Beats Music, which will arrive in the United States on Jan. 21, is also making the latest salvation pitch for the struggling music industry. With download sales tapering off after a decade of growth, streaming has taken center stage as the most promising new source of revenue. Yet while consumers have flocked to free outlets like YouTube and Pandora, the more lucrative paid services have been slow to catch on, and the low royalty rates paid by these services have stirred resentment among musicians.
Winning this battle won’t be easy. The digital music world is in the midst of a confusing convergence of formats, with downloads, radio and streaming being juggled and combined into whatever hybrid will stick. Beats is joining a market already crowded with competitors, including Google, Sony and Microsoft, with more to come.
So far Beats Music is available only in the United States. But Beats’ major target is Spotify, which was founded in Sweden in 2008 and is now in 55 markets around the world. Spotify has not announced user numbers in almost a year, but a top executive recently told a private music industry gathering in Los Angeles that it has nine million paying subscribers, including two million in the United States, according to a person who attended. Spotify declined to comment for this article.
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