Game changer: Apple buying Beats could radically transform the digital music business

“There are still many unknowns about Apple’s reported acquisition of headphone maker Beats Audio, but one thing is already certain,” Janko Roettgers writes for GigaOM. “The deal, if it goes through as reported, is going to be a game changer for digital music.”

“Twelve months from now, the digital music world is going to look very different. Instead of startups trying to convince consumers to spend $10 for music per month, it will be dominated by big companies trying to convince consumers to buy their devices and buy into their platforms,” Roettgers writes. “Digital music will become a value-add. It won’t exactly be free — licenses are still expensive — but it will increasingly be bundled with other products and services, and come with long-lasting promotional offers meant to convince you to buy phones, headphones, data plans, or in the case of Prime, all kinds of stuff.”

Roettgers writes, “The pioneers of digital music may finally see their vision of mass consumer services become a reality in the near future — but chances are that these very pioneers and their startups won’t be part of that future anymore.”

Read more in the full article here.

MacDailyNews Take: For some unknown reason, we’ve got a strange craving for beets.

[Thanks to MacDailyNews Readers “Dan K.” and “Sarah” for the heads up.]

Related articles:
Jimmy Iovine in talks to join Apple as a ‘special adviser’ to Tim Cook, sources say – May 9, 2014
Apple wants Beats for Jimmy Iovine, not bad headphones or an untested streaming music service – May 9, 2014
Apple close to buying Beats Electronics for $3.2 billion, Reuters sources confirm – May 9, 2014
Dr. Dre boasts of Apple-Beats deal in YouTube video, on Facebook – May 9, 2014
If Beats deal happens, Apple is acquiring a fad, not quality, and that is troubling – May 9, 2014
If Apple’s really buying Beats, here’s hoping it’s brilliant in a way which isn’t immediately obvious – May 9, 2014
The reason for Apple’s $3.2 billion interest in Beats? Spotify – May 9, 2014
Apple buying Beats Electronics: Its best idea since the iPad? – May 9, 2014
Why would Apple want to blow $3.2 billion on Beats Electronics? – May 8, 2014
Apple in talks to buy Beats Electronics for $3.2 billion – May 8, 2014

50 Comments

  1. A premium Apple Beats iPhone package has a 62.5% margin – what does the press not freakin’ get about this?

    fie on all you troglodyte naysayers – Apple BEATS!! I think it is a brilliant idea to own a company that makes a $300 accessory to the iPhone with a much higher profit margin – hello – this is a no brainer. $300 iPhone + $300 headphones = $600. iPhone has a 45% margin (approx) and Beats prob. has an 85% profit margin. As a package this pumps the iPhone/Headphone purchase to around 62.5%.

      1. Do you understand how overpriced Beats are? What do you think is in those $300 cans… diamonds?

        After shipping, marketing, duties, taxes, etc. there are many things I can order OEM made in China and mark up the price 10 to 20 fold. These products specifically include headphones and cameras.

          1. I can buy remote controlled 100 amp stereo audio amps for cars all day long from Alibaba for <$10, as an example. If I sent those same suppliers a Beats headphone set I'll bet I can get copies for $10.

    1. Yup, because you have to dig deep into the consumer shifts, the marketing.

      Apple isn’t into the streaming audio game with hardware while the TV, Earbuds, Headsets, Audio correction for people with hearing problems, mini-speaker sets all are open markets.

  2. what precisely does Beats offer to “transform the digital music business” ???

    Beats bought MOG in 2012 for an estimated $16 million and implemented DRM to ensure streamed music expires if users don’t keep up the payola ($120/year).

    Now Cook thinks this racket is worth $3.2 BILLION ????????????

  3. There’s much more to this than people think. Perhaps Beats was developing some fantastic new hardware/audio chip that no one knows about. You also have to look at the value of the brand, particularly among teens and young adults. To them, Beats is it and everything else is crap.

  4. Dont think the beats headphones will last Apple will buy for the assets the music streaming service and discontinue the brand the would you pay between £160 – £299 for beats plastic headphones when you can buy something Like B&O or B&W headphobes for same price and much better build and quality

  5. Junk products and Lovine is so full of himself that Ives will declare war on him within 90 days. Lots of large ego’s at Apple these days. SJ would never approve of this as Lovine to Apple will lead to MSFT and Google to signing on much broader talent without spending 3 Billion dollars.

    This is getting ridiculous.

  6. While I am still waiting for the Apple Press Release that this story is a hoax, I am of the belief that if Apple really is willing to pay $3 billion for this company, there must be something there that we just don’t know about. Apple, even under Tim Cook, is frugal in its acquisitions. I just don’t believe that this would happen without some very strategic thinking with very sharp pencils.

    1. Finally- an intelligent comment! Tim Cook is no dummy, and he’s there because Steve knew that. Apple knows what they’re doing. They would still have billions and billions of dollars, and if they sold lousy headphones no one would pay for, they’d disappear. I don’t think Apple intends to make “rap phones,” so don’t have a cow, man.

  7. Try XBox music and you will realize what a top notch music service should look like similarly to using Google maps as compared to Apple Maps. Beats just launched their music service hence how can it be any better than the beloved Apple service?

  8. If Apple were to buy the rights to all Major Sports in the US, then Tim would have the leverage he needs to get Apple TV off the ground. Such a no-brainer. As far as hip-hop, Beats, Dr. Dre and Lovine, I could care less.

  9. If Apple wants to go after the pre-paid wireless market, etc. to grow its smartphone marketshare like all the analysts keep begging, Beats co-brand cracks that nut like a nut laser. Ow my balls.

    1. Oh Damn… I just figured this out – this is to kill carrier partnerships with Beats that cut iTunes out of the equation at the smartphone point of purchase – $14.99 a month for your family at AT&T and free for 90 days – Tim Cook, quoting the Big Lebowski quoting George HW Bush said to beats with $3.2 billion, “this aggression will not stand”.

      http://www.att.com/shop/wireless/beats-music.html

  10. Well, Some would say that Apple has been doing that for over a decade. Ever hear orf iPod and iTunes?

    Sure, Apple hads had decent headphones, with only one slight attempt at an upgrade pair. Beats could change that. But this is not some sea change for Apple. Nor do I see any other company positioned to do this now, except maybe MS, who cannot do it correctly.

  11. Today I bought “Bridge Over Troubled Water” CD (13 songs) for five bucks at Walmart. Ripped into iTunes shortly thereafter.

    That is value in my pocket, not Apple. 🙂

    1. But others like myself would prefer to just pay the $10 and get the album on iTunes. This way I don’t have to drive to Walmart and back, I don’t have to rip the album, and it’s on my iPhone, iPad, Macs, and Apple TVs without me needing to sync to each and every device. I haven’t bought a CD in years for this reason.

        1. I value my time. And if I drive to walmart, that’s probably a gallon of gas. That’s $4.00. I think it’s worth thinking about the carbon cost as well.

          There’s value and punctuation you’re missing.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.