Beats Music Will Try to Do What Spotify Hasn’t, Using Marketing Muscle and AT&T
Streaming music is popular. Paying for streaming music, via subscription services like Spotify and Rhapsody, is still a niche activity.
Now Beats Music will try to change that. The service, led by producer Jimmy Iovine and backed by more than $60 million in venture capital, was supposed to launch last year but will finally go live January 21.
Here are the basics:
- Like every other subscription music service, Beats will give users all-they-can-stream access, without ads, for $10 a month.
- Unlike some rivals, notably Spotify, Beats doesn’t have a free offering, except for a trial period.
- Beats will have a deep integration with AT&T, which means it will be the only major U.S. music service (for now) with links to a telco or cable company. AT&T will bundle Beats with its service plans, which means subscribers can pay for it with their monthly phone bill.* And AT&T will offer its customers an exclusive family plan for $15 a month, which will give users the ability to stream music on multiple devices at the same time. (You don’t have to use AT&T to get Beats, which will be available for iOS, Android and a few other platforms.)
- It’s going to have a very big marketing push. Beyond the partnership with AT&T, Beats boasts a tie-up with Target. And later this spring it’s going to be promoted heavily by talk show host Ellen DeGeneres — which means that millions of middle Americans who’ve never heard of Spotify, Rhapsody or Rdio are going to get introduced to the idea of paying for a music subscription.
Beats will argue that what sets it apart from its rivals is that it has spent a lot of time thinking about how to make the service useful to regular people. The main idea, which Iovine has been talking about for a year, is that Beats has hired lots of humans to help select music you might want to hear, instead of leaving that up to algorithms or your friends’ recommendations.
Here’s how Iovine put it a year ago: “Other [music subscription] companies, these services, all lack curation. They call it curation; there’s no curation. That’s what we did as a record label, we curated. There’s 150 white rappers in America; we served you one.”
I’ve played with Beats a bit, and it’s pretty slick. I haven’t had time to assess whether its human-guided playlists are smarter than the ones you can get from services like Spotify, but you guys will be able to decide for yourselves shortly.
But if Beats works, it won’t be because it converts Spotify users — it will be because it signs up people who’ve never paid for streaming music, period.
Spotify used a big push from Facebook, and an ad-supported free version, to make some headway in popularizing subscriptions. But by the company’s own admission, it’s still not a mainstream concept yet.
And bear in mind that there are lots of people who are already streaming all the music they want, legally and for free, primarily from Web radio services like Pandora and from YouTube, which has become the de facto streaming service for a generation of music fans. It’s going to take a lot of work to get those guys to pay up.
*One thing the AT&T partnership won’t include is “sponsored data,” where Beats picks up the tab for the bandwidth its music eats up. Last week AT&T announced that it would start offering that option to brands and companies, which raised alarms with net neutrality advocates and an eyebrow with the FCC.