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Beats Music Said to Sign 1,000 Subscribers a Day in Month

Shoppers try out the Beats Electronics LLC Pro headphones, sold for $399.95, at the Beats by Dr. Dre pop-up store in New York City. Photographer: Michael Nagle/Bloomberg
Shoppers try out the Beats Electronics LLC Pro headphones, sold for $399.95, at the Beats by Dr. Dre pop-up store in New York City. Photographer: Michael Nagle/Bloomberg

March 20 (Bloomberg) -- Beats Music, the subscription streaming service started by Jimmy Iovine and Dr. Dre, signed up about 1,000 paying subscribers a day in its first month, people with knowledge of the situation said.

The company enrolled about 28,000 customers to the $9.99-a-month music service before free trials with AT&T Inc. began contributing subscribers, said the people, who requested anonymity because the information is private. Beats Music provided the figures to investors in February, they said.

The AT&T tie-in created a pipeline of 750,000 potential subscribers who signed up for 30-day and 90-day free trials starting Jan. 31, the people said. As those trials end, more than 70 percent are converting to paid subscribers, they said. For Beats Music to eventually become profitable, the company will need at least 5 million paying customers, based on an estimate from Recon Analytics in Boston.

“My first goal is 500,000 people and we’ll kill ourselves to get there,” Iovine said in a January interview.

Sarah Joyce, a spokeswoman for Santa Monica, California-based Beats Music, declined to comment yesterday on subscriber and trial figures, as did Steven Schwadron, a spokesman for Dallas-based AT&T at Fleishman Hillard Inc.

Beats Music’s strategy is to promote the service, which began on Jan. 21, through partnerships. Target Co. provided 30-day trials to some electronics and entertainment shoppers, while talk-show host Ellen DeGeneres touted Beats on air.

Family Plans

In addition to individual plans, AT&T exclusively offers a Beats Music family plan that provides access to as many as five people on each account for $14.99 a month after the 90-day trial. Those trials start ending in May.

Once the free period ends, customers are billed for the service. AT&T, which is promoting Beats Music in its television commercials, is signing up music-streaming customers online and at its retail stores.

Beats Music is challenging industry-leader Spotify Ltd. with playlists created by music experts. So far, most songs played on Beats Music are from curated lists and a feature that generates selections after a listener completes a sentence, two of the people said.

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

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum, Stephen West

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