With Beats, Apple Could Buy The Future Of Music Instead Of Inventing It Again

When Apple opened the iTunes Store in 2003, the company launched the digital music revolution as we know it. Ten years later, you might pay Apple $1.29 instead of 99 cents for a song, but otherwise we’re still mostly living in the musical universe Apple ushered in. Nothing else has come along to disrupt the music industry at the scale of Napster, the iPod or iTunes—at least yet. 

But shhh … hear that? Once a distant underground rumble, seismic echoes of the streaming music movement are now starting to shake the walls. Last year saw the first yearly drop in digital music sales ever. Assuming that Apple’s much murmured-about $3.2 billion deal to buy Beats Electronics comes to pass, the acquisition could be actually pretty cheap earthquake insurance.

See also: Get Ready For The Streaming-Music Die-Off

Individually, on-demand streaming music services like Spotify, Rdio, and Rhapsody are starved for paid users, openly struggling for a bigger piece of a pie that isn’t even on the table yet (it’s still at the iTunes table). But collectively, these services become more than the sum of their parts—and more than enough to spook Apple into buying a little cheap insurance. (Oh, yeah, I guess Apple would score those flashy headphones, too.)

Streaming Music Rears Its Many Heads

Gaining traction as an even more effortless alternative to Apple’s pay-per-song model, subscription music services are finally generating some major tectonic moves, pushing digital song sales down 5.7% in 2013. Annual digital album sales slipped for the first time too, down 0.1% from 117.7 million to 117.6 million.

Considering that digital music sales weathered the 2008 financial collapse without contracting, it’s clear that would-be digital music buyers have stumbled onto a cooler, easier way to listen to music, even if it’s taken them a good ten years. It’s no coincidence that Apple is shopping for an on-demand streaming service right now; the times they are a-changin’. 

Apple remains the top dog digital music vendor, but if the market moves to a different model altogether, it won’t be pioneering this time around. In fact, Apple already tried to figure out a social music service and failed spectacularly(R.I.P.Ping).

We can’t just assume that Apple has some mind-blowing vision for the future of digital music squirreled away somewhere. These days, Apple isn’t light-years ahead like it was with iTunes and the iPod. The landscape is different now—and so is the company. Still, it deserves credit for breeding the iPod with a phone and spreading the iPhone gospel far and wide. 

Buying Stuff: Cheaper Than Innovation

The company’s crystal ball may not be quite as clear as it used to be, but while it was fogging over, Apple managed to stockpile a cartoonishly huge $159 billion in cash. 

Assuming that Apple does indeed buy Beats, it might just be easier to pay the fortune teller these days than to get a new crystal ball. Or pay the guy who paid the other fortune teller—in this case MOG, the on-demand music app that Beats acquired two years ago for around $10 million and remixed into its own on-demand streaming app.

In digital music, Apple needs only to maintain its lead into the next paradigm shift, and it’s already been working on that. Last September, Apple launched iTunes Radio, a Pandora-like streaming music service that quickly jumped to third place in overall streaming market share.

Not the industry prognosticator we once knew, Apple’s ear is to the ground like the rest of us, while its hands are in the deepest pockets around. We kind of miss when they weren’t quite so deep.

Facebook Comments