Beats Electronics, known for its big selling headphones, is also a streaming music company that charges a $10 dollar monthly fee. Tech giant Apple Inc. took a leap on Wednesday when Steve Jobs successor, Tim Cook, decided to buy Beats By Dre for $3 billion dollars. This was merely days after Spotify, one of Beats biggest competitors, announced it had more than 10 million subscribers to its Internet music platform. The reason for the competition, as well as a similar challenge for both companies is as follows-“attracting the mainstream consumers who haven’t yet warmed to paying monthly fees for music they don’t own” (LA Times).

Beats, which made its money selling headphones and portable speakers, should now expect to gain in marketing due to the new connection to Apple. Apple is a company that has a certain synergy; the capability to preload its music service onto every device that has a screen. One argument, however, incorporates just how far the digital music industry can go. It sure has changed the way we listen and stream our entertainment. But, there is still one major issue:

“One thing that it (digital) doesn’t change is that there are 10 million aspiring musicians and three major record labels. The power differential is very, very large.”

Good news regarding this? A decade back, after the first subscription music service launched, the numbers of subscribers didn’t grow as expected. Today, things have changed. Subscribers in United States have grown drastically, from 3.4 million in 2012, to 6.1 million last year. Therefore, for those of you wondering if the artists don’t get paid enough, they do. In fact, streaming-music companies sometimes pay up to 70% of its own revenue to the artists. Where does the rest of the money go? Well, that small 30% is used for advertising and promotional campaigns, which explain why one should sign up for the service to begin with. Although it could easily be up for debate whether or not this is worth it for a company, what other choice is there? Surely we aren’t going back to illegal downloading and calling it fair. What isn’t up for debate is whether these subscription services are profitable. They surely are or they wouldn’t exist.

Is it Apple’s next move to convince customers to buy their access to its music for a monthly fee? Considering the ink is barely dry on this deal, many details are yet to be revealed on what this means for Apple. Analysts have said the deal could be one way to offset declining iTunes song downloads, and to bring more revenue towards the Apple Store rather than all of its revenue deriving from devices. Further, Apple’s purchase could increase the popularity of subscribing to a music service, which could help other streaming companies by shifting point of view. Apple has always preserved its influence on companies by giving birth to new product categories. On the other hand, the opposite effect could happen, hindering the value of music subscriptions because Apple makes so much money with its electronics. The company must create an attractive portfolio, offering bundled discounts and making Beats Music a driving force in its new streaming service. Considering Apple spent a mere 2% of its $150 billion dollar bank to purchase an already rich company, I think it successfully got itself a bargain.