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Beats Music's Subscriber Base Pegged at Just 111,000

A new screenshot shared by The Trichordist (via The Guardian) allegedly reveals that the Beats Music service had only about 111,000 subscriber accounts during the month of March, indicating that Apple is indeed likely to be purchasing Beats for some combination of its headphones business, streaming technology, brand, and industry connections rather than the existing subscription service.

An acquisition by Apple would undoubtedly boost exposure for the Beats Music service, and potential tie-ins with Apple's existing iTunes services would offer a strong platform for growth, meaning that Apple is likely relatively unconcerned with the small subscriber base.

beats-royalty-sheet
The leaked royalty sheet breaks down the subscriber numbers according to the available plans, and of the roughly 111,000 accounts, just under 50,000 were individual accounts while 61,621 were joint "family" accounts available through a promotional arrangement with AT&T. Beats Music has not released subscriber numbers, but this leaked sheet appears to corroborate an earlier report from Billboard that claims Beats' early subscriber estimates have been "disappointing" to music label executives.

Apple had reportedly been impressed with the subscription conversion rate for Beats, although it is not entirely clear from the chart where those users are accounted for. Roughly 70% of total plays fall under a "promotional royalty rate" category, with the remaining being subject to standard royalty calculations, although it is unclear what criteria cause a play to be placed in either of the two categories.

Looking at the individual subscriptions, the numbers show that Beats pays out approximately 65% of its revenue to rightsholders, similar to other streaming services, with labels receiving by far the largest chunk and songwriters receiving only a tiny slice through their performance rights organizations (PROs).

Apple is reportedly acquiring Beats Electronics for music industry veteran Jimmy Iovine and musician Dr. Dre, both of whom may play a crucial role in Apple's future music strategy. The Cupertino company also will receive a high-margin headphone business that could be help Apple attract a wealthier and younger clientele.

Top Rated Comments

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10 weeks ago
I'm sorry now that I complained when there were all those Angela Ahrents stories pummeling me.
Rating: 26 Votes
10 weeks ago
You don't pay $3.2B for two dudes. Drop the pretense.

And nice job ignoring what that screenshot is emphasizing: extremely low royalty rates for content producers "artists".
Rating: 20 Votes
10 weeks ago
For those who care:

3,200,000,000
/
111,000

=

$28,828 per user.
Rating: 13 Votes
10 weeks ago
.000126 per play? wow.
Rating: 10 Votes
10 weeks ago

Apple did it to acquire the brand... Apple has a LOT of users that will buy that brand.. :D


Guess you're correct. Anybody willing to buy a IPhone 5C, iPhone 4 in India, Mac computer, $20 USB cable, $400 iPad 2 or $400 iPad mini is gullible enough to buy Beats headphones with a Apple logo on the side.
Rating: 10 Votes
10 weeks ago
So at 110,000 subscribers and a value of the headphone business at reported $1 billion. The rumored price is $3.2 Billion. So $2.2 Billion for 110K => ~$29,000 per existing subscriber.

The price has got to be a lot lower than the rumored $3.2 Billion.
8 months ago when Beats bought its shares back from HTC, Beats was worth about $1 billion based on the price paid for 25% from HTC.

I say this is a bad deal for Apple and me as a share holder.
Rating: 9 Votes
10 weeks ago
Everyone here seems like they have this acquisition all figured out. You clearly don't know why Apple is paying that price, neither do I. You clearly don't know the full extent of the acquisition and the longterm benefits for Apple (if any), neither do I. Let it go, stop being so bitter, it doesn't affect you personally.
Rating: 9 Votes
10 weeks ago
I'm a full-time musician/songwriter. Streaming has absolutely killed music. One ten-thousandth of a cent per spin doesn't pay the bills. Music should be regarded as something with intrinsic value. If this keeps up, music will get even worse than it already is today...because the time people spend on pouring into their art will go down. Sure, there's a small percentage of musicians that will do it anyway, but think of all the good music that would never be, simply because talented artists *can't afford* to spend as much time as they need on their art?

So much music that could've been will be lost. What a shame.
Rating: 9 Votes
10 weeks ago

What do you want for $3.2 Mil. :)

Alzheimer's
$3.2bil


My father has Alzheimer's. I don't think you have that. Perhaps it's some other disease?
Rating: 8 Votes
10 weeks ago

The Cupertino company also will receive a high-margin headphone business that could be help Apple attract a wealthier and younger clientele.


Yes, young and wealthy clients are demos where Apple is really falling short. :rolleyes:
Rating: 8 Votes

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