To Beat Or Not To Beat

An online report TechCrunch cited anonymous sources in a Sept. 22 report claiming Apple would “shut down” Beats’ streaming service, Beats Music.

In a rare public statement, Apple spokesman Tom Neumayr flatly denied it. Apple’s plan for the Beats brand is unclear, and waters were further muddied when the company started delivering its new iPhone 6 Sept. 19, sans a pre-loaded Beats Music app, according to the New York Times.

Despite Apple’s denial, Wall Street and industry analysts have suggested the name would eventually be retired and the streaming music service would be folded into iTunes, with the Beats brand surviving only for the signature headphones and other audio products.

Keeping things simple by incorporating Beats into Apple’s ecosystem as a single consumer brand under the iTunes music umbrella would be in keeping with past marketing philosophy. And Beats Music, introduced in January, has been reported to have barely made a ripple in a sea of streaming options. Apple hasn’t released subscriber numbers, but the Times says it’s estimated to have about 250,000 subscribers.

Subscription leader Spotify has 10 million paying subscribers and another 30 million users of its free, add-supported version.

Subscription streaming services account for just more than $1 billion of the $15 billion global music business but is growing fast while download sales, dominated by iTunes, is declining just as quickly, according to the paper.

The idea that Apple may reconsider plans for Beats seemed welcome in some circles. Financial analyst Toni Sacconaghi told the Times that it would make sense for Apple to continue to sell Beats headphones while discontinuing Beats Music, which could short circuit Apple’s music brand identity with consumers.

“People aren’t just buying the headsets because they’re great quality,” Sacconaghi told the paper. “They’re buying Beats headsets because Beats is cool.”