Apple to bundle Beats subscription service as part of iOS update next year

20 Nov 2014

Apple plans to bundle the Beats music subscription service into iOS as part of an update to the operating system as early as March next year, it has emerged.

That means the music service will automatically appear on hundreds of millions of iPad and iPhone devices.

Apple bought headphone maker and streaming platform Beats from Dr Dre and Jimmy Iovine for US$3bn in May of this year. The deal consisted of an initial purchase price of US$2.6bn plus a further US$400m that will vest over time.

The move makes sense, as the ability to install apps automatically on iOS devices will add to mounting pressure on the dominant player in streaming, Spotify, which is reeling from singer-songwriter Taylor Swift’s decision to remove her entire back catalogue from the service.

While Apple’s iTunes may be the dominant player in music downloads, the entire download market is in decline compared to streaming, which is on the ascent.

According to The Financial Times it will still be a steep climb for Apple because Beats only has 110,000 subscribers compared with Spotify, which has 10m subscribers.

Apple’s iTunes platform has 200m customers.

Spotify’s payout to artists

In a war of words with Swift, Spotify claims to have paid artists some US$2bn as a result of people streaming their music on the platform.

The company, headed by Daniel Ek, has also been establishing vital alliances with telecoms operators, including Sprint and Vodafone.

The timing of the Beats streaming inclusion as part of an update to iOS in March could time perfectly with the arrival of Apple’s new smartwatch, the Apple Watch, which is also expected to debut in March.

The timing of Apple’s increased focus on streaming also chimes in with internet search giant Google’s focus on streaming music via video-sharing site YouTube.

In recent days, smartphone and tablet users will have noticed that the main YouTube app has updated to include Music Key, a new ad-free streaming service that provides music for US$7.99 per month.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years