Dr. Dre and Jimmy Iovine, two of the leading minds of the music business, are preparing to launch Beats Music, a subscription streaming music service that will challenge the likes of Spotify, Pandora and Apple iTunes Radio, according to the New York Times.
That means the online music business just got an injection of some serious competition, as it comes off the success of Beats by Dr. Dre headphones.
Trent Reznor of Nine Inch Nails will serve as chief creative officer. The goal of the service is to help fans decide what music they want to listen to. The service will start in the U.S. on Jan. 21, and it comes at a time when download sales are starting to decline. Streaming has become the top way for consumers to listen to music, leading to growth at free outlets such as YouTube and Pandora, which are supported by ads.
Paid subscriptions, by contrast, have declined in popularity. But in the market, Beats Music will face rivals such as Sony, Microsoft,and Google. Beats Music has $60 million in investment and it is an affiliate of Beats Electronics, the maker of the Beats by Dr. Dre headphones. It will offer subscriptions for $10 a month. The interface will be built mainly for mobile use. The service includes Right Now, an automated listening game.
The service will have no free tier. That will allow the company to offer higher royalty rates to artists. AT&T will offer Beats Music subscriptions with monthly smartphone service and promote the bundle heavily. Target will also promote the service in its stores, as will Ellen DeGeneres on her talk show. Those deals are meant to promote Beats Music to mainstream audiences.