Beats Music Royalty Report Reveals Low Subscriber Numbers, Even Lower Payments To Artists
An early royalty statement shows Beats Music with fewer than 111,000 subscribers as of March 31st and payments to songwriters of $0.000126 per stream. The document, shared by David Lowery on The Trichordist, arrives amidst strong signs that Apple acquiring Beats, including its popular headphone business, for a reported $3.2 billion.
The royalty report is a snapshot of Beats early days, and does not include many of the subscribers that the music streamer added with its AT&T family promotion or any acquired since adding in-app subscriptions to its iOS apps. But it does paint a picture of a music service that did not instantly grab consumer interest, despite an aggressive launch and multi-million marketing campaign.
But what really bothers musician and songwriter Lowery, is the royalty rates that Beats is paying. "Never mind that Beats only has 110k subscribers," he writes. "Is Apple Buying Beats simply because of the ridiculously low royalty that songwriters are paid?"
ANALYSIS:
While Lowery scores points for sharing the royalty statement, his resulting arguments fall short on two fronts. The rights and rates negotiated by Beats are almost certainly not transferable to Apple, if the sale is completed. And the manner in which songwriter payments are calculated is an industry-wide issue and not specific to Beats.
In fact, this likely sale could give the music industry a huge opening to restructure how streaming music services pay. But, as with a myriad of previous missed opportunities, that's a chance the big players are unlikely to take.
Beats itself is even more unlikely to lead any charge to improve compensation. As one commenter wrote, "The Chairman of the World’s Largest Record Company co-owns and co-founded Beats… Should we expect that he Is FIGHTING for artists’ compensation?"
APPLE + BEATS: Apple should cut all ties and run! Help stop it and sign.
The market has clearly communicated that it doesn’t like the idea of a Beats deal with Apple. However, most naysayers and the media have struggled to properly articulate the reasoning for the bearish sentiment.
This is how it should be communicated:
– Beats should be viewed as a fashion company, as they offer very little value-add from a technology perspective. Beats main market are teenagers who currently view the earphones as a “cool” fashion statement. This is the root of the concern, as we all know that fashion statements quickly become “uncool” due to overexposure, boredom, or something more “cool” coming onto the market. It would be fair to say that the best days of the Beats “coolness” are behind it, and the sunset looms as they may soon become “un-cool”. Paying $3.2 billion for a company that will probably fade away into “un-coolness” soon is probably not a wise acquisition. One cannot buy long term “coolness”, as it must be created or earned.
– Apple could relatively easily create a superior headphone product at a fraction of the cost of the Beats acquisition, and Apple products are still very much “cool” and in fashion
– Apple could improve its streaming service for a fraction of the cost of this deal, and Apple subscriptions and profitability would remain leaps and bounds ahead of the Beats service.
On balance, very poor judgement at the top of Apple if this deal actually goes through.
http://www.forbes.com/sites/gordonkelly/2014/05/09/why-apple-has-lost-the-plot-with-3-2-billion-purchase-of-beats-by-dre/?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=395530&utm_campaign=0
http://blogs.wsj.com/corporate-intelligence/2014/05/09/apple-spend-3-billion-on-beats-lose-5-billion-in-market-cap/?mod=yahoo_hs
http://seekingalpha.com/article/2206943-apple-would-find-it-difficult-to-integrate-beats-electronics
http://www.businessinsider.com/apple-beats-rationale-2014-5
https://www.hypebot.com/hypebot/2014/05/apple-in-talks-to-buy-beats-electronics-32-billion-said-to-be-mostly-for-headphone-business.html
http://www.digitalmusicnews.com/permalink/2014/05/09/7reasonswhyapplebuyingbeatsisbadidea
SIGN HERE:
http://www.ipetitions.com/petition/stop-apple-beats-acquisition
I disagree that beats is on it’s way down. I haven’t found a better wat to listen. Certainly not spotify or pandora. I could see beats really taking off. I listen for hours a day personally and I’m a 38 year old man. Not exactly the teenager market.