Music Business

The Latest Beats Apple Rumors Worth Paying Attention To

Beats AppleThe speculation surrounding Apple's possible $3.3 billion acquisition of Beats continues at a feverish pitch But some rumors are more persistent and coming from better sources than others. Here's the latest Beats Apple news coming from journalists and 'anonymous sources' that I trust:

1) THE DEAL ALMOST FELL APART  -  New lawsuits from former Beats associates and the fine print of what role Beats executives would play post-acquisition almost scuttled the deal.  But talks have resumed and are back on track.  

2) IT'S NOT AN ACQUIREHIRE, BUT…  -  While we don't buy the theory that the purchase is an acquirehire, Beats founder Jimmy Iovine and Dr. Dre will both play significant roles in the new combined company. Both have proven to be adept arbiters of taste and master marketers.  Dre also brings cache and Iovine is a proven deal maker.

3) IT IS ABOUT STREAMING  - While $1 billion a year in headphone sales and the cache and executive talent that come with it helps justify a $3.2 billion price tag, a major motivation behind the deal is that getting streaming right helps keep Apple in the music game. Download sales are shrinking and Beats Music allows Apple to be enter streaming with a mature and well designed offering.  Don't count Spotify and the others out, but the Beats Apple combo is a real competitor on day 1.

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Bruce Houghton on 05/23/2014 in Music Business | Permalink | Comments (5)
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  1. “a major motivation behind the deal is that getting streaming right helps keep Apple in the music game”
    I’ve seen nothing from the Beats Music app that makes it any better than any other offering from its competitors. It seems like a lot of hype and living off the brand name more so than being very innovative.

  2. If this comes to pass, there will be something other than headphones, streaming, or acquirehire that Apple gets, as they don’t really need any of those. I’ll believe it when it happens…

  4. For Apple or Amazon not to see streaming as a “dead end tunnel” proposition makes them equally ignorant to big three labels.
    Streaming is the best method of delivery and there is no alternative.
    Streaming Turbo-Napster / Spotify style leads to music industry dwarf land. 200M subs at $6 makes just $14B add $5B for YT style adds around free and you got $19B in 2020
    At that point iTunes and Amazon MP3 will be gone and global Radio will shrink from current $40+ to just $20B.
    All this fashionable activity for overall shrinkage of music related business.
    With current resources we can have vibrant $100 billion dollar music industry by 2020. It should be our common goal.
    As we speak we’re full steam to streaming shrinkage of music industry to just $14B in 2014.
    Sad numbers considering that inflation adjusted 1999 = $56 billion with zero growth over the years!

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