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.
That's weak. And it serves them right. "Them" being the celebrity names who launched Beats with bravado and fanfare, but zero humility. According to cats like Trent Reznor everybody, particularly Pandora, has been doing Internet radio wrong. And, by letting people such as Himself curate the music via playlist delivery, Beats would right those wrongs.
Except that hasn't happened. Because, outside of a handful of music snobs, most people don't think there's much wrong with Internet radio in the first place. We all have our favorites. And we're listening to them.
For some background and context, see a pair of January 2014 articles that coincided with Beats' launch:
Beats entered the scene using some flavor of the arrogant approach that has worked for Reed Hastings at Netflix (NFLX). However, Hastings has always had something going for him Beats' founders and executives do not -- people are used to paying for television. And they hate it. They feel like they're being ripped off and can do nothing about it. They were ripe for a savior.
Coming in at a $7.99 price point (though that's about to change), Hastings was able to position Netflix as a value-delivering hero. The anti-cable. That's two parts brilliant, one part phony. And it's working.