Apple has a crazily powerful digital store, used by hundreds of millions of customers. But if you want to sell something there it will cost you: In almost every case, Apple keeps 30 percent of the purchase price on whatever its users buy.

Beats Music, the new subscription music service that launched in January, figures that’s worth it.

Beats updated its iPhone app today, and now lets users subscribe to the $10 a month service from within the app, using iTunes’ billing system. That means Beats, and the music labels that license their stuff to the service, will give up $3 a month on every subscription sold through iTunes.

Beats CEO Ian Rogers says the decision to sell within the Apple app was fairly straightforward: More than half of Beats users use iPhones, and it’s very hard to get an iOS user to subscribe if you don’t sell in-app.

Two other music subscription services — Rhapsody and Rdio — have also agreed to sell subscriptions within Apple’s app, though Rdio raised the price for for in-app subscriptions from $10 a month to $15 a month to accommodate Apple’s tariff.

But Spotify, which is much larger than all three of the services, hasn’t made the move. Spotify does have a free, ad-supported tier available on its mobile app.

Selling in-app subscriptions is “what you do when you want subscribers,” Rogers said. “If you don’t care if people subscribe or not, and you’ve got a free product, maybe then you wouldn’t do it.”

The move may raise questions about Beats’ performance since launch. Last month Bloomberg reported that Beats was claiming, in investor pitches, a staggering 70 percent conversion rate among users trying the service via an AT&T promotion. But industry chatter is that Beats’ overall numbers aren’t blowing anyone away.

Rogers says his company is doing fine. “We’ve had far more people try the product than projected, ” he said. “Clearly the marketing works. The conversion rate on the AT&T plan is off the charts. It’s safe to say the biggest problem is coverting iOS users, and we’ve just fixed that.”

Beats should also have an iPad-specific version of its app available soon, Rogers said.



3 comments
KS2 Problema
KS2 Problema

 I've been a subscriber to THREE (3) different music subscription services that Ian Rogers has put in the ground: MusicMatch On Demand, Yahoo Music Unlimited, and the soon-to-die-but-temporarily-reprieved MOG.


In each case, he took a system that worked and put it out of business.

When he was hired to (in a sense) turn MOG into Beats (as he'd turned MusicMatch On Demand into the arguably inferior Yahoo Music), my heart sank.

But I remained hopeful. I did TWO separate trials of Beats Music. I REALLY wanted it to work for me. But it's hopeless. It may be garish and blinged out  but the user interface hides a stunted, ridiculously limited  player with very little user control. 

I finally gave up and found that the all-320 kbps Google All Access has improved greatly since I tried it last year. It has more or less the same '20 million' tracks as everyone else but a far superior player user interface. (It's painfully plain looking, but I use the Chrome Stylebot extension and the Gray Flannel Cool restyle to give it a nice, sharp look.)


Today Beats bites the bullet.

I wonder how long it will be before they bite the dust?

marcv
marcv

 I don't think this Beats service will survive.  Too much entrenched competition and they are not doing anything much better to get anyone to switch or use them instead

KS2 Problema
KS2 Problema

@marcv  I'd say they're doing worse in many ways. Worse than the old MOG, for sure, in the eyes of many MOG users I've monitored since leaving there. Beats doesn't even have a play queue. You can play a song, album,  or playlist but you can't add new songs or albums or playlists to the queue of what's playing -- because there is no queue.

If you want to add something, your option is interrupt what's playing and play the new song/album/playlist now or stick around until what's playing is over and then manually start the new whatever.

It's bizarre that they thought Beats  was ready for prime time.

Yet MOG, which Rogers and Beats are dismantling, worked well -- Though not as well as All Access, I'm afraid. MOG had a lot of outages and a tendency to stop in the middle of things or not advance to the next song at times. Still it was WORLDS more sophisticated than Beats.

But, you know, Beats tells people what they want to listen to and there are a certain cohort of people who appear to need that.

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