It's well established that Apple is one of the pioneers in the digital distribution of music; however, iTunes hasn't been keeping pace. The portion of Apple's o

It's well established that Apple is one of the pioneers in the digital distribution of music; however, iTunes hasn't been keeping pace. The portion of Apple's online services revenue from iTunes has been steadily declining since Q1 of 2011 [1]. The Beats' headphones product is definitely profitable and responsible for a big chunk of that $3 billion valuation; however, I doubt that was Apple's main motivator. It seems as if Apple is doing this to both acquire the talent involved as well as the Beats' streaming service. As mentioned in the article Apple usually prefers the smaller segmented purchases, so I'm guessing Beats approached negotiations with an all-in-one mindset. As to the why Beats instead of another streaming service, it has to be some combination of the talent being just that good or the Beats' streaming service has something that distinguishes itself from others. What that is I don't know. I've heard about their mood based playlist feature and find that pretty interesting. I would like to see what happens when the physiological effects of certain music genres are researched, and then applied to develop this mood playlist concept even further. Thoughts? [1] http://www.macrumors.com/2014/05/28/beats-key-declining-itunes-momentum/ http://www.macrumors.com/2014/05/28/beats-key-declining-itun...