Thought that Beats Music was D.O.A., a futile and silly attempt to challenge Spotify? That’s funny, because Beats Music might become bigger than Spotify in the United States, almost overnight.
According to confidential plans shared by executives close to both AT&T and Beats Music, discussions are underway to potentially ‘hand’ Beats Music nearly 2 million paying subscribers. And where would these subscribers come from? Muve Music, whose dying parent Leap Wireless (aka, ‘Cricket’) was acquired by AT&T last year.
Already, AT&T and Beats Music are collaborating on a discounted family rate plan, one that allows access for up to five subscribers (and 10 devices) for $14.99 a month. Both Beats, and the AT&T plan, were splashed last weekend during an ultra-expensive, Ellen Degeneres-fronted Superbowl ad.
Muve, of course, didn’t enjoy a similar spot, but they do enjoy a huge amount of paying subscribers. Back in July, Muve Music announced its 1.7 millionth paying subscriber, though executives discussing the service with Digital Music News said that number was now past 2 million. At last count, Spotify had just north of 1 million premium, paying subscribers in the US (Spotify hasn’t offered an updated subscriber count since March, 2013).
Based on the numbers, Muve has always been bigger than Spotify in terms of paying subscribers, yet the service is mostly unknown outside of a younger, lower-income demographic. Which means this is a perfect target for a Beats culture that revolves around traditionally urban sports like basketball and genres like hip-hop. Of course, mainstream America has traditionally taken its cues from that fulcrum of culture, and Beats has a proven track record for transitioning urban cool to the masses. “AT&T sees a chance to gain very significant branding out of this idea,” a second source relayed. “So they’re taking this pretty seriously given the presence of people like [Jimmy] Iovine and [Dr.] Dre who have proven track records in this area spanning decades.”
And what becomes of Muve? The details around the ‘New Cricket’ are vague and potentially complicated, according to the first source, with tricky approvals and disclosures with the Federal Communications Commission (FCC) to start. In one scenario, Muve subscribers could simply be enticed to upgrade to Beats; in another, they would be ‘handed’ a Beats account with their migrated collections. “Either way, you can believe that AT&T gets their nice cut, way more than if Beats got [those subscribers] on their own,” the source continued. “But don’t forget that Beats has some leverage here as well.”
More as it develops.