iTunes or Beats?

It's been roughly half a year since Apple purchased Beats, and apart from a few updates to the Beats app, not much has been done that is visible from the outside. To be fair, integrating a huge team into an even larger company with a unique way doing things isn't easy. Apple had to let go 200 of the 700 person team, likely because teams at Apple tend to be small. 

Recently, however, it's been reported that the Beats brand will be subsumed into the iTunes brand, presumably as the iTunes music streaming service. If Apple goes this route, I think they will be forfeiting a lot of goodwill from the Beats brand. 

iTunes is a dinosaur, and it is seen as such by many music listeners. At University, I know very few people who still use iTunes, instead opting for streaming services like Spotify, Pandora, and Rdio. iTunes has an ancient business model, requiring you to buy and own songs and albums individually. People have long been transitioning away from owning music to leasing it, and iTunes is associated with the old world. Rebranding the new Beats music streaming service as iTunes streaming, or something similar, will diminish the goodwill the Beats purchase brought. It must be difficult for Apple to let go of the product that started the whole music revolution, but every product has a definite life span and should at times be euthanized. 

When the Beats purchase was announced, I was looking forward to it being the new iTunes. I still think this would be the best strategy for Apple. Rebrand iTunes as Beats, and make the new service primarily a music streaming service, while also offering music purchases for those who want it. Although Beats headphones are looked down upon within the tech community, most consumers love them because they look great and are represented by Dr. Dre (who is not an actual doctor). Similarly, the music streaming service should be pitched as the cool streaming service - one that has ties to the music industry. Apple has many contacts in the music business, and striking deals with musicians and labels to promote their music on Beats would be a winning strategy. Of course, the music industry doesn't want to bow to Apple as it did with iTunes, but Apple has the leverage to negotiate favorable contracts (Apple had 800 million accounts registered in April, most of which have credit cards attached).

Apple probably did this cost benefit analysis, and it still decided to go with iTunes as the brand for all of its music products. They decided to keep the iTunes name because it's such an established brand, which everybody has heard of. But this is precisely why iTunes should be rebranded to Beats. People know about iTunes, but it's no longer the cool new product from Apple. The brand can stick around for another few years, but this is a long term play, and Beats is a name that can possess the cool factor for the next decade.