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Friday, May 9, 2014

What's Next For iTunes Radio With Apple Set To Acquire Beats Electronics For $3.2 Billion?

The music industry's transition through the digital age continues with the news that Apple is on the verge of acquiring Beats Electronics for $3.2 billion. The headphone-maker also provides the streaming music service, Beats Music, and Apple taking over the company raises the question of what now for their own iTunes Radio?

The days of downloading music may well be over with streaming services popping up everywhere. There are plenty of streaming music service providers these days but only a few of them stand out. Pandora Internet Radio is arguably at the front of the pack with others like Spotify, YouTube, and Rdio vying for marketshare in what's become a shark tank-like playing field.

Beats Electronics was founded by Jimmy Iovine and hip-hop artist Dr. Dre, who interestingly criticized Apple in the past for being the reason behind loss in sound quality due to digitalization of music. Apple on the other hand, who many believe revolutionized music delivery with its iTunes Store and iPod, has been trying to get a piece of the music streaming pie with iTunes Radio.

Initial reviews of Apple's streaming service have been mixed. While iTunes Radio is free for iOS users it has attracted criticism over poor song selection and the ads it runs. Ad-free service is available for iTunes Match subscribers but does anyone actually use iTunes Match?

In my opinion, iTunes Radio will undergo transition over the next few months with a subscription-based service becoming available from Apple. Currently, a subscription of Beats Music costs $10 a month which is where other providers are too with their pricing. Much like Pandora, there will be a free version and a paid version.

Apple is weary of Spotify which is quite popular as a subscription service (remember Pandora is free unless you get Pandora One), and with the acquisition of Beats will look to attract customers. As far as the hardware from Beats goes, the brand is more likely to remain as-is (or may be called Apple Beats in the future?). Apple already sells Beats headphones in their retail and online stores.

Whether Apple's streaming service gets incorporated with CarPlay in the future remains to be seen.

Source: Financial Times

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