No one expected Beats 1 to become Apple Music's standout feature, but the 24/7 radio station is winning over listeners with a mix of truly great shows, exclusive interviews, and anchor Zane Lowe's genuine love of music. Apple might replicate Beats 1's success with more live radio stations, unnamed sources told The Verge.
Apple reportedly worked out a deal with the major record labels that allows it to create five more radio stations like Beats 1 without having to pay more per play. According to The Verge's sources, Apple pays labels more per Beats 1 play than Pandora does.
Why this matters: It's unclear if Apple actually plans to use its additional licenses to make more "Always on! Worldwide!" stations, but it would make sense--Beats 1 isn't actually live 24 hours a day, and its musical agenda is largely centered around British hip-hop and electronica, which isn't everyone's cup of tea. (If it is, 9to5Mac notes that Beats 1 hosts are now adding full replays of their shows to their Connect pages instead of just playlists.)
More than 10 million people have signed up for Apple Music in the five weeks since its launch, according to music industry insiders, which is impressive. But record labels aren't gung-ho about Apple's streaming service yet, because those subscribers are all on free trials until the end of September. There's no indication how many will drop off when the free music runs out, but Apple still has time to figure out how to convert trial users into paying ones.
Another reason record labels are optimistic about Apple Music: According to The Verge's sources, Apple Music streaming hasn't cannibalized iTunes downloads yet. Downloads are slipping, but that's not a new trend, and it's part of the reason why Apple acquired Beats Music and launched Apple Music in the first place. If Apple can convince music buyers to supplement their purchases with a perk-filled paid streaming subscription, labels would have no reason to complain. (OK, let's be realistic: They'd have fewer reasons.)