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New Music Industry Data Suggests Beats Music May Be Apple’s Lifesaver

Wall St. Cheat Sheet

First published on http://wallstcheatsheet.com/

In a move that initially baffled many industry analysts, Apple (NASDAQ:AAPL) announced in May that it was acquiring Beats Electronics for $3 billion. While Beats Electronics is primarily known as a maker of premium headphones, the deal also included Beats Music, a subscription streaming music service that made its debut in early 2014. Although the price of the acquisition was relatively low considering Apple’s $150 billion-plus cash pile, many analysts struggled to see the rationale behind the deal, especially since the iPhone maker already has a well-established brand of music services under its iTunes banner.

However, new music consumption data from Nielsen appears to offer more proof that Apple’s acquisition of Beats Music was a prescient move to stay ahead of the curve in the music industry, rather than a shortsighted “cool” brand purchase. According to the Nielsen Entertainment & Billboard’s 2014 Mid-Year Music Industry Report provided by TechCrunch, sales of digital albums declined by 11.6 percent in the first six months of 2014 compared to the same time period last year. Digital track sales saw a similar 13 percent decline during the first half of 2014 as well.

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