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The big picture behind the Apple and Beats deal

The deal is now closed Apple acquired Beats for $3 billion and on onstage at the Code Conference Eddy Cue said it very clear - "You just heard why we did this deal — it's about music," and according to him Beats Music is "the first music subscription service done right."

Streaming music services changed the game it is a lot more easier now to have all of the world music available for streaming than to try synching and organizing your huge collection of MP3 across different devices and cloud services and Apple had to do something to manage keep its advantage over Google and Microsoft.

According to Tim Cook and what he said for Recode, "Music’s always been at the heart of Apple. It’s deep in our DNA. We’ve sold Macs to musicians since the beginning of Macs. And we accelerated the music industry with the digital music revolution, with the iPod and the iTunes music store."

With the 21%growth of streaming and subscription of US Music revenues for 2013 you might say Apple knows what are they doing.

The Speculations

Most of the people find the entire idea behind this acquisition a complete no sense for Apple, since the company have better branding than anyone else. When the analysis began the idea that Apple bought Beats was because it is lagging behind all of the streaming music competition like Spotify, Pandora and etc. But then again Apple is not a near to dominate the streaming market since YouTube dominates it because the music is already free there and there still not enough people willing to pay for streaming.

So what then, some of the most speculated reasons are that Apple want Jimmy Lovine which is already a big name in the marketing and Apple needs people with vision. Then again according to Peter Csathy who is former president of Musicmatch and acquired by Yahoo in 2004 for $160 million - “Beats has a unique brand—it speaks to a nice young demographic, which is really interesting to marketers. When I think about Beats, I think about it as a lifestyle, I think of it as a media company, not just a hardware and music-focused company.”

And with a possibility of Beats IPO which is speculated after hiring chief financial officer An De Vooght there is a lot going on behind this deal.

The Big Picture

In the end creative companies need creative people. Lovine knows nothing about code and very little about electronics but his vision and his approach with Beats and what he did is something that Apple needs. And lets not forget that Beats now can be bundled with the new Apple devices which is one of the biggest and the most logical reasons why this deal happened.

Overall for the end user it comes to what your device can do and what apps you have more than the competition. With the approach of Beats for streaming music which is going in the right direction since it is one of the best streaming services among the users and with the help of Apple they are going to change the streaming game for sure. Apple is notorious for its standard in the music so they will surely wants to keep it that way.

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