrigerators have been invented

anyone invest in Typewriter Ink Ribbons lately?

forget Tesla, lets buy some Coal plants instead

dumb dumb dumb

So Spotify won and nobody else should even try? Personally I prefer a competitive market where several entities are striving for supremacy. Also why do you assume Beats isn't on par with Spotify?

----------

This alleged acquisition is still just that -- a rumor -- so I'm not sure why MacRumors is using language in this article to make it sound like it's already an official done deal.

If Apple is really buying Beats for streaming rights, they should've just bought up the music companies themselves. At least then they'd get lucrative publishing rights. Buying Beats is like paying for the opportunity to rent.

Yes. Why didn't apple think of simply purchasing all of the recording labels? Would have been simple and certainly cheaper than 3.2 billion. You have it all figured out man.

 

[petsounds]

Yes. Why didn't apple think of simply purchasing all of the recording labels? Would have been simple and certainly cheaper than 3.2 billion. You have it all figured out man.

Giant label EMI was sold in 2012 for about $4B total (recording + publishing rights went to separate companies). So yeah, buying up labels would be more money, much more, but that's something Apple has more than it knows what to do with. And it would be a much better investment -- not only would they be able to reduce their costs per song to about 0 cents because they wouldn't have to pay anyone, but they could increase rates on competitors. That's not even taking into account publishing rights for commercials, cover songs, etc.

 

[Mockenrue]

Apple has truly lost it's edge.

Doesn't all the industry understand? CONSUMERS DO NOT WANT TO RENT MUSIC!!!!! THEY WANT TO OWN IT!!!!

I want to not only stream the music, but I want to download it and keep it forever, and ever, and ever, etc.

Depends on your listening patterns. I listen to hundreds of new songs every month. Almost every time I sit down, I listen to new bands and albums that I find through playlists and music discovery. I also listen to MANY new releases... I enjoy the experience, but it would cost me a fortune to buy them all. I have my favorites that I revisit too, but subscription music has been my preference for about 6 years.

 

[DTphonehome]

People don't seem to get this.

From john Gruber's Daringfireball:

http://daringfireball.net/linked/2014/05/08/beats

UPDATE: Numerous people are wondering if it’s all about streaming rights from the music labels — i.e. rights that Apple couldn’t get on its own (because the music labels have long resented iTunes’s dominance in digital music downloads), so they’re buying a company that negotiated those rights on their own. The problem with this theory is that those licenses (to my understanding) aren’t transferable in the event of an acquisition. Music label executives may be dumb, but they’re not that dumb.

 

[Warbrain]

Doesn't all the industry understand? CONSUMERS DO NOT WANT TO RENT MUSIC!!!!! THEY WANT TO OWN IT!!!!

Record label financials say otherwise. Sales are down, streams are up, streams are making up the difference in revenue lost from sales.

 

[cosmic68]

I think you're right when it comes to true music fans or musicians themselves. But a large part of today's customer base are the teens and pre-teens who only want the ability to play whatever's trendy and cool, over and over for a few months, until it's no longer cool. Then they'd rather pretend they never had those songs in the first place, and they move on to something else.

Unfortunately, my pre-teen daughter fits this mold precisely. She *loves* her Beats audio subscription. Before that, it was just a big hassle for all of us when she'd fill up her iPhone or iPod with all the random material she said she wanted -- only to have to delete most of it out and replace it with other content, every 60 days or so. (Really, it was all pop and country music garbage that I wouldn't waste the disk space holding onto anyway!)

You are exactly right. For me and the people I know it's an age thing. I'm older and I generally prefer to own my music (I'm 45). My younger friends are highly amused by this. They are happy to listen to their music whenever they want, originally on YouTube and now on services like Spotify. Plus they don't mind tinny speakers...or sub par audio quality. It's not important. It's all about the immediacy of it.

They (teens/youngers) are the future and the way this business is going. Apple with its decline in music sales are realising that and are now, once again playing catch-up.

It makes me sad to see Apple really chasing its tail with this stuff. iPhone 6 size being a perfect example. It's taken far too long. Everything is taking an age for them to 'get it'.

 

[Warbrain]

From john Gruber's Daringfireball:

UPDATE: Numerous people are wondering if it’s all about streaming rights from the music labels — i.e. rights that Apple couldn’t get on its own (because the music labels have long resented iTunes’s dominance in digital music downloads), so they’re buying a company that negotiated those rights on their own. The problem with this theory is that those licenses (to my understanding) aren’t transferable in the event of an acquisition. Music label executives may be dumb, but they’re not that dumb.

Gruber admits he doesn't entirely know. Beats is created by people within the industry. You have no idea what terms they managed to get because of that.

 

[dnicholson101]

Hardware.

I'm just not a fan of the beats hardware. Even though I know it's mostly about the streaming service beats offers. I hope if the acquisition goes through, I hope Apple can improve their (Beats) hardware.

 

[Mak47]

The more I look at this rumor the more interesting it becomes.

First, in terms of the contracts that Beats has in place...Apple can probably do better anyway--they're Apple. 800 million users vs. 200,000 for Beats. Apple doesn't need to care about their licensing agreements.

iTunes Radio is pointless. It's unpopular and offers nothing different than Pandora--arguably less. It also makes no money for Apple. No one is choosing an iPhone/iPad so they can get iTunes Radio and iAd hasn't caught on yet.

I've been tinkering around with the Beats Music service and as much as I dislike the majority of their headphones--the music service is the total opposite. It's well made, has a deep catalog and really smart curation. This isn't computer based curation, at least not right out front. There are human beings with knowledge about music putting this stuff together. I don't care how much money Apple has, somebody either knows how to make a great playlist or they don't. Beats has shown that they do.

There is an interesting social aspect to the service as well. Being able to follow artists and share playlists is huge. This is what people want--it offers more than simply buying and owning does and more than simple streaming.

People under 30 have traditionally been the tastemakers in music, but since Napster, they haven't been buying anything. A good sharing/streaming service gets their money flowing again. Apple can do this more effectively than Beats can on its own.

The headphone business is interesting. Why couldn't sensors go in headphones? Hell, why couldn't a Siri based OS and a cellular/wifi radio go in them? Access the entire Beats/Apple streaming service right on the headphones. Those things are certainly big enough.

 

[Chupa Chupa]

From john Gruber's Daringfireball:

http://daringfireball.net/linked/2014/05/08/beats

UPDATE: Numerous people are wondering if it’s all about streaming rights from the music labels — i.e. rights that Apple couldn’t get on its own (because the music labels have long resented iTunes’s dominance in digital music downloads), so they’re buying a company that negotiated those rights on their own. The problem with this theory is that those licenses (to my understanding) aren’t transferable in the event of an acquisition. Music label executives may be dumb, but they’re not that dumb.

Well we'll soon find out. Because if there are no rights that xfer then Cook is dumb. I'm not a huge Cook fan, but he's not dumb either. He's making the biggest deal in Apple history for reason. I would hope for his sake it's a good one or he is gone by Christmas.

 

[jonnysods]

Android version of iTunes? Yes please.

 

[MacNut]

I still use iTunes too (because I like Korean music and it's not on Spotify) so I would rather ditch Spotify and have all my music on iTunes.

Why would you want to use iTunes, one of the worst software programs ever made.

 

[Frankied22]

I think it all comes down to the growing desire for newer generations to just rent stuff, and own little to nothing. I am 25 and I grew up buying CD's and then ripping them. When the iPod came out I was so ecstatic and would load it up with all my purchased music. I used to buy DVD's of my favorite movies and then I repurchased a lot of them on Blu-Ray later down the road. Now, I couldn't be bothered to drop $10+ a month on CD's or digital albums. Nor can I be bothered to spend $14-30 on blu-rays. What is the point of "owning" all this stuff? It just fills up space, and the reality is if we got to the point where we could pass it down to our children or whoever that they probably wouldn't even be interested in it. How many of you like the books, movies, or music your parents listen to? Not only will they not care about our likes, but they won't want to store it all. If I am in my twenties and am already done with most physical media, I can't even imagine what my children's lives will be like. Music and movies are so perfect for digital distribution because its all about the content. You can just stream music or stream movies/tv shows. You don
t need to hold the case in your hands to appreciate it. You know how many of my blu-rays I have watched more than 3 or 4 times? Probably 10% of them.

Why spend $10+ per album when you can just pay $9.99 a month (or $4.99 a month for students on Rdio/Spotify) and have access to millions of songs. You would be amazed at how many new artists you discover using these streaming services. Also, you can download songs to your device for offline playback so it's not like you have to be online at all times to listen. It would cost me hundreds of dollars to purchase all the albums I listen to on a streaming service. At some point it is just worth it to pay a monthly subscription. The same value can be said about Netflx (granted they take forever to get new episodes or movies).

Right now you can listen to any song, album, playlist, or radio station on Spotify desktop/web for free with ads. On Spotify mobile you can shuffle artists albums and listen to radio stations for free with ads. On Rdio desktop/web you can listen to radio stations ad free and any song/album for free with ads. On Rdio mobile you can listen to radio stations for free without ads and shuffle artists songs for free with ads. That is pretty hard to compete against when all you offer is buying individual songs for $1.29, albums for $9.99+, and radio stations for free with ads (unless you pay $24 a year for iTunes Match)

 

[tkermit]

Should this go through, we'll have a bunch of HP laptops out there with Beats audio in them, proudly advertised with colored stickers on them.

So will Apple mail these people updated stickers with little white Apple logos on them and the red Beats logos inside the apples? Then the competitor's product can help advertise for Apple!

Stranger things have happened...

 

[Zerilos]

From john Gruber's Daringfireball:

http://daringfireball.net/linked/2014/05/08/beats

UPDATE: Numerous people are wondering if it’s all about streaming rights from the music labels — i.e. rights that Apple couldn’t get on its own (because the music labels have long resented iTunes’s dominance in digital music downloads), so they’re buying a company that negotiated those rights on their own. The problem with this theory is that those licenses (to my understanding) aren’t transferable in the event of an acquisition. Music label executives may be dumb, but they’re not that dumb.

I suspect mr. Gruber knows no more about this than you or I. He initially assumed this was all about headphones. Apple gains nothing if all they are paying for is rights to the name 'Beats' they're not that stupid.

 

[petsounds]

Why spend $10+ per album when you can just pay $9.99 a month (or $4.99 a month for students on Rdio/Spotify) and have access to millions of songs.

Because I support musicians. They get @#$E$ on streaming deals. And no they can't make that up just touring and selling merch.

You get what you pay for. Cheap prices = cheap, throwaway music. It's like the old adage: "Fast, cheap, or good. Pick two." In this case, it would be more like, "Fast & cheap, or good. Pick one."

 

[Frankied22]

Because I support musicians. They get @#$E$ on streaming deals. And no they can't make that up just touring and selling merch.

You get what you pay for. Cheap prices = cheap, throwaway music. It's like the old adage: "Fast, cheap, or good. Pick two." In this case, it would be more like, "Fast & cheap, or good. Pick one."

Except in this case cheap prices is still getting me access to all the good musicians. It's not like the library is just full of junk.

 

[unobtainium]

From john Gruber's Daringfireball:

http://daringfireball.net/linked/2014/05/08/beats

UPDATE: Numerous people are wondering if it’s all about streaming rights from the music labels — i.e. rights that Apple couldn’t get on its own (because the music labels have long resented iTunes’s dominance in digital music downloads), so they’re buying a company that negotiated those rights on their own. The problem with this theory is that those licenses (to my understanding) aren’t transferable in the event of an acquisition. Music label executives may be dumb, but they’re not that dumb.

Gruber doesn't know the specifics of this case. No one here does. But the fact is, it simply doesn't seem to make any sense unless the rights are transferable.

 

[pally]

$3.2 billion dollar placeholder

So they get a placeholder, or a "maybe" for their 3.2 billion. It sounds like a company with money falling out of its pockets looking for a way to spend it with little regard for the value of money. What a waste of energy and resources.

 

[subsonix]

So is this confirmed now? I truly don't get this rumor.

 

[MacNut]

Because I support musicians. They get @#$E$ on streaming deals. And no they can't make that up just touring and selling merch.

You get what you pay for. Cheap prices = cheap, throwaway music. It's like the old adage: "Fast, cheap, or good. Pick two." In this case, it would be more like, "Fast & cheap, or good. Pick one."

You think the labels care about artists more if they sell CD's vs streaming? The Labels would pay the artists crap either way.

 

[petsounds]

Except in this case cheap prices is still getting me access to all the good musicians. It's not like the library is just full of junk.

That's because streaming hasn't totally taken over the market yet. There's still some good bands out there. But many less quality records in the last few years coming out than there used to be. I'm sure we'll see that downward trend continue as streaming becomes the de facto way of accessing music.

 

[bbbb4b]

Interesting take here:

http://finance.yahoo.com/blogs/dail...s-for--3-2-billion--smart-move-145319949.html

 

[usarioclave]

Maybe the failure of iTunes radio is because nobody wants to stream music, and the people that are streaming music already run Pandora/Spotify i.e.: the market is saturated.