Apple to fold Beats Music into iTunes next year

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Following swirling rumors of a transition and/or shutdown of Apple’s newly acquired streaming service, Beats Music, the Wall Street Journal is reporting today that, yes, Beats Music as we know it will go away next year, folding into Apple’s floundering iTunes music platform. The news comes from an anonymous source familiar with the matter, according to the Journal.

The absorption of Beats Music into iTunes wouldn’t be a huge surprise, especially considering that Apple’s iconic service has again taken a hit this year, with sales down an approximate 13-14 percent since the beginning of 2014. The trend follows the rest of the music industry, as digital sales saw its first downward turn in 2013 since the iTunes era. The download drop has largely been blamed on the rise of streaming services, like Spotify, Pandora, and a host of others, which have seen an increased market share.

When Apple threw down $3 billion for Beats Electronics and all of its assets, including Beats Music, a large part of the motivation for Apple’s big buy was thought to be its desire to gain a stake in the burgeoning streaming industry. However, unlike its rivals Beats Music has seen very sluggish growth in subscribers since its late-in-the-game launch last January. And while Apple decided to keep the Beats logo prominently displayed on its wildly successful headphones and electronics, it appears there’s no place left for Beats Music — in name, anyway.

The drop in iTunes downloads follows a broader U.S. trend, according to the Journal’s report, as domestic downloads at large have already taken a 12 percent drop this year. While album sales overall have flattened out, despite a sizable uptick in vinyl sales thanks to the recent renaissance there, streaming is clearly taking a bite out of the digital downloading paradigm.

And while we don’t yet know what iTunes will look like once it absorbs Beats Music and all of its subscribers, Apple’s not stopping there. The company is reportedly using its market might to sit down with the mighty music labels in an attempt to lower the price for music subscriptions from the current $10 per month standard to $5 a month, with the hope of enticing the horde of listeners now using ad-backed free streaming to move to a subscription model.

The news isn’t all bad for iTunes, as overall year-over-year global sales have increased from $4.3 billion in the third quarter last year to $4.6 billion in the same period this year. Still, Apple wants to stop the bleeding when it comes to music, and the company is making some big moves to make that happen.

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