Beats Music rumored to have only 111K paying subscribers

Beats Electronics launched its US-based music streaming service in January of this year, entering a crowded market dominated by Pandora, iHearRadio and Spotify. As echoed in an earlier report, Beats Music may be struggling to attract paying customers, with a small subscriber base of only 111,000 users in March 2014, claims a report in music industry blog Trichordist that was relayed by The Guardian.

These subscribers numbers were taken from a royalty report, leaked to the Trichordist, that lists the number of customers who are paying for the service. Of these accounts, 49,371 are individual accounts, while 61,621 are “family” accounts that can have up to five users. This 111K figure places Beats far behind its competitors, such as Spotify that has 6 million paying subscribers globally and more than 1 million in the US as of March last year.

Apple is rumored to be buying Beats Electronics, at least partially for its streaming music service. Though Beats’ music subscriber base is comparatively low, Apple may be eyeing the service’s potential for growth as streaming services expand to become the dominant method for listening to music.

A recent chart from Statista and published by Business Insider reveals this growing trend towards streaming music and away from traditional downloads, which has been the focus of iTunes since its launch. In the year between 2013 and 2013, downloads have declined 1 percent, while streaming has jumped 49% and now accounts for a fifth of all US music revenues.

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Beats Co-Founders May Be Unveiled as Apple Execs at WWDC

According to people familiar with the matter, Apple may unveil Beats co-founders Jimmy Iovine and Dr. Dre as executives at the company’s June Worldwide Developers Conference. With more evidence popping up every day that Apple will indeed be acquiring the headphone maker and streaming music provider, it would make sense for the company to use WWDC as a stage to welcome Iovine and Dre to the company.

Apple is reportedly closing in on finishing the deal which entails Dre and Iovine selling the Beats brand to Apple for a decent $3.2 billion sum, and its announcement is expected soon. Jimmy Iovine and Dr. Dre are both expected to assume roles on Apple’s executive board, but there is not yet evidence to confirm that these roles even exist. “One person said Iovine would likely oversee all of Apple’s music strategy and handle relationships with labels and publishers,” writes Billboard.

Apple has felt pressure in relationships with music labels recently as paid iTunes downloads have taken a dip, and some analysts say that Apple’s quick push to acquire Beats represents nervousness about partially missing the music streaming train. Apple’s iTunes still serves as the world’s leading digital music store, but the company has had to propose drastic measures such as exclusive albums for download ahead of streaming services to help remedy continually falling sales numbers.

Notably, if Apple were to give Dr. Dre some stage time at WWDC, it wouldn’t be the first time. Dre, also known as Andre Young, took the stage about 10 years ago via video to personally congratulate Steve Jobs on the launch of the iTunes Store and the iPod. Beyond this, the acquisition is equally as tied to Iovine, who met with Steve Jobs to talk about a music service in 2003, and met with Tim Cook to talk about the Beats streaming service last year.

Reuters reports that the acquisition will be announced at some point within the week, and Apple’s WWDC is set to happen June 2-6. It looks like we’re in for a busy couple of months in many different respects. What do you think about Dr. Dre being in an Apple executive role?

[Billboard]

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