Date: Thursday, May 29th, 2014, 08:04
Category: Announcement, Apple, Hardware, iTunes Radio, Retail Store, Services
Pardon the Sonny & Cher pun, but it had to be done. Yesterday, Apple confirmed that it has, amidst much rumor, hints, and speculation, acquired both Beats Electronics and Beats Music. The cost of getting the maker of the popular headphones, speakers, and audio software, as well as the streaming subscription music service, turns out to be about $3 billion total. That amount consists of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time according to the Apple press release. The deal is expected to close in fiscal Q4, subject to regulatory approval.
In Apple’s official press statement regarding the purchase, which happens to be Apple’s largest purchase in its history, Tim Cook said the following;
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Tim Cook, Apple’s CEO. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”
Co-founder of Beats, Jimmy Iovine, contributed to the release as well;
“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
As many speculate, the real gem of the acquisition for Apple is the subscription music service, something Apple thus far has been unable to accomplish on its own. Apple launched its own streaming music service, iTunes Radio, in September 2013, which is ad-supported and has gotten a relatively poor response since its introduction. This may put it in a corner along with Ping, Apple’s short-lived music-related social network. Apple definitely makes a point of highlighting it in the press release. It remains to be seen if Apple finds a way to merge this with iTunes Radio, by adding a subscription model and better station generating algorithm, or if they will rebrand and relaunch the whole thing, silently sweeping iTunes Radio under the rug. So far, every indication is that Beats will still operate on its own, at least for now. I’m kind of curious to see if the timing of this is not an accident that it is announced the week before WWDC, with Apple discussing the software ramifications of the deal during the conference. Apple’s history shows that they never make announcements arbitrarily.
What do you think this means for music subscriptions? Do you subscribe to any music services currently or use iTunes Radio? Would you pay Apple a fee to have music you don’t have streamed to your Apple devices? Will it beat out Spotify?! SO MANY QUESTIONS! Many can’t be answered difinitively now, but if you have any guesses let us know in the comments or on the Facebook page.