Streaming radio arm of the Beats empire, Beats Music, recently updated its iPhone app and added in-app subscriptions, therefore the company is now paying Apple 30% commission on all new signups. Beats Music app was first released in January with streaming subscription service hoping to do business with Pandora and newcomers like Apple’s very own iTunes Radio. But at the time, Apple did not get direct share of the signup proceeds generating from the mobile platform because fees were processed outside of the iOS app.
Re/code reported that Ian Rogers, Beats CEO, said that the decision to introduce in-app subscriptions was because of Apple’s massive iOS user base. Rogers said that half of all Beats users use an iPhone, therefore asking them to sign up outside of Apple’s platform is extremely hard. On top of being an iPhone app, Beats is expecting to launch the iPad version, which will most likely draw an even bigger crowd.
According to Rogers,
Moving to in-app subscriptions is what you do when you want subscribers. If you don't care if people subscribe or not, and you've got a free product, maybe then you wouldn't do it. We've had far more people try the product than projected. Clearly the marketing works. The conversion rate on the AT&T plan is off the charts. It's safe to say the biggest problem is converting iOS users, and we've just fixed that.