Apple today confirmed its long-rumored acquisition of Beats Music and Beats Electronics for a total of $3 billion, according to a Beats press release.
It’s a three-pronged acquisition including the acqui-hire of Beats co-founders Dr. Dre and Jimmy Iovine; Beats subscription streaming service; and the Beats hardware.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Apple’s Tim Cook in the Beats Press Release. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”
“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
Beats Music is a subscription streaming service that generates customized playlists based on a user’s musical tastes — similar to Pandora’s Music Genome Project, as well as other recommendation platforms.
Beats Photo by Flickr user briansolis / In-column photo from Twitter.com/tim_cook
All media must evolve to stay relevant in our lives. We’re seeing it now on four levels: news, communication, commerce and entertainment.
The way we get our news is changing, from print to web and apps. We communicate and interact daily on Facebook and text messages. We shop online more than ever before. We’re entertained not by video-rental stores but by Netflix and Hulu. The radio dial we used to turn is now a digital dial.
Shifts in consumer behavior force media to evolve. Today that shift is toward personalization.
Pandora, the leading Internet radio service, is the evolution of FM radio. Its customized radio plays songs it knows we’ll like – it learns our tastes – using Pandora’s Music Genome Project.
Editor’s Note: This article first appeared on StateCollege.com in Tech Talk, a biweekly column by Eric Zimmett. Click here to view the original column.
Pandora announced Tuesday at the International CTIA Wireless 2012 conference in New Orleans that it has surpassed 150 million registered users, nearly 52 million of which are active listeners. It is now one of the most-used online services in the United States.
In April, Pandora users clocked 1.06 billion listening hours, an 87 percent increase over the same time last year.
Audience measurement and consumer research company The Media Audit revealed last week that Pandora is the No. 1 listened to station in Los Angeles, beating out KIIS-FM.
The Media Audit found that Internet radio has reached 20 percent saturation; which means there’s still plenty of room to grow. Among 18 to 34 year olds, the saturation – or market presence – hits 36.6 percent.
Ways to Tune In: some of today’s popular destinations for music
- Pandora: Personalized Internet radio service that creates stations based on your favorite artists and songs. Pandora offers free and premium Pandora One, which features ad-free listening for about $3 per month.
- Sirius XM: Subscription satellite radio service starting at $14.49 per month featuring more than 140 channels including 71 commercial-free music channels plus news, talk, sports and more. You’ll need a Sirius or XM radio to use the service, unless you opt for an online-only subscription for about $13 per month. Sirius XM is also available in select vehicle models.
- Spotify: On-demand music. Enter an artist and play the tracks you want to hear. Spotify also features genre-specific stations and the new Playlist Radio. Free on desktop or laptop computers – but to play on mobile devices or tablets Spotify Premium ($9.99 per month) is required.
- Slacker: Slacker plays songs based on your favorite artists or tracks, in addition to genre-specific stations. Slacker has a free level and two premium options: Slacker Plus ($3.99 per month) and Slacker Premium ($9.99 per month), with Slacker Premium featuring on-demand music like Spotify.
- Songza: Songza sets itself apart with its Music Concierge featuring situation-based music, from Waking Up, to Unwinding After a Long Day, or even A Sweaty Dance Party.
- Others: Grooveshark, Rdio, MOG, Rhapsody
According to the annual Infinite Dial study released last month by Arbitron and Edison Research, weekly Internet radio listening jumped more than 30 percent in the past year. The study includes streaming AM and FM stations.
Pandora listeners hit 22 percent of people 12 years and older who’ve listened in the past month, up from 16 percent last year, according to the same study.
New car tech is catching up, too. Including “Infotainment” systems that connect to Internet radio services like Pandora and satellite radio service Sirius XM. Pandora is available in 48 vehicle models across 18 brands and an array of aftermarket multimedia systems.
Cars with built-in iPod sync and audio jacks enable a driver to either wirelessly sync a device or plug it in, playing the audio through the car’s stereo system.
More than 70 percent of Pandora’s listening hours were from a device other than the computer, the company announced Tuesday. This correlates with the growing number of mobile devices and users accessing the Internet – and Internet radio – away from the computer.
In the past two years, smartphone ownership has tripled. The percentage of people who’ve listened to Internet radio by connecting a mobile device to the car stereo has experienced a 50 percent increase in the past 12 months, reaching 17 percent, according to Arbitron and Edison Research.
More than half of users between 18 and 24 years old have listened to an iPod or mp3 player in the car as their main source of music. One in five is streaming Pandora, according to a separate study by Arbitron and Edison Research.
In-car listening is the biggest area of potential growth for Internet radio services. In the next five years, Internet radio will gain more ground in the car. It’s only a matter of time before the technology hits the streets and moves along the adoption curve.
Turning the dial
Like television and newspapers, radio is evolving by adapting to shifts in the way we live – and listen.
The consumer’s desire for personalized media is driving the shift. We’re responsible for the changes that are occurring. It’s happening because we asked for it. Companies like Pandora and Spotify exist because they noticed it before the others, maybe even before we noticed it.
Consumers told them what they wanted; and they were listening. They responded with services that are transforming the radio landscape.
“Mobile connectivity has allowed us to deliver on our mission of providing people with music they love…” said Pandora President and Chief Executive Officer Joe Kennedy.
“The continued growth of Pandora shows that personalized radio is fundamentally changing the way people listen to music.”
Introducing FIVE TECH PREDICTION FOR 2012.
5. Content producers skipping the middle man
Zimedium called it on May 8, 2011. In a post titled My predictions for Internet TV and the future of Cable.
“I’d watch for more studios and content owners to explore options for skipping the middle man and becoming the means of distribution for their content.” (See story May 8, 2011)
Louis CK did it seven months later — this December — for his special Live at the Beacon Theatre. Instead of distributing the video through Netflix or HBO, Louis CK put it exclusively on his website. All fans had to do was visit his site, pay the $5 price and download the special. So how’d it turn out? Well, in 12 days, Lois CK’s DRM-free video download made a cool $1 million. And it’s still going…
Louis CK’s special is only the beginning. In 2012, more will follow his model. Entertainers, content providers, even premium cable channels.
4. Customized Ads… Tailored to your purchases, browsing habits, check-ins and interests
Ads customized to your interests. Google does it best. Hulu’s already doing it with in-show ads and its Ad Swap feature. You can select what you like instead of watching what Hulu thinks you’ll like. Facebook does it. Facebook displays ads based on what fan pages you like. Foursquare does it too, by offering suggestions based on where you check in. Foursquare co-founder Dennis Crowley discussed the company’s Explore/Recommendation engine at LeWeb 2011 in early December 2011.
“We went through about two years of Foursquare where people thought that they were checking in for mayorships and points and badges. The check-ins weren’t just for the badges,” Foursquare co-founder Dennis Crowley said on stage at LeWeb 2011. Every time you tell us that you like to go to this sushi place, we get better about recommending you another place to go to. Every time you tell us that…you know a lot about this area of Paris or this are of New York, we know that you’re really familiar with that neighborhood. And we can suggest other things that you may not know about. Or we know when you’re in areas that you’re not so familiar about we can start offering things that help you out.”
Ads based on what you “like,” tweet, check-in, watch. Information you provide both voluntarily and data acquired based on your actions. Get ready to not hate the ads that interrupt your programming…at least not quite as much.
In 2012, Customized Advertising will be king. Whether you’re aware of it or not.
3. Video-game consoles becoming complete entertainment hubs
We called it an entire year ago, on Dec. 27, 2010. In a post titled When will PS3, Xbox, Wii incorporate Internet TV.
“…When will Sony, Microsoft and Nintendo enter the [streaming content] game themselves? Doing so would offer another bit of differentiation, another perk for owners of each console.
“Who will be the first to fully embrace streaming content or Internet apps?
“Because it’s going to happen, and whichever is the first to act will only begin the next trend in video games and possibly home entertainment as we know it.” (See story Dec. 27, 2010)
Xbox 360 introduced its revamped dashboard one year later, in early December of 2011. The new dashboard featured Internet apps including Netflix, Epix, SyFy, ESPN, Daily Motion, NBC News, Zune, YouTube and Live TV integration if you have the accompanying cable subscription.
In 2012, Xbox will roll out more apps and the rest will follow. It’s only the beginning. The future video-game console will be a complete media hub with dozens, possibly hundreds of channels and apps.
2. Entertainment on the Cloud
I hate the term “cloud storage.” Makes me think the cloud is only for backing up files. In 2012, the Cloud will become more than a backup service. Cloud for movies…music…pictures… and our movie libraries.
(I’m looking at my collection of DVDs and Blu-rays right now.) In 2012, our movie collection will extend to the cloud. Blu-rays already come with digital copies. How about a specially formatted “cloud copy”?
1. A BIG Netflix competitor
Through a few missteps in 2011, Netflix has enjoyed practically zero competition (or at least serious competition). Its maintained the largest number of video subscribers anywhere and built up its library of streaming content. Plus exclusive content on the way.
Zimedia predicts in 2012, one new company (or a service from a partnership of companies) will emerge as the biggest competitor Netflix has seen to date.
But it won’t be the death of Netlfix. In fact, few industries survive without competition. It’s good for business. It fosters growth, sometimes re-invention, and an improved user experience.