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Apple buying Beats with streaming business the main prize

Apple buying Beats with streaming business the main prize
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Apple’s much anticipated purchase of headphone maker Beats is going ahead.

The iPhone maker is paying the relatively high price of $3 billion (2.2 billion euros).

For that it gets a line of “cool” headphones popular with young urbanites.

But in the industry the feeling is what it really wants is Beats’ five month-old music streaming service.

Beats co-founders – recording mogul Jimmy Iovine and rapper Dr. Dre – are considered to be key in Apple forging better relations with the music industry in the notoriously difficult licensing negotiations for streaming.

Apple has to address the fact that sales of its iTunes song downloads are declining as the popularity of music-streaming services soarsing.

Streaming subscriptions jumped 51 percent last year, downloads slipped 2.1 percent.

The likes of Pandora and Spotify have raced ahead while Apple’s eight-month-old iTunes Radio has not made much of a dent.

Record companies have also put pressure on Apple to get its act together on streaming.

Reportedly they are hoping that Apple can turn Beats Music into a strong competitor to Spotify and its rivals.

with Reuters