Why Radio and Music Should Take The iTunes/Beats Deal Seriously

The early press on both iTunes Radio and Beats Music, when each debuted within the last year, was harsh. Beats was considered naïve in expecting a substantial paying audience. Apple’s iTunes Radio was called out for not single-handedly halting the decline of paid downloads as the streaming model continued to grow.

And yet, Edison Research’s “The Infinite Dial 2014,” released when iTunes Radio was four months old and fielded as Beats Music debuted, had signs of encouragement for both.  Awareness of Beats was already 9%.  Meanwhile, iTunes Radio had been listened to by 8% of respondents in the previous month, making it third to Pandora and almost tied with iHeartRadio (9%).

The rumored deal in which Apple will buy Beats for $3.2-billion has been characterized in one report already as a sign of Apple’s desperation to stay relevant in a streaming world. Some broadcasters will try to minimize the story by positioning it as  the combination of two underwhelming entities. And some don’t see this as a streaming music play at all.

Whatever Apple’s intent, there are still significant implications here for broadcasters and labels. Besides giving Apple a subscription streaming music operation without building one from scratch, Beats Music and iTunes Radio very nicely fill in each other’s vulnerabilities, not just by putting iTunes on Android, but from a radio/audio programming standpoint.

iTunes Radio began with a huge built-in audience. It debuted with superstar partnerships (Katy Perry, whose “Dark Horse” became a dark horse hit at least partially because of its early exposure there) and major advertiser support. There was a creative array of pre-programmed radio formats. But from the company that propelled the word “experiential” into its current overuse, iTunes wasn’t anything unprecedented in online radio. And offering the “first play” of an entire album here-or-there only highlighted the relative ability to hear a first (or four-hundredth) play of anything at Spotify.

iTunes Radio also further camouflaged one of iTunes Music’s secret weapons – it was also an aggregator of 8,000 broadcast and online radio streams. That was a fraction of the 100,000 stations available through TuneIn, but listening on iTunes was a nicely manageable experience. It was an easy way to discover boutique pureplay stations and the easiest way to listen to certain broadcast stations, at least on the desktop. Those stations aren’t part of iTunes on the iPhone, and after iTunes Radio launched, they were relegated to a desktop tab that said only “internet.”

As for Beats Music, it correctly acknowledged the interest in Songza-style mood-based programming.  Beats’ calling card, “The Sentence,” was a nice hook, although many felt it didn’t deliver.  There were creative playlists via Beats much vaunted curators, as well as partnerships with big brands. The showmanship was good. What was notably absent was anything resembling radio, since co-founder Jimmy Iovine was unlikely to do anything to endanger the relationship between radio and his other business, Interscope Records. For now, Beats is not the new music concierge it could have been.

Both Beats Music and iTunes Radio certainly had the resources to make things difficult for broadcast radio, had they so chosen. Now, if the combined resources result in a more robust radio experience, any decision to go more directly after broadcast radio is under Apple’s flag.  In addition:

* The deal would give iTunes Radio’s pre-programmed stations an extra level of programming muscle;

It would give Julie Pilat, who joined Beats Music as one of radio’s few superstar music directors, the vehicle to program radio, not just oversee Beats’ variety of playlists.

It could give Beats Music a free tier, without appearing to have backed off its paid-subscription-only plan.

It would put two still-well-liked entities together. Think Disney plus “Star Wars.” Or Disney plus Marvel.

Beats curation plus the iTunes Music Store’s ability to actually sell you a song you discover is a potent combination. In its early days, Beats Music turned me on to more than a few songs that I wanted, but all I could do within their walls was, effectively, to bookmark that song.

The number of things that would have to happen here is a run-on sentence in the making. If Apple buys Beats Music, and if Apple combines iTunes Radio with Beats Music, and if Apple considers making its 8,000 radio stations available on the iPhone (and perhaps organizing them a little better), there is a potentially devastating combination here: library replacement (or enhancement), broadcast stations, specialty stations, music curation, mood service, big brands and celebrity star power.

Other services – iHeart Radio and Spotify particularly – also tick off multiple boxes. And at the moment, neither iTunes Radio nor Beats Music is firmly established as “best in show” for any of its franchises except for selling downloads. But the strengths of the various other services exist right now as separate silos, which a combination of iTunes Radio and Beats Music could replace with a shiny new mall.

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