Apple’s $3bn acquisition of Beats has cleared regulatory hurdles and is now complete. Last week the European Commission waved through the deal, stating that there were no “competition concerns because the combined market share of Apple and Beats Electronics is low”. US antitrust authorities followed suit late on Friday. Not that anyone seriously doubted the deal would go through uninterrupted but it now means Beats’ full integration into Apple can happen.
It’s not just Dr Dre and Jimmy Iovine who have cashed in as part of the Apple acquisition now it has been fully rubberstamped. Vivendi, parent company of Universal Music Group, gets a $404m windfall for its 13% stake in Beats. Bloomberg reports that Vivendi has generated $30bn in asset sales in the past two years as part of a strategic review to focus on its media assets – but it still retains a stake in Deezer as well as (via UMG) Spotify.
What the confirmation of the acquisition will mean is some job losses. There were suggestions that 200 of Beats’ 700-strong workforce could be axed but there is no confirmation on that yet. Ian Rogers is, however, expected to remain as head of the Beats Music subscription service as well as take on additional responsibilities for iTunes Radio, Apple’s Pandora-style service that is currently only live in the US and Australia.
How these two streaming services – one a full subscription offering and the other ad-supported (unless users sign up to iTunes Match) – integrate will be interesting to watch, especially as Beats Music has (beyond limited trials) no free tier, something many regard as being the key upsell component that pushed Spotify to 10m subscribers globally. Could this also mean that iTunes Radio will settle into a division distinct from iTunes itself and become a customer acquisition funnel for Beats? And, if so, what could that all mean for music sales on iTunes given that downloads in the US, its biggest market, started to decline last year and apps are proving the bigger goldmine for Apple? A fascinating few months lie ahead.
Tools: platforms to help you reach new audiences
Tools: Kaiber
In the year or so since its launch, AI startup Kaiber has been making waves,…