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.]

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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.

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