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

[Uofmtiger]

I think it makes a lot of sense personally. I have no idea what a reasonable price would be, but the profits made off the headphones would pay off this deal in less than a decade. It's almost like getting the streaming service for free. The service launched Jan 21st and in 79 days picked up 111,000 paid subscribers in the USA alone (Beats still not available outside of the states). Extrapolated this works out to over 500000 paid subs in the first year, more when they expand to Europe and Canada and Asia. This really is not bad.

MOG reportedly had 500,000 subscribers, so they apparently lost at least 4 in 5 of those subscribers. Beats music wasn't built from the ground up. They bought MOG and went down from there.

I am in the middle of a two month trial. I preferred MOG and feel they would have been better off just adding their curation algorithm to MOG's just for you section and adding Beats superior marketing machine to grow that service rather than destroying it and coming up with something less useful to many users. On the other hand, if they can get Apple to pay 3.5 billion, their marketing machine may have been busy working in other areas.

 

[a0me]

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?

I think you could say the same thing about almost any other entertainment form. It has simultaneously become easier -and cheaper- than ever to produce and distribute music, videos/movies, comics, books, etc... on a worldwide scale. 20 years ago it would cost a huge amount of money (and time) to create and then distribute it to a few thousands potential customers. Nowadays, for a fraction of that cost you can reach a few hundred million potential buyers.

 

[iChrist]

So you've used all three and conclude Beats is the worst? I haven't used Beats but on the latest Macworld podcast Chris Breen was really talking it up.

Yes, they are free to try. Chris Breen is a shill.

 

[Rogifan]

Yes, they are free to try. Chris Breen is a shill.

And most of your posts are anti-Apple so why should I believe you? Since Apple doesn't own Beats who exactly is Breen shilling for?

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Meanwhile, while Apple is throwing away 3 billion dollars on Ballmer type deals, At&T is buying Direct TV for 50 billion. Wouldn't it make far more sense for Apple to save their billions and go for someone like DirectTV who already has all the network deals, infrastructure and paying customers Apple TV craves sewed up?

DirecTV doesn't offer any ala carte programming options which is what cord cutters want. They do have some VOD options but the HBO Go app on my Apple TV has way more choices than DirecTV's HBO VOD channel.

 

[jhwalker]

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?

They couldn't care less how many subscribers the service currently has - they want the streaming rights for the large music library.

 

[simonmet]

I'm as confused and baffled as the next guy.

We haven't seen Apple branch out in to the $billion plus acquisition for a long time (ever?). And why Beats? On the face of it and all the numbers it looks like a poor investment.

Having said all that Apple has the cash and it's not a huge risk on their part. Remember all the others like Microsoft make acquisitions that are far more dubious (nay dud) than this. I mean FaceBook and Occulus? Really? Microsoft and Nokia? etc etc etc.

In the end I think it's got as much to do about simple brand image than anything else. Beats headphones are everywhere and are pretty popular with young people that don't know better. In other threads I got shouted down that it's not about the headphones but that is by far their biggest and most visible asset. This evidence seems to strengthen the argument that it's more about the headphones and the youth who buy them than was argued.

If it were about subscriber base or industry-deals does that not mean Apple has or is failing in their own negotiations on the matter despite being the biggest and most powerful voice in the industry? If the buyout was about these deals and contacts then that seems to make the acquisition even less value.

I can see Apple introducing or refining their own range of headphones in partnership with Beats and that Beats will keep its brand name, but only time will tell.

 

[Veinticinco]

Even Jack got three magic beans for the price of a cow

This deal looks increasingly worse by the day. Then you have Dre and his sycophantic homies boasting about his Forbes listing on Youtube before it's signed, and Iovine coming across like a wannabe Keith Richards with a diploma in business and bull excrement. Ugh.

Apple seriously need to walk away from this ill-advised venture. Flushing a lot of money not to mention kudos down the toilet.

 

[Breaking Good]

If there's one side-effect of Apple's (and others') success that annoys me, it's how the device is everything, the music (or movie, or app) is now just a cheap commodity. People will pay hundreds of euros/dollars for an incremental iOS device upgrade, and complain about cents for content producers.

It was only a few years ago that the business model wad flipped. There was no money in hardware. The money was in the content and software side. This is why Microsoft only very recently got into the hardware side of the business.

Within two years everyone who wants a smartphone will have one. Yes, they will upgrade them every two years, but sales will no longer be growing. At that point you will see the market flip again.

 

[0098386]

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.

Incidentally it's getting that way with games but rather than destroying the "big game" market, mobile games have created another market entirely. I sell my PC and console games from £5-10, but could you run a successful business selling games in that price bracket on mobile? Nope!

A lot of people just want cheap, disposable content. They don't want full quality, full experience. They want to stream low bitrate TV shows and films, they want to rent music rather than buying it and they want free games full of adverts and microtransactions to ruin gameplay. It's sad in a way. I can't imagine how tough it is for musicians these days but "big" games are still doing great and I hope that doesn't change.

 

[Zerilos]

MOG reportedly had 500,000 subscribers, so they apparently lost at least 4 in 5 of those subscribers. Beats music wasn't built from the ground up. They bought MOG and went down from there.

I am in the middle of a two month trial. I preferred MOG and feel they would have been better off just adding their curation algorithm to MOG's just for you section and adding Beats superior marketing machine to grow that service rather than destroying it and coming up with something less useful to many users. On the other hand, if they can get Apple to pay 3.5 billion, their marketing machine may have been busy working in other areas.

The MOG subscribers were not automatically signed up for Beats. In fact MOG's service still exists until the end of this month. Beats started buisness with no subscribers. It may be that upon hearing news of the
sale, Many subscribers jumped to Spotify.

Also many of MOG's 500,000 subscribers took advantage of the free service, which as far as I can tell doesn't exist on Beats.

 

[roadbloc]

Nothing compared to Spotify.

 

[RightMACatU]

= $126,000

???
8,000,000,000 x 0.000126 = .... Jeopardy music please!

 

[OrangeInc]

So apple. the company that really exploded with the ipod music player is buying a company that is also involved with music technology etc? This must be the twilight zone or something. Heaven forbid that apple may be trying to invest in the new generation of music consumers because the previous generation of music consumers are whom got apple to where they are right now.

 

[Zerilos]

So apple. the company that really exploded with the ipod music player is buying a company that is also involved with music technology etc? This must be the twilight zone or something. Heaven forbid that apple may be trying to invest in the new generation of music consumers because the previous generation of music consumers are whom got apple to where they are right now.

Umm...they've done it before.

 

[TsunamiTheClown]

I'm sorry now that I complained when there were all those Angela Ahrents stories pummeling me.

lol don't for get Flappy Birds as well.

 

[rillrill]

.000126 per play? wow.

this is what will kill streaming...along with the FCC and cable companies. artists should not work with beats/apple at all. as a former indie record label owner, i would never agree to this pittance. i'd rather press a 1000 copies on vinyl and sell them out of my cars trunk before i'd make this deal.

 

[Uofmtiger]

The MOG subscribers were not automatically signed up for Beats. In fact MOG's service still exists until the end of this month. Beats started buisness with no subscribers. It may be that upon hearing news of the
sale, Many subscribers jumped to Spotify.

Also many of MOG's 500,000 subscribers took advantage of the free service, which as far as I can tell doesn't exist on Beats.

That's my point. All MOG subscribers got two free weeks of Beats when they took over MOG. The service wasn't compelling enough to switch for most of them.

If they are counting free subscribers, there are a lot of people with three free months from AT&T and all MOG users have two free months right now. Are they part of the 111,000? Not sure why anyone would be impressed at this point. It is too early to tell if this is a complete flop or a success.

Also, if there was a model in place for free users that made money on ads, I don't see how chasing those people off and on to Spotify is a good decision.

All I can see is that Beats killed off a good service with 500,000 subscribers and replaced it with an inferior service that currently has 111,000 subscribers. All that after a HUGE marketing campaign that launched during the Super Bowl.

 

[thep33t]

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.

I respect your opinion. But you are mistaking music itself with the music industry as a whole.

Technology is disrupting many fields, music included. Streaming media does not change the way the music is made, or any part about it, it just changes the economics of it. If it forces some who are musicians now to stop making music, or find other revenue streams or ways to market themselves, so be it. It might make less music out there on a whole, but do not mistake or claim it kills music. Music is an artistic endeavor which will not be stopped by changing distribution, it will simply be disrupted.

Hopefully there will be a few less superstars as streaming becomes more commonplace.

 

[rhoydotp]

They couldn't care less how many subscribers the service currently has - they want the streaming rights for the large music library.

Agreed ... there's way too many short-sighted people on this forum.

 

[Ericstephen]

I'm as confused and baffled as the next guy.

We haven't seen Apple branch out in to the $billion plus acquisition for a long time (ever?). And why Beats? On the face of it and all the numbers it looks like a poor investment.

Having said all that Apple has the cash and it's not a huge risk on their part. Remember all the others like Microsoft make acquisitions that are far more dubious (nay dud) than this. I mean FaceBook and Occulus? Really? Microsoft and Nokia? etc etc etc.

In the end I think it's got as much to do about simple brand image than anything else. Beats headphones are everywhere and are pretty popular with young people that don't know better. In other threads I got shouted down that it's not about the headphones but that is by far their biggest and most visible asset. This evidence seems to strengthen the argument that it's more about the headphones and the youth who buy them than was argued.

If it were about subscriber base or industry-deals does that not mean Apple has or is failing in their own negotiations on the matter despite being the biggest and most powerful voice in the industry? If the buyout was about these deals and contacts then that seems to make the acquisition even less value.

I can see Apple introducing or refining their own range of headphones in partnership with Beats and that Beats will keep its brand name, but only time will tell.

How can you say it's a poor investment without seeing the actual profits Beats takes in? Beats has been rumored to have revenue approaching 1.4B in 2013. These revenues come from their hardware sales, nothing else. I imagine these $300 headphones they sell have a $30 bill of materials. Do you expect a company that sells massive-margin hardware to be worth less than their yearly revenue? I think this deal is about the hardware. Apple knows that headphones are not going away anytime soon. There actually will be huge growth in that area as tech improves. And what does Apple have? Earbuds?!

I can't stand Apple refusing to go into different areas. Hopefully this is a sign of things to come. Apple needs to spend some of their cash, even if that means that they'll make a poor buy here and there. They need to get into search. Google is what's going to prevent Apple's growth, no one else. Buy Yahoo already, Apple.

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???
8,000,000,000 x 0.000126 = .... Jeopardy music please!

Lol. Good one.

 

[6EQUJ5]

thep33t - you said virtually same thing as jamesryanbell but he obviously knows more of what he's talking about than you.

I respect your opinion. But you are mistaking music itself with the music industry as a whole.

Technology is disrupting many fields, music included. Streaming media does not change the way the music is made, or any part about it, it just changes the economics of it. If it forces some who are musicians now to stop making music, or find other revenue streams or ways to market themselves, so be it. It might make less music out there on a whole, but do not mistake or claim it kills music. Music is an artistic endeavor which will not be stopped by changing distribution, it will simply be disrupted.

Hopefully there will be a few less superstars as streaming becomes more commonplace.

 

[Ericstephen]

Samsung spent $14 billion in marketing in 2013. Apple just spent $3B for a company that has had the most successful marketing campaigns in recent years. Beats was nothing a few years ago. Now, they own the headphones market. Apple's marketing targets middle-age suburbanites. Things need to change.

 

[rp2011]

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DirecTV doesn't offer any ala carte programming options which is what cord cutters want. They do have some VOD options but the HBO Go app on my Apple TV has way more choices than DirecTV's HBO VOD channel.

Who gives a **** about HBO, and once you own DirectV you can do whatever you want. Most people I know just use DirecTV's built in DVR and record their programing to view whenever they want. Who watches live TV anymore other than for news and sports?

 

[TrentS]

Yup.

Beats headphones have already been sold in Apple Stores for a long time. I assume they are doing well or they would have been pulled from the shelves long ago.

So it would seem that Beats does in fact go along just fine with Apple, regardless of people's opinions here (including my own I should point out).

Big companies make mistakes too. Heck, Apple at one point "fired" Steve Jobs!!

 

[Larry-K]

And who has substance over style?

Most B to B companies that don't have to appeal to children to stay in business.