Apple recently announced its purchase of Beats Electronics, for a reported US$3 billion. Beats Electronics was started by Dr Dre and Jimmy Iovine, and includes the signature headphones range and Beats Music, an online streaming service. With music streaming services gaining popularity, arguably it was only a matter of time before Apple made a move into that territory to take on the likes of Spotify, MOG and Rdio. Streaming technology is not new, I’m sure many of us remember Realplayer, but contemporary services such as Spotify, Rdio and MOG are the latest significant intervention in music consumption. Fuelled by faster and mobilised internet connections, streaming services are the heavenly jukebox for computers and post-PC devices like smartphones and tablets. Naturally, streaming services are not without their controversies. Spotify continues to be on the receiving end of critical blows concerning royalty payments to artists, which has led some notable high profile acts such as Radiohead’s Thom Yorke to pull music from the service. And Twitter controversially bought and shut down Australian streaming music service We Are Hunted. Just as iTunes is not alone in the pay-for-download market, Spotify is not the only streaming service. At first blush, Beats Music, which only started in 2012, is yet another streaming service and has much in common with its brethren. Where it appears to really stand out from the crowd is in its curatorial capacity: like similar services, Beats has deals with all the major labels and streams the majority of their portfolios, but it employs a sophisticated personalisation system that mixes algorithmic and human choices. As Trent Reznor puts it, it’s: like having your own guy when you go into the record store, who knows what you like but can also point you down some paths you wouldn’t necessarily have encountered. Beats aims to respond to your tastes more accurately than its competitors. When you have more than 20 million songs at your fingertips, discovery and recommendation systems become increasingly important. Apple CEO Tim Cook is invested in Beats because he believes it’s “the first subscription service that really got it right”, evangelising “how important human curation is”. The deal represents Apple’s first foray into the market for streaming music. (iTunes Radio doesn’t count as it’s not on-demand), and it’s unusual for Apple to make such a large, not to mention high profile purchase. Historically, the tech company has preferred to absorb smaller companies and integrate their products into its brand. Why now, why Beats? Although Spotify has yet to turn a profit, on-demand streaming services are touted as the future of music consumption. Given the steady increase in Spotify’s consumer base, this is plausible especially with younger audiences seeking legal music services but constrained by limited disposal income. There will, of course, always be those who prefer to own music, just as there are still those who swear vinyl is the only way to listen to music. Story continues on page 2. Please click below. Music consumption models, however, are far from consistent across the globe; for example, 91% of Sweden’s digital music income is derived from streaming, while German and Canadian consumers prefer to download their music. The differences between individual nations aside, the popularity of streaming is rising and in order to maintain its position Apple had to venture into the streaming market to keep the record labels on side if nothing else. According to The Wall Street Journal, “one major record company makes more per year, on average, from paying customers of streaming services like Spotify or Rdio than it does from the average customer who buys downloads, CDs or both”. That is not to say that Apple would simply buy up any old streaming service, there has to be a reason that it selected Beats over Rdio or Spotify. Bringing the experts back It was Apple - a technology company - that came to the aid of the recording industry as it struggled with 21st century consumer behaviours. In a 2007 interview, Doug Morris, then-CEO of Universal Music responded to queries as to why the recording industry was so behind the eight-ball: There’s no one in the record industry that’s a technologist … That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do. Since then, technologists have led the recording industry’s new distribution platforms. Rdio and Spotify were both founded by technologists and entrepreneurs. Perhaps the tables have turned and the new platforms required a (re-)intervention of music industry professionals? The credentials of Beats Electronics founders Jimmy Iovine bring together technology and music expertise. As part of the deal, both Dre and Iovine are taking senior positions within Apple. Iovine had reportedly been trying to push subscription-based models to Steve Jobs as early as 2003 and while a move towards streaming did not happen in Jobs’ lifetime, Apple has now jumped in with both feet. So what does this mean for the future of music distribution? Apple, Dre and Iovine have declined to share any details as to the future of their collaboration so any thoughts are purely speculative at this stage. It is, however, worth noting that to date iTunes has offered a number of exclusive releases, and Apple has begun exerting pressure on record labels to sign exclusive distribution deals. For example, Coldplay’s latest album Ghost Stories is exclusive to iTunes (pirated versions are of course available via the usual suspects) and the band declined to add its latest offering to Spotify’s catalogue. Combined with the Beats streaming service as well as Apple’s own hardware, it is likely Apple will attempt to block out its competitors and (further) lock in consumers. At present, Beats Music is only available in the USA, but Australia will be the second country to have access to the service courtesy of Beats’ acquisition of MOG. The digital music ecology is evolving at an advanced pace and accurate predictions are difficult to make. One thing, however is sure, as the physics of the media space change, we shouldn’t expect the winners to remain constant. Steve Collins is a senior lecturer in multimedia at Macquarie University. This story was originally published at The Conversation. Read the original article.
Apple has suggested users should change their Apple ID password after a number of Australian users reported finding their iCloud-connected devices locked with a message asking for money. According to ZDNet, Apple said that iCloud had not been compromised. “Impacted users should change their Apple ID password as soon as possible and avoid using the same username and password for multiple services,’’ the statement said. Intel jumping on wearables The chip maker has unveiled a new push into wearables and robotics. Intel CEO Brian Krzanich appeared at the Code Conference in California wearing a ‘smart’ shirt featuring sensors that measure heart rate and other vital signs aimed at joggers and cyclists. He also showed off Jimmy, a white robot designed to walk, talk and dance. Krzanich says the company is focusing on these new trends because it felt they missed an opportunity with the rise of tablet computers. Apple announces Beats Music Acquisition The company will purchase Beats Music and Beats Electronics for approximately $2.6 billion and $400 million that will vest over time. Beats co-founders Dr Dre and Jimmy Iovine will join Apple. Overnight The Dow Jones Industrial Average is down 42.32 to 16,633.18. The Australian dollar is trading at US92 cents.
As first announced by the Financial Times it seems almost certain that Apple will buy premium headphone and audio company Beats for $3.2 billion. Apple was expected to announce the news next week but have been pre-empted by an indiscrete Dr Dre, the rapper, hip hop producer and founder of Beats, who confirmed the deal in public. $3.2 billion is a premium for a company that was valued at around a $1 billion in 2013 after HTC sold a 25% holding in Beats for $265 million. The general media commentary on the deal has surrounded the question of what Apple would want a company like Beats for. Opinions have ranged from the reflected “cool” of having the brand which is very popular to benefiting from the acquisition of Beats’ music streaming service “Beats Music” that was launched earlier this year. What is likely is that Apple will take advantage of the sum of benefits from the purchase. Five of the major benefits that Apple will be getting are the following: 1. The premium headphone market The premium headphone market is currently worth about a $1 billion a year. Beats by Dr Dre headsets are currently a very popular item for sale in Apple’s own stores and so by buying the company, Apple can profit directly from the sale of the headphones and portable speaker on a worldwide basis. What would be interesting is if Apple buys any other companies that have products selling well through its stores. 2. Audio technology Apple gains the design and manufacturing experience that Beats brings to the audio market. Other than headsets, the audio is used in computers and other devices. Although Apple computers have good quality speakers, the audio on Macs has always been limited with no system level equalizer for example. Apple can immediately improve the quality of the headsets it ships with its phones and tablets and the audio in its laptop computers. 3. Music streaming service Beats Music has received good reviews and so Apple will be able to roll its service into improving its own music streaming service iTunes Radio. This will have assumed more importance with the accelerating shift in the music market from digital downloads to streaming. 4. Boosting Apple’s cool The Beats brand has achieved a level of popularity through its association with rap founder Dr Dre and other music stars that the company has used to promote its products. There is no denying that Apple’s brand as the icon of cool has been tarnished through its own success and it evolutionary approach to product development it has adopted over the past 4 years. The Beats by Dr Dre brand and products will definitely help in reestablishing some of that lost image within a certain demographic. Whether that demographic is really core to Apple’s market is another matter altogether. 5. Wearables It is remotely possible that Apple is thinking about the possibility of smart headphones. Given that the use of voice is becoming much more functional as a way of interacting with a computing device, it is again possible that headphones could become independent devices. Although having headphones that could stream music independently of a phone would be a useful product in its own right, smart headphones could theoretically do so much more, rivalling most of the functionality of technologies like Google Glass. The sums of money being paid for recent tech company acquisitions have made multi-billion dollar deals the new normal. Because of this, it is not really necessary to look for too much significance in these purchases. Whilst Apple buying Beats make sense from a number of perspectives, it is just a tiny part of its overall product strategy and is not going to distract those waiting for Apple to do the next big thing. David Glance is the director of innovation at the Faculty of Arts and the director of Centre for Software Practice at University of Western Australia. This article was originally published at The Conversation. Read the original article
Mozilla is going ahead with plans to add sponsored tiles on its popular browser Firefox’s new-tab page. In a blog post outlining the details, Mozilla’s vice president of Firefox, Johnathan Nightingale says the company will begin experimenting with the concept in the coming weeks. “These tests are purely to understand what our users find helpful and what our users ignore or disable – these tests are not about revenue and none will be collected,” he says. “Sponsorship would be the next stage once we are confident that we can deliver user value.” Samsung Group chairman hospitalised Samsung Group chairman Lee Kun-hee, 72, showed symptoms of cardiac arrest after being sent to a hospital yesterday near his home, the Wall Street Journal reported. Lee is currently in a stable condition and recovering but it is unknown how long he is expected to be hospitalised. Apple buys Dr Dre’s Beats Headphone maker Beats Audio, founded by recording artist Dr Dre, is reportedly in the process of being purchased by Apple. Apple’s $3.2 billion purchase package is likely to include Beats Music, an online music streaming service that launched as a competitor to Spotify earlier this year. Overnight The Dow Jones Industrial Average is up 32.37 to 16,583.34. The Australian Dollar is currently trading at US93 cents.
Since Old Taskmaster was knee-high to a grasshopper, the clowns in Canberra have been stifling small business owners with red tape and regulation. While many business regulations are created with multinationals like BHP Billiton and Wesfarmers in mind, the same compliance hoops and taxes are also forced onto sole traders, small businesses and start-ups with far fewer resources. Unfortunately, despite the fact small businesses are the backbone of the Australian economy, the message just doesn’t seem to be getting through. Until now, that is. Thanks to Council of Small Business of Australia executive director Peter Strong – with a little help from YouTube – that message is now going viral. In fact, earlier this morning, the clip was doing the rounds here at Taskmaster Towers. Strong recorded a rap music video on behalf of small business owners and entrepreneurs across the nation, telling Kevin Rudd to start keeping it real on red tape. It’s a battle rap against bureaucracy. While it probably won’t force the likes of Snoop Dogg, Dr Dre or Kanye West to update their CVs just yet, the clip turned out better than you might imagine. If it hasn’t shown up in your email or on your Twitter feed yet, here’s the video everyone’s talking about: Now, you might think it’s a little silly. But it’s novelty value that causes videos to go viral on social media sites, including YouTube. So Old Taskmaster says it’s time to take a leaf out of Peter Strong’s book. If you use YouTube as one of your social media channels, don’t just upload a boring old ad. Instead, create a video with some novelty value to it and have some fun with it! Get it done – and bust a funky lyric!
James Packer has reportedly joined a group of wealthy investors in making a $60 million injection into a streaming music business owned by rap icon Dr Dre, the entrepreneur behind the successful Beats Electronics brand.
While, in Australia, businesses are creating headlines for blaming price increases on the carbon tax, their counterparts in the UK are having to run a different kind of gauntlet.