May 19, 2014 0 Comments
Streaming the future
Last week, rumours circulated that Apple is buying Beats Electronics for a massive $3.2 billion. Beats Electronics founded by legendary music producer Jimmy Lovine and rapper Dr Dre, produce trendy headphones and a streaming music service. If negotiations pan out, it would be Apple’s largest acquisition to date. So why would Apple shell out billions for Beats? Music-industry data shows that after years of steady growth, digital-music downloads around the world started declining last year as people turned to Spotify, YouTube and Pandora Media. The iTunes music store is one of Apple’s favourite treasures, and its income, relevance and dominance must be protected at all costs.
How does this arms race all end? Our prediction is that increased competition (with some big players at the table) will mean two things; continued revenue and margin decline for artists, and continued cost savings for consumers as service providers fight to grab market share.
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