Apple may be streaming music's savior with reported Beats deal

Digital music has been tricky ever since Napster burst on the scene. Apple solved a large part of the problem with iTunes, but digital downloads have gone the way of the CD.

What people want is choice, discovery and on-demand streaming. iTunes radio hasn’t gained popularity. Other services have come and gone, typically crushed by legal trouble and royalty payments to the music industry.

If it’s true that Apple is buying Beats Electronics for more than $3 billion, as Patrick May and Dan Nakaso wrote about in the San Jose Mercury News, it could give the sector real legitimacy as a business.

The music industry hasn’t made it easy for startups and businesses that have waded into this territory.

Oh, sure, Pandora has a huge following – I’m a fan – but it has to go to Congress to fight over the rates it pays to the music industry.

Beats’ on-demand music subscription streaming service, which only launched this year, is far from a finished product.

I tried out Beats when the MOG streaming music service died in April, as I wrote about. Like a lot of ex-MOG users, I found Beats hard to navigate.  Beats currently focuses on its mobile app but a lot of people like me switch back and forth from desktop to mobile.

I switched to Spotify, which is fine for as long as it lasts. Unprofitable, it has raised $500 million and is expanding rapidly.

And how dead is digital downloading?

When my 11-year-old son recently campaigned for an iPod, we begged him to save up longer and get an iPod Touch so he could access Spotify through WiFi and have a huge library of music to explore. Your allowance is going to go up in smoke, we argued, if you are paying 99 cents per song. He eventually agreed.

What’s been needed, say industry observers, is a powerful advocate who can cut deals with the music industry so that streaming makes sense for everyone involved, digital music businesses, consumers and the industry.

What The Street’s Rocco Pendola sees in the potential deal is that Beats and Apple will combine forces and help unleash “the value of music for the benefit of everybody from record labels to musicians to songwriters to major brands.”  Pendola writes:

That’s where it’s at. In the data. And there’s so much more Apple can do with data with Beats. And there’s so much more Beats can do with data as part of Apple.

I’ll leave you with this thought. Who was it that brought The Beatles into digital music? Apple. Only Apple may be able to bring The Beatles to on-demand streaming. Because right now, they are not there.

Above: Dr. Dre, co-founder of Beats, pictured in 1999.  (AP Photo/Randi Lynn Beach)

Michelle Quinn Michelle Quinn (186 Posts)

Michelle Quinn is a Business Columnist at the San Jose Mercury News. Prior to her current role, she was the Silicon Valley correspondent at Politico covering tech policy and politics. She has also covered the tech industry at the Los Angeles Times and the San Francisco Chronicle. She was a blogger for the New York Times.