On Streaming: Apple, Beats & Spotify

22 thoughts on “On Streaming: Apple, Beats & Spotify”

  1. Enough with the ‘Steve would have done this’ stuff. No one knows what he would do, and, frankly, at this point what does it matter? Suggesting that Apple fears its brand isn’t ‘cool’ enough if they’re purchasing Beats for the brand value, is a bit shortsighted. Nike purchased Converse for the brand value about 11 years ago, spending ~$300M. Since then Converse brings in over $1 billion in revenue each year. Beats could be something similar here. With Apple’s foresight and backing revenue could easily eclipse the sales price in 2-3 years and grow even more beyond that.

    It’s true Apple needs to focus more on cloud-based services, however it doesn’t mean they cannot do that as well as grow the Beats brand and invest in other endeavors.

    1. I think you just agreed with what I said. Also to be clear, I didn’t even say what would Steve Jobs do, I said Steve Jobs’ Apple would try and do Xx. Different than saying steve jobs wouldn’t do this.

  2. The reason why Apple failed in the cloud is due to their device strategy. No cloud provider can be successful with a single device strategy. Microsoft is realizing it now but Apple …..

  3. It does seem like there is a lack of strategic vision here and somewhat sad Apple needs to buy rather than innovate. Seems like a high price for an acquisition that is more me too than a leap forward? But maybe Apple know more what follows next…If you were a shareholder would you pay that much for 2nd rate platform, and so few customers relatively speaking. Clueless on cloud. I struggle to believe the apparent lack of lead here by Apple but seeing is believing and it doesn’t seem to be very jpomwd-up? But they have surprised us before and the obsession with trawling through what Steve J would do needs to stop soon. It needs leadership. Appple that is and some inspiration. Seemingly this deal is lacking the substance to give any key advantage.

  4. I really think this move is simply to get the 16-22 year olds who will soon be moving off of their parent’s contracts to buy iphones.

    And it’s a good move.

    Silicon Valley/startup twitter loves iphones but on black twitter, edm twitter, etc. I see so much talk of Samsung phones.

    Apple is a hardware and digital distribution company. Cloud services? Why? What does it matter what cloud service people are using as long as it is on Apple hardware?

  5. ALSO, didn’t Apple just hire someone to get them more product placements in films and whatnot? This Beats move is clearly an extension of that. The brand does need more support especially amongst young people. Young people that never had an ipod and don’t associate Apple with the cool points the scored in the mid 2000’s.

  6. I’d just note that, personally, my user experience with Spotify is not good. i’ve been using it for years (paid subscription) but i find the UX poor and the insane number of outbound connections unacceptable. It’s pure inertia that keeps me paying the 5€ a month. That’s just me, but maybe it indicates a basis for competition from somebody.

  7. I worry when I disagree with people I’ve respected for a long time. And every competent audio geek I know says Beats are like Bose – attractive design, effective marketing, crap quality, overpriced.

    In the same vein, I enjoy and appreciate your critical analysis. The deal doesn’t make sense on the surface and I always tend to disagree with buying companies instead of hiring talent.

  8. There are only so many places on the body that wearables make sense. Headphones are one of the few proven wearable technologies. Headphones that effectively have an entire music library built in (via streaming) = the iPod of the future.

    Beats have huge market share and brand power at the top end of the market, regardless of actual sonic quality. They have replicated the cool factor that made the iPod the must-have device. Apple could enter the headphones market and try to compete from scratch but that’s very risky as Apple headphones have no reputation or cachet. Whereas they can easily add their technology, whatever it may be, into Beats and capture most of the high end of the market in one fell swoop. They have the money so why not?

  9. Om,

    Beats sold off the Topspin assets you refer to in your post – they went to BandMerch/Cinder Block about a month ago. To my knowledge, what Beats retained from that acquisition was the Artistlink stuff, essentially a way to promote content in Spotify, MTV, and Beats Music itself.

    Less clear is what happened to the Promo Exchange, which leaned heavily on Topspin platform data.

    In any case I would consider it a non-factor in the acquisition. As an employee of Topspin in the first few years (’07-’11) I’d be flattered to think Topspin had something to add to the iTunes ecosystem; the reality is that would be one hell of an integration… and really, not an amazing business to get into.

    Far more likely it’s for Beats Music and perhaps some aspect of the physical business.

    Whatever the case and however it shakes out, I hope it results in some better software thinking at Apple. There’s a real lack of vision there when it comes to software (especially iTunes), which is absurd given their clout and their ability to pay for talent.

      1. Bandmerch/Cinderblock acquired the artist roster, but Beats kept the TopSpin technology. It was basically a fire sale and a way save face with TopSpin investors. They knew an Apple deal was in the works. What is more interesting is that Spotify continues to use the Artistlink platform, which will presumably be owned by Apple…or? When Jimmy and Ian first started talking about Daisy (which became Beats Music) merchandise was a core part of the message alongside human curation, but now you don’t hear anything about Artistlink in the context of the Apple deal. In my view, Artistlink is broken, literally. Links don’t work, point to tickets or CD sales, appears that nobody is minding the shop. Trent Reznor is not using it for Nine Inch Nails merchandise, neither is Jimmy’s boy Eminem….what does that tell you?

    1. Hopefully that happens, I’d be first in line! That might actually be possible-brands have been releasing designer versions of tech products for years-Prada for LG, Louis Vuitton headsets and MP3s…fingers crossed for Burberry!

  10. I don’t understand this deal. At All. Wouldn’t buying Spotify help them take the giant leap towards music streaming? Since, Apple always have had iTunes for Windows, an Apple streaming service (powered by Spotify) for Android, would only have helped them make in roads into Android user base.

    I think this deal begs the question, whether Apple approached Spotify. Did Spotify reject their offer?

  11. I wait for the day when a music service does something truly innovative. Apple, Beats, Spotify, Rdio, Mog, Lala and the lot have been walking the same line for a decade. The GUI gets a little slicker but they all suck for music discovery. They are geared for the majority who listen to the radio/Top 40 or the classics they’ve known about for 30 years. Someone needs to open that group up so they are exposed to new music. This is what the artists want, right? More listeners, concert goers and merchandise buyers.

    It seems like there are some obvious steps that one of these companies could take to improve this but everyone is playing it safe. Beats’ curated playlists are just another gimmick that doesn’t do enough. Discovery, notifications, education, awareness… all packaged and tailored to each listener’s habits. That’s what I want.

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