Apple is rebuilding Beats Music and aims to roll it out next year as an iTunes feature. The company executives said that they wanted to acquire Beats Music as a way to deal with the plummeting sales of music download. It is predicted that digital music sales in iTunes will suffer from decreasing sales in 2014 by as much as 13 to 14 percent.
The recording industry had been affected by illegal music downloads that allowed people to make paying for music an optional decision. iTunes had somehow helped to slow down the industry's decline. After ten years, however, digital music sales plummeted as well. Most of the blame had been placed on the new services that provide streamed music. Apple iTunes Radio, launched last year, enabled users to listen to music at no cost. As a result, the company must have, in one way or another, undercut its own sales.
As digital music sales continue to drop, it has become more obvious why Apple is keen on the Beats' acquisition. Next year, Apple will be launching Beats Music not as a separate product but as part of iTunes. The company hopes that the move may help to generate some revenues.
"Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family. Music has always held a special place in our hearts, and we're thrilled to join forces with a group of people who love it as much as we do. Beats cofounders Jimmy Iovine and Dr. Dre have created beautiful products that have helped millions of people deepen their connection to music. We're delighted to be working with the team to elevate that experience even further. And we can't wait to hear what's next," said Apple on its website when it formally announced the acquisition.
Apple has to get really serious about entering the streamed music industry if it wants to become one step ahead the other services such as Deezer, Google Music and Spotify. Understanding the fact that Beats Music had only 250,000 paying subscribers as of May and that it only runs live in one country which is the U.S., Apple decided that it's best to roll it over into iTunes which, on its part , has 800 million users and 400 million credit cards on its file.
Launching iTunes next year together with Beats' streaming service may entice sales of Apple's high-margin devices such as iMacs, MacBooks, iPads and iPhones. Moreover, Apple may just be able to negotiate a cheaper subscription rate of around $5 month instead of the $10 subscription that Spotify charges.
