Beats Music Said to Sign 1000 Subscribers a Day in Month – 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. (T) 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

To contact the editors responsible for this story:
Anthony Palazzo at
Rob Golum, Stephen West


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