Showbiz Sandbox 235: When Apple Can’t Beats Them, It Buys Them
May 12, 2014
As rumors began to circulate that Apple was purchasing Beats Electronics for $3.2 billion everyone from music industry executives to stock market analysts all asked the same simple question – why? The lucrative deal makes perfect sense from Beats perspective, but what does Apple see in the high-end headphone manufacturer that made them spend so much money to acquire the company.
Speculation has centered on two possible reasons, both of which are probably accurate. The first hypothesis is that since Apple already heavily promotes Beats products through their retail stores, they may as well make them a part of the family and keep all the profits. The second theory is that Apple is hoping Beats streaming subscription service can help them with their own streaming music offerings.
With digital music sales first plateauing and now declining, Apple may be predicting that more consumers are wanting to stream their music rather than purchase it. We discuss Apple’s big purchase and provide in-depth analysis on what it means for the company and the state of the music business.
Of course, we also cover the week’s top entertainment news stories including the renewal of “American Idol” for a 14th season, NBC pays billions for the rights to broadcast the Olympics over the next 20 years and Comedy Central finds a replacement for Stephen Colbert.
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