Beats Music Being Folded Into iTunes As Download Sales Plummet

Last month, TechCrunch reported that Apple had plans to shut down Beats Music, the streaming service acquired by the tech giant in May of this year. Recode quickly refuted the rumor (sort of), saying, “Apple won’t shutter the streaming service. It may, however, modify it over time, and one of those changes could involve changing the Beats Music brand.” The difference between “shuttering” and “modifying” is largely a matter of semantics, and now, the Wall Street Journal has clarified those semantics somewhat. WSJ reports: “Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter.”

That makes sense. Apple launched iTunes Radio in June 2013, but that service provided a user experience more comparable to Pandora than Spotify, using algorithms to create playlists rather than allowing the user to create his or her own playlists (or stream albums in full). Adding a true streaming service to iTunes’ existing package allows Apple to better compete with Spotify. And there’s a strong financial incentive for such a move. Per WSJ:

Music sales at Apple’s iTunes Store have fallen 13% to 14% world-wide since the start of the year, according to people familiar with the matter. The decline is stark compared with a much shallower dip last year. Global revenue from downloads fell 2.1% in 2013, according to the International Federation of the Phonographic Industry.

So Beats is not being “shut down,” but “rebuilt” to give Apple a foothold in the streaming game (incidentally, Beats was originally conceived as a Spotify alternative, so this isn’t exactly a major philosophical shift). Whether it’s still called Beats Music — or retains any of the original service’s signature quirks (like “The Sentence“) — remains to be seen. As Apple already laid off some 30% of Beats employees soon after the initial acquisition, what also remains to be seen is who’s working there when the rebuild is complete.