News & Views

What's In A Name?

by Chris Barth

Why Apple's Beats Music Decision Doesn't Matter One Way Or The Other

Industry wonks were surprised yesterday – shocked, even! – to hear the news that Apple may be 'shuttering Beats' Music, the streaming music service it acquired, along with a massively profitable headphone brand, in its $3bn purchase of Beats Electronics this August. I'm here to tell you that 'shuttering' is semantics, and it really doesn't matter.

As I wrote in June, when Apple first announced its plan to buy the pair of Beats products, I believe Beats Music is the hidden gem of Apple's big spending – the upside of the deal. But I don't think that is because of Beats Music's brand. Beats' brand is in its headphones, which were designed to be noticed from across the street and have become a luxury fashion item upon which the premium headphone category has been built.

With Beats Music, though, I think the value lies in the technology and approach to streaming music: human-curated playlists, emphasis on user experience, seamless transition between online and offline listening, etc. Apple may be shuttering 'Beats Music', but that approach with undoubtedly make its way into Apple's 800 million user music player, iTunes, as it continues to work towards entering the streaming music game. Apple acquired a talented team with a mature perspective on how to succeed in streaming music – one that has already been through the fits and starts of creating a modern music service – and will be putting those skills to use, just in a building with an iTunes sign outside of it. Let's not cry foul because the world's biggest brand is changing the name of an app.

I spoke with Beats CMO Omar Johnson in July, for our case study on the Beats brand in Contagious Issue 40 (subscribers can read it here). My favorite quote of his referenced his excitement to be working with (and now for) a world-class partner like Apple. In his words: 'It's like I had this really cool sandbox with all these cool toys. My sandbox just turned into Disney World.'

Beyond that, Johnson was excited about the synergies created by the link-up of the two companies. Apple now owns an entire ecosystem from start to finish, from the device in millions of pockets to the music they're playing to the headphones they're listening to or the speakers they're playing.

'As a marketer, when you have success, you want new challenges to go and conquer. I think the very simple one is connecting the dots. Now between a tablet, your computer, your phone, now you really have detail storytelling, where you can be really see-say,' said Johnson. 'You look at the Ed Sheeran commercial: he goes in, he starts his playlist, he puts his phone down, he's got his headphones, he's doing his thing. So just from a connecting the dots, ecosystem perspective,this really fleshes out the whole idea. That circle has been completed.'

Whether that circle passes through an app called Beats Music or through the app formerly known as Beats Music, now part of iTunes, doesn't matter at all. In fact, it's likely a smart decision for Apple to route people through familiar channels like iTunes, boosting the value of a product that redefined the music industry but has taken a hit in recent years thanks to competitors like Spotify and Pandora.

I'd be surprised if Apple were taking the Beats brand off its iconic headphones and replacing it with an Apple logo. But for a music product launched just nine months ago, this decision is a smart one that, in the end, will have very few negative consequences for Apple. I could be wrong, of course, and Apple may be simply turning its back on streaming music once and for all. But that seems highly unlikely. Instead, this is a semantic change alone, and a matter of smart brand consolidation.