Apple Inc. Is Not Shutting Down Beats Music [UPDATE]

Apple Inc. Is Not Shutting Down Beats Music [UPDATE]
ElisaRiva / Pixabay

Despite long-standing rumors, Apple Inc. (NASDAQ:AAPL) will apparently shut down the streaming music service Beats Music it acquired in May in the near future. A September 22nd article in TechCrunch says the closure of Beats Music has been confirmed by five sources, including senior employees at Apple and Beats.

The TechCrunch sources noted that many engineers from Beats Music have already been transferred onto other projects at Apple, including iTunes. The exact date the  music service will be shut down or what Apple will do with streaming have not been announced, but all the sources agreed Apple plans to sunset the Beats Music brand. One Beats Music source reported a number of teams on the non-technical side of the company have been told to maintain “business as usual.”

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Apple hints Beats Music was on borrowed time

One obvious hint that Beats Music wasn’t in Apple Inc. (NASDAQ:AAPL)’s plans was that the new iPhones did not come pre-installed with Beats Music. Moreover, Beats Music wasn’t mentioned during the Apple Watch event, although Beats radio and fire-and-forget playlists would seemingly work well on a wearable. Beats Music was being advertised to new users on iOS 7 as recently as August, yet the only time Beats Music any mention at the September launch event was when Apple CEO Tim Cook said the new U2 album could be purchased there.

Of note, the Apple Watch features a with a blue play button that instantly started playing songs when tapped during a demo.

It’s all about iTunes

The tech Crunch reports argues that given how Apple minimizes fragmentation, closing down Beats Music makes sense. Operating a second music service together with iTunes would be inefficient and force people to learn a whole new interface. Furthermore, Beats Music’s CEO Ian Rogers was also put in charge of iTunes Radio.

A phase out of Beats also fits well with reports that the acquisition was really about getting Jimmy Iovine and Dr. Dre’s talent on board, and the headphone business, not the firm’s fledgling streaming music business.

Dropping Beats Music means Apple Inc. (NASDAQ:AAPL) can focus on its flagship iTunes music product with  well over 800 million users.

Analysts note that Beats Music’s growth was hurt its late start compared to competitors like Spotify, Rdio, Google Music and Pandora. Its strategy was to appeal to users through curated playlists and mood-based radio, but the service was not gaining much traction. Free trials and multi-month demos led more than 5 million people to try Beats Music as of May 1st, but only 250,000 decided to pay for a subscription after the trial.

UPDATE: A later article from re/code quotes Apple exec Tom Neumayr as saying the TechCrunch report is not true. The re/code article goes on to suggest that perhaps Apple may stop using the Beats Music brand, but the service itself is not going away, ie, it will be incorporated into iTunes.

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