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

ThunderSkunk said:
This whole thing makes me sad.
Apple should be announcing radical world-changing technology no one else can afford to produce.

Instead, we have this.
wtf
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Apple's central philosophy is that they make the best products. Other companies make their computers out of plastic because that's the cheapest suitable material. Apple make their computers out of aluminium and glass because those are the best materials to make it from.

Apple have never set out to make an expensive product; it just ends up that way because they don't optimise for low-cost like other manufacturers do. But the goal was never to make something more expensive just because.

They've never cared about the markets, either. Other companies (Dell, HP, etc) were making profits for a short time while on their race-to-the-bottom, but Apple always stood firm and believed the profits would come if they just kept making the best products. Now the PC industry has been almost totally bled of all profits - Dell collapsed and had to go private, and the biggest PC OEM (HP) is trying to get out of the business altogether. Apple, and Steve Jobs specifically, ignored the markets calls to join that race-to-the-bottom and now they're finally being proved right. They couldn't care less about figures like market cap. or stock prices; that's never been a motivation for Apple.

Apple does seem to have lost its focus somewhat.

The question they would be asking is "how do we give iPods/iPhones/Macs the best music experience on any platform?"

Back in the day, that involved creating a tightly integrated music store where people could legally purchase music straight from their computers and load it directly to their devices. That experience was much better than you got on any iPod competitors.

The world has changed. Cloud services proliferate. Streaming is now the preferred method of listening to music, which presents difficulties for Apple because they are typically platform-agnostic. Apple needs to look at that question again from a modern perspective and come up with new ways to give their devices the premier experience for music.

There are lots of ways to do that. Apple could partner with (if not acquire) Spotify to give iOS/OSX devices exclusive access to higher-quality music streams or more permissive free tiers, all integrated in to the system. That's one example of how Apple can give their devices an edge. I just can't think of any way that buying Beats exclusively improves Apple's platforms - the headphones are cross-platform and the streaming service is mediocre and can't compete with Spotify (especially the social aspect).
 
So we have rubbish headphones that anyone who knows anything are calling over priced junk.

We have a poor subscriber base for the music service.

What do we have?

A fashion logo ?
 
This is not criminal, it's antebellum.
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This is pre-war? Or is this note suggesting this per-play rate is equivalent to slavery? Or does the note-writer just not know what antebellum means?
 
jamesryanbell said:
I'm a full-time musician/songwriter. Streaming has absolutely killed music. One ten-thousandth of a cent per spin doesn't pay the bills. Music should be regarded as something with intrinsic value. If this keeps up, music will get even worse than it already is today...because the time people spend on pouring into their art will go down. Sure, there's a small percentage of musicians that will do it anyway, but think of all the good music that would never be, simply because talented artists *can't afford* to spend as much time as they need on their art?

So much music that could've been will be lost. What a shame.
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I disagree. I don't think music has intrinsic value, I think of it as an almost useless entertainment industry like pro sports and churches or writing. I think music should be free like all books, and you make your living by it from shows or merch.
 
techwhiz said:
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.
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$1.2 billion REVENUE 2013. High margins.
Less than 3x multiplier of revenues.

Apple 2013 $170 billion revenue. Marketcap $500 billion.
Less than 3x multiplier of revenue.

Apple paid what they thought Beats was worth, end of story. Not some insane amount to hire a couple of industry insiders.
 
Chupa Chupa said:
MR readers stop being bitter? C'mon. That's like asking birds not to chirp or dogs to wag their tail. 😀 Agree w/ your post, but dealing with bitter people is the price of admission for reading these forums.
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Best. Post. Of. The. Day.

Is there a MacTruths forum somewhere? 😀
 
springsup said:
Apple have never set out to make an expensive product; it just ends up that way because they don't optimise for low-cost like other manufacturers do. But the goal was never to make something more expensive just because.
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I'm hoping you're being facetious.
 
Piggie said:
So we have rubbish headphones that anyone who knows anything are calling over priced junk.

We have a poor subscriber base for the music service.

What do we have?

A fashion logo ?
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Basically Apple with the loss of Jobs has a lost a powerful negotiator, that simple. So they are basically buying beats as a middleman/broker to get some deals from the music industry. It was said that Apple was only interested in their music service but the beats guys insisted that it was "buy everything or nothing".

It should buy their headphones division and use it as landfill for their upcoming new campus.
 
Piggie said:
So we have rubbish headphones that anyone who knows anything are calling over priced junk.

We have a poor subscriber base for the music service.

What do we have?

A fashion logo ?
Click to expand...
It's the triumph of style over substance, a time-honored Apple approach.
 
kagharaht said:
I'm not sorry. Spending 3+ Billion Dollars ( if true ) is just plain stupid.
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Beats made $1.5billion in 2013, which means that if it continues, they make their money back in two years. Not too shabby for a hardware company.
 
MOFS said:
Beats made $1.5billion in 2013, which means that if it continues, they make their money back in two years. Not too shabby for a hardware company.
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Revenue does not equal profit, and the Beats fad could end at any time in the age of social media.
 
Rogifan said:
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
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And you know what happens next, right? Slowly the products become less about tech quality and more about "fashion," "look," etc. That is not something that I am looking forward to at all. Apple is supposed to make fantastic TECH products that also happen to be designed aesthetically exceptionally well. Not designed aesthetically exceptionally well that also happen to be TECH products. That type of subtle shift I do not think is good for the long term position of Apple. Once the quality starts to be degraded, all bets are off. So no, I do not think this would be a good thing at all.
 
Chupa Chupa said:
MR readers stop being bitter? C'mon. That's like asking birds not to chirp or dogs to wag their tail. 😀 Agree w/ your post, but dealing with bitter people is the price of admission for reading these forums.
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Lol. So true. The complete meltdown people experienced here over otherwise minor announcements is fascinating.

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Reds622 said:
And you know what happens next, right? Slowly the products become less about tech quality and more about "fashion," "look," etc. That is not something that I am looking forward to at all. Apple is supposed to make fantastic TECH products that also happen to be designed aesthetically exceptionally well. Not designed aesthetically exceptionally well that also happen to be TECH products. That type of subtle shift I do not think is good for the long term position of Apple. Once the quality starts to be degraded, all bets are off. So no, I do not think this would be a good thing at all.
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Or Apple just wants to get into the subscription based music streaming buisness and you're overreacting. I'm guessing it's option 2.

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cube said:
Revenue does not equal profit, and the Beats fad could end at any time in the age of social media.
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Or it could go up massively or remain at its current level. For what it's worth, their 2013 profits were $400 Million.
 
Last edited:
Couldn't Apple slap their logo on their own crappy headphones and steal market share away from Beats? In that high end category where style is more than substance.
 
Warbrain said:
No, the number of users has not. The technology? Yes.
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There was quite a to-do made by some over their supposed ability to add ~30k paying subs per month. Not to mention the speculation that they already had ~550k paying subs and that they were about to experience a 750k subscriber tidal wave of subs from their deal with AT&T.

Granted that was all mostly a heap of speculative BS.
 
Now you know why Apple is buying Beats mainly for headphone business?

Because NO ONE RENTS MUSIC!!!!!! This is indicative sign that people prefer to OWN music, not rent.

Like Steve Jobs said, no one wants to rent music. They want to own it. Still is true today.
 
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