Report: Apple, Beats in talks to partner on streaming music service
Apple (NASDAQ:AAPL) has met with audio technology firm Beats Electronics to explore a potential partnership involving Beats' forthcoming Daisy music streaming service, Reuters reports.
Three sources familiar with the situation said that Apple CEO Tim Cook and Senior Vice President of Internet Software and Services Eddy Cue met with Beats CEO and co-founder Jimmy Iovine in late February to learn more about Daisy, a standalone digital music company set to launch in late 2013. Insiders stated that Cook expressed interest in details of Daisy's business model and its rollout plans; Cook and Iovine, who also serves as chairman of record label Interscope-Geffen-A&M, additionally discussed a broad range of music-related subjects, but the two executives did not address specifics of a deal.
Both Apple and Beats declined to comment, Reuters notes.
Apple smartphone rival HTC owns 25.1 percent of Beats, best known for its signature headphones. The firm has so far revealed few details on the Daisy service, which it announced earlier this year. Beats acquired digital music service MOG in mid-2012; MOG offers free and premium streaming access across the mobile and desktop platforms. On Tuesday, Beats said it has secured $60 million in funding for Daisy from investors including Warner Music owner Len Blavatnik.
Rumors of Apple's impending entrance into the streaming music segment have swirled for months. The Wall Street Journal and The New York Times first reported on an Apple streaming radio service last fall, stating the computing giant is mulling a multi-platform effort that would program content based on users' favorite artists, songs and genres. Sources have said the service would likely take the form of a preinstalled application integrated into Apple devices like the iPhone and iPad.
Soon after, Bloomberg reported Apple was deep in talks with record label partners ahead of a proposed first-quarter 2013 launch. Insiders stated the labels demanded an upfront licensing fee as well as a percentage of ad revenues and tools for integrating commercials spotlighting their recording artists. Sources also said Apple views the streaming initiative as a way to grow its iAd mobile advertising platform and is looking to integrate the service with its iTunes digital music storefront to fuel download sales.
Apple has not commented on the rumors, but many analysts feel streaming radio services fit seamlessly into its portfolio. "Radio is a natural step for Apple," BTIG Analyst Rich Greenfield told Bloomberg last year. "This helps Apple dominate in cars, where people listen to an average of two hours of radio a day… If Apple offers a radio product, it will be far superior to anything else on the market."
- read this Reuters article
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