Why did Apple buy Beats Music?

It’s been confirmed by Apple that they will be paying around $3 billion to acquire Beats Electronics and Beats Music. Dr Dre and Jimmy Iovine – the co-founders of Beats – are set to make around $2.6 billion up front, while the rest will trickle through over a few years. A lot of buzz has been created by this story as it’s one of Apple’s biggest ever acquisitions, yet the Beats Music brand has been struggling since its launch in January 2014. To get an idea of what Apple was acquiring, I took a look at Beats Music’s web traffic with SimilarWeb PRO.

 

Beats Music

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Daily visits to Beats Music in January 2014 by SimilarWeb PRO

 

Beats Music started life under the working title of ‘Daisy’ and uses complex algorithms to create personalized accounts for a music streaming service which advises users on music they may enjoy. The product was launched to much hype and fanfare on 21st January 2014 and was preceded by an all-star cast launch party. I used SimilarWeb PRO to investigate how many desktop visits Beats Music experienced on its launch date and found it was close to 800,000! Traffic fell fairly sharply after this and daily visits were close to 125,000 a week after the launch.

 

Beats Decline

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Monthly visits to Beats Music between November ’13 – April ’14 by SimilarWeb PRO

 

I wondered how Beats Music had got on in their first few months to see if there was an indication of why Apple were so interested in purchasing them. SimilarWeb PRO highlighted that Beats Music had experienced a bumpy start with a nearly 50% decline in visits between January ’14 – April ’14. Despite Beats success in selling headphones to the masses, the world hasn’t quite taken Beats Music to its heart and subscriber figures are estimated to only be around 110,000. You also have to take into account that some providers are offering a 90 day free trial, so many of these 110,000 users may not even be paying.

 

Can Apple Help?

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Comparison of monthly visits to Beats Music and Spotify between November ’13 – April ’14 by SimilarWeb PRO

 

The market leaders in streaming music online are Spotify and SimilarWeb PRO shows just how far behind Beats Music are – close to 50 million visits per month! This is a huge difference, but can Apple’s genius marketing team help them close the gap? Many users have criticized the fiddly UI of Beats Music, so Apple’s expertise in simplifying platforms could solve this issue quite easily. The last 10 years have also seen Apple purchasing heavily in the music rights library, so Beats Music will now be able to offer a wider selection. There are benefits for Apple too, of course, as hooking up with Dr. Dre who has extensive contacts paves the way for Itunes exclusive albums from big names. Dre and Iovine also have considerable experience in running record labels which is another area of the music industry that Apple are looking to branch into. Whatever happens, I suspect that the conversion rate will begin to rise for Beats Music as Apple help them market their product more efficiently.

About the Author -

A newcomer to the world of internet marketing, but gaining fresh insight at a rapid pace. A fan of changing technologies, writing to entertain and, most importantly, retro trainers. Based in the UK.

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