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iPhone Authors: Mat Rider, An Bui, Shelly Palmer, RealWire News Distribution, Michael Bushong

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Report: Apple Bought Beats to Save iTunes, the Record Industry

Apple and Beats

Why would Apple buy Beats when it could just evolve iTunes into a streaming music service? Well, it wants the talent of Jimmy Iovine and Dr. Dre. But according to a source with direct knowledge of iTunes’ executive strategy, by buying and operating an external streaming service like Beats, Apple can coin off a smooth transition without cratering the record business. The record labels and artists depend on the approximately $1 billion iTunes earns them selling downloads each year which could be disrupted if the 800-million account store shifted to subscription streaming. In short, turning iTunes into a streaming-only service is frightening to an industry fast losing cash to streaming upstarts and — by maintaining iTunes as an album/a la carte music sales service while running Beats as a sideline — the company can have it both ways.

Read the full story at TechCrunch.

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More Stories By Shelly Palmer

Shelly Palmer is the host of NBC Universal’s Live Digital with Shelly Palmer, a weekly half-hour television show about living and working in a digital world. He is Fox 5′s (WNYW-TV New York) Tech Expert and the host of United Stations Radio Network’s, MediaBytes, a daily syndicated radio report that features insightful commentary and a unique insiders take on the biggest stories in technology, media, and entertainment.