Date
22 September 2017
Apple is expected to pay US$3.2 billion for Beats Electronics, a music streaming and headphone maker co-founded by rapper Dr Dre. Photo: AFP
Apple is expected to pay US$3.2 billion for Beats Electronics, a music streaming and headphone maker co-founded by rapper Dr Dre. Photo: AFP

Apple makes tracks for new music revenue stream

What a difference a decade makes. For many of the 13 years since Apple Inc. got into the digital music gig, the maker of the iPod and iPhone was able to call the tune to the labels.

But lately it’s been struggling to move to the beat of the streaming revolution heralded by Pandora Media Inc. and Spotify. Its iTunes Radio service has failed to impress and some put the company as much as two years behind the market leaders.

That’s why the American multinational is expected to splash out more than US$3 billion this week to buy Beats Electronics, the entrepreneurial offspring of rapper Dr Dre and record producer Jimmy Iovine.

Beats Electronics is well known for its high-priced headphones but it also runs a music streaming service that gives subscribers unlimited access to its library for a US$10 monthly fee.

Digital music downloads are waning and the big growth area now is streaming, with many users now tending to pay more to “rent” tracks than shop for offerings in online stores like iTunes.

Apple may be late to really buy into the idea of streaming but if it doesn’t it could risk missing yet another step as the industry beat goes on.

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RA/SK

 

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