Streams by Dre: Beats Music Launches, But Don't Expect Many Free Tunes

What's This?

Producer and musician Dr. Dre and Interscope and Geffen Records chairman Jimmy Iovine on the field before the Boston Red Sox take on the the New York Yankees on April 4, 2010.

Image: Elsa/Getty Images Sport

By Jason Abbruzzese2014-01-21 15:27:20 UTC

Beats by Dre kickstarted the high-end headphone market. Now, Beats Music is hoping to do the same to the online streaming industry.

Beats Music launched for iOS and web users on Tuesday morning, entering an already crowded and competitive market. The service combines features from a variety of existing services: Spotify's download capability and deep catalogue, Songza's mood-influenced playlist generator and Pandora's algorithm-based music exploration.

See also: 8 Top Apps and Services for Streaming Your Favorite Movies

However, Beats Music differs in one dramatic way: It's not a freemium model. As opposed to other streaming music sites that are either free or have a no-cost option with limited features, Beats offers only a seven-day free preview (no credit card required) before listeners must pay $9.99 per month.

The service is also set to launch exclusively on AT&T with a family plan at $14.99 per month, which will allow five family members access on 10 different devices. An individual plan will cost $9.99 for one person with access on three devices. Target will exclusively carry Beats Music prepaid cards.

Beats Music will attempt to differentiate itself with a personalized and curated music selection based on notable musicians and powerful technology.

"It takes a highly curated, uninterrupted sequence of songs to achieve a fulfilling music experience, where the only song as important as the song you are listening to is the song that comes next," said Jimmy Iovine, Interscope Geffen A&M chairman and cofounder and CEO of Beats Electronics, in a press release.

Nine Inch Nails frontman Trent Reznor sits as the company's chief creative officer, while former Pitchfork Media editor in chief Scott Plagenhoef sits on its curation team.

In addition to the human element, Beats Music will also make use of MOG, its music service acquisition, and technology that has been rumored to include a specialized algorithm.

"With this, you get not just the music experience only a talented DJ or music expert can deliver, but also the right one for you right now," said Ian Rogers, the CEO of Beats Music.

It will be difficult to step into a market that is already crowded and full of competitors, some of which have deeper catalogues and more free access. But Beats Music has a crucial element that offers a distinct advantage: robust income and a popular brand profile from its headphones.

Beats almost single-handedly brought the sleepy high-end headphone market to the forefront. Founded in 2008, the company had a 64% share of the market for headphones costing $100 or more by 2012. That market as a whole grew 73% year-over-year in 2012, a market placement that meshes with the choice to offer little free music.

In addition to an established brand, Beats headphones also provide a healthy revenue stream that will take pressure off the music service.

Beats headphones brought in $1 billion in 2012, according to a report from The Wall Street Journal. Beats does not reveal profit numbers, but received a $500 million investment last year for a minority stake. By comparison, Spotify brought in $577 million in the same year, while posting around at $78 million loss.

That is the kind of backstop that is valuable for a start-up entering a competitive market, particularly for a streamer that is looking to establish itself as a premium service among freemium models.

Have something to add to this story? Share it in the comments.

Topics: beats by dre, Business, Media, Music, online music, streaming music