Beats Music Could Become Bigger Than Spotify, Overnight…

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.

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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.”

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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.


26 Responses

  1. john

    muve music may have lots of subscribers but they certainly aren’t fuckin listening much. where spotify royalties are 1000 a month, muve royalties are maybe 10 a month.

    • tippysdemise

      John is correct. There’s no money in Muve. If a migration to Beats means we would see Spotify-like streaming numbers from Muve customers, then we have something.

      • TuneHunter

        Sorry, there is no money in current streaming arrangement!
        Streaming is perfect – free discovery equals to pure cash in the fireplace.
        Beats is just one more deadbeat consuming music industry GOODWILL.

    • Anon

      Muve Music pays the record labels based on a per user fee (Number of subscribers * fixed rate). The money that trickles down to the artists depends on both the label the artist belongs to as well as the amount of plays they had on Muve in a given month. Muve has more subscribers than Spotify, therefore more reportable revenue for royalty purposes. This can only mean that you have way more plays on Spotify than Muve. This may make sense though if your music is geared towards Spotify’s demographic, which is definitely a higher income bracket than the demographic Muve works with.

      • Me

        That’s exactly his point. Muve claims to have more subscribers, but those subscribers aren’t anywhere near as active as Spotify subscribers.

        • Anon

          I get that, but my point is that the revenue share pool for Muve will still be greater than that of Spotify. If Muve has less activity, that just means that the effective per play rate will be much greater for Muve. Even if Spotify has 1 billion plays per month and Muve only has 1 million, it doesn’t effect to the total revenue share to all labels. This just means that in order to collect as much revenue from Spotify as you would get from Muve, you need A LOT more plays on Spotify. One benefit of Spotify is that the service is available in many countries. From what I understand, Muve is only available in the US. That being said, if we’re talking US only, if your content has the same number of plays on both services, Muve should be earning your more money.

          • tippysdemise

            Anon makes a good point here. Checked the numbers and the issue is not the per-song streaming rate but the lack of volume.

          • Casey

            You are assuming Muve pays ~$7 per month (around the payout of Spotify Premium). The question is, do they? Because at 2 million subscribers, with or without a lot of plays it should be adding up to be the largest payout of any streaming service. But it doesn’t look like it is.

    • Me

      There is if you have something that somebody wants to listen to.

  2. Corey Tate -

    I think Beats Music is definitely the best streaming media service so far. I’m hoping that they get this right on all levels — number of users, payouts, listening experience.

    • Corey Tate -

      I have no idea, but given that it was started by music industry people rather than technology people is why I’m optimistic that they could do it better than the rest.

    • Corey Tate -

      Sorry, comment was meant to go here: “I have no idea, but given that it was started by music industry people rather than technology people is why I’m optimistic that they could do it better than the rest.”

  3. AKA

    Actually I use Muve Music, it’s awesome and it has super good music quality, it’s clear and rich also it’s been proven muve music has more listening too

    Pandora and spotify reported people listening to music 20hrs a week average while muve music reported people listening 30hrs a week average

  4. R.P.

    R.I.P. Beats Music. It died already. Where have you guys been? smh

  5. Willis

    Enough with all the hype. Time to get real, people. Beats is bollocks.

  6. David

    Just to mention a point that came to my attention in another comments thread. It is not very widely known that Spotify often uses a kind of P2P technology to deliver streams. When you try to stream a track, Spotify will search your own computer to see if it is already on your hard drive (including a cache of tracks you have previously streamed from Spotify), but it will also search other Spotify users’ computers to see if they have it, and if so it may transmit it from them to you, rather than streaming it from Spotify’s own servers. The ostensible justification for this is that it provides a quicker and more reliable service. But other streaming service don’t seem to do it (Rdio and RaRa certainly don’t, and they work pretty well), and presumably it saves Spotify some money by reducing the load on their servers, their bandwidth usage, and so on.

    I wouldn’t see any objection to this system if Spotify made it clear to users when they sign up, but I don’t think they do. A lot of people are surprised and annoyed when they find out about it, e.g. see the discussion here:

    From the user’s point of view there are possibly serious drawbacks. As pointed out in the discussion I just linked to, it can interfere with other uses of the computer or other devices in a network. Presumably for anyone who is not on an unlimited broadband contract it could also cost them money, e.g. if it pushes them over a monthly usage threshold. I am not even sure it is legal. As far as I can see, the only ‘cover’ for it in Spotify’s Terms of Service is this passage: “In consideration for the rights granted to you under these Terms, you grant us the right (a) to allow the Spotify Service to use the processor, bandwidth and storage hardware on your Device in order to facilitate the operation of the Service…” But this says nothing about giving other users access to your computer or vice versa – which could e.g. expose you to malware – , and nothing about the possible financial impact. At best it is badly explained, and at worst it is downright dishonest. And before someone tells me I don’t understand the internet, I note that people who are far more IT-savvy than me are equally surprised when they find out about it:

  7. Willis

    What a shell game. Fans are fickle and change services all the time. There is no reason to pump tons of money and effort into anything as the users will use until something else comes along (MySpace–>Facebook–>Twitter/Instagram–>??). Beats Music was over before it started. I give it less than a year…and I’m taking bets.

  8. Frank

    When my trial period ended a few days ago I couldn’t find a way to subscribe/submit payment using the app.

    Strange oversight.

    • ggggg

      apple has a rule where you can’t initiate payment via app. I agree they need to make it more clear that you have to pay online though.

      • TuneHunter

        It is one of many rules that will sink Apple.
        Same rule have helped Shazam, Gracenote and others to become free service to pirating public.
        Well, today is the day for my iPhone to become Galaxy S4 – I am happy!

    • Beats Music Help

      Hey Frank, you can subscribe at Hope that helps! -m

  9. annon

    Steaming music model like Pandora, and Beats still “kills” mobile phone data usage. People still tends to believe music should be FREE and Muve Music does that in customers’ eyes.