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Beats Music Delays Start of AT&T Family Plan on Demand

Jan. 27 (Bloomberg) -- Beats Music, the streaming service from rapper Dr. Dre and record producer Jimmy Iovine, delayed the start of a family plan with AT&T Inc. by five days, citing overwhelming demand for the service.

The $15-a-month family plan will begin on Jan. 31, the companies said today in an e-mail. The AT&T introduction was scheduled to start yesterday.

The delay slows a marketing effort that Beats Music is counting on to attract fans and challenge Spotify Ltd., the world’s biggest subscription music-streaming company with 6 million paying customers and 24 million total listeners. Beats Music today is the top free music application on Apple Inc.’s AppStore, outranking apps for Pandora Media Inc. and Spotify.

AT&T is offering customers of its family plan a 90-day free trial before charges appear on their monthly bills. People who sign up for the $10 individual plan get 30 days free. Target is providing 30-day free trials to electronics shoppers at its retail stores.

“Due to overwhelming initial demand for the Beats Music app, we’re now planning to launch our exclusive Beats family offer in our retail stores and online on Jan. 31,” AT&T said in an e-mail.

Beats Music is also running a commercial during the Feb. 2 Super Bowl, and Ellen DeGeneres will demonstrate the service on her daytime talk show.

Streaming Arrives

AT&T, based in Dallas, gained 0.3 percent to $33.51 at the close in New York. The stock rose 4.3 percent last year.

Purchases of digital music, a format dominated by Apple Inc.’s iTunes that propped up industry sales for a decade, declined for the first time in 2013, according to researcher Nielsen SoundScan. Meanwhile, use of streaming services increased 32 percent last year.

Music-streaming services need 5 million to 10 million paying customers to be profitable after paying licensing fees to rights holders, according to Roger Entner, an analyst with Recon Analytics in Boston.

The worldwide market is projected to reach 191 million paying subscribers by 2019, according to ABI Research, an increase from the estimated 29 million last year.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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