Beats Music – the competitor who took on Spotify, Pandora and Rdio with human curated playlists has given a major update to its iOS users – in-app purchases.
Initially pegged for a $9.99 paid service for users, it eventually went free with limitations in iOS and anybody who wanted to purchase the premium service had to do it outside the Apple’s ecosystem. But with the 1.07 update released yesterday, things have changed for the good and now the users can buy premium subscriptions right from the app. We at The Westside Story thinks this is a double edged sword as enabling any kind of purchase model in the app store makes you pay 30% of the price to Apple, which equates to roughly $3 per subscription which quite significant. This cuts back the profits Beats can make by 30%.
On the other hand, the loss might not be too big if the user base increases significantly in the future and that is exactly what Dr.Dre would love to see. This is already proving a good tactic by Beats as nearly 28,000 subscribers have updated to the new app and nearly 70% of them have purchased the premium subscription in under 24 hours. The service has over 20 million songs and lets the users stream online or save to the storage of the device and listen back in leisure.