Beats might have some popular headphones, but their music service hasn't quite caught on.
In the first 100 days since its launch, Beats Music has only been able to muster up a subscriber count in the "low six-figures," according to Billboard. Even with a monster promotional campaign, having Dr. Dre on board, and kids everywhere scooping up their headphones, the music service can't go toe-to-toe with players in a crowded market. Many people already use Pandora, Spotify, or Rdio, and with their playlists and settings already built, there's really no reason to make the switch to Beats Music.
The key metric for the labels is the so-called "conversion rate" -- the rate at which free trials to road-test a streaming service lead to paying subscribers. Label sources estimate the Beats Music subscriber count to be in the "low six figures." Beats representatives declined to comment for this story, but company insiders argue that subscriptions and consumer reaction has met expectations and that the "millions of people" trying out the service exceeded internal projections.
Some label sources say Beats Music should scrap its original advertising-led approach and give away more free music. "We've learned from Spotify that you have to fund free for a length of time with users investing time, creating playlists and getting used to the service," says one senior executive.