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Beats Music, the streaming radio arm of the Beats empire, updated its iPhone app on Friday with the notable addition of in-app subscriptions, meaning the company is now paying Apple's usual 30 percent commission on new sign-ups.
The Beats Music app launched in January alongside the streaming subscription service looking to take on industry stalwarts Pandora and newcomers like Apple's own iTunes Radio. At the time, fees were processed outside of the iOS app, meaning Apple didn't get a direct share of the sign-up proceeds generated through its mobile platform.
As reported by Re/code, Beats CEO Ian Rogers said the decision to include in-app subscriptions — 30 percent of which goes to Apple — was based on Apple's massive iOS user base. According to Rogers, more than half of all Beats users own an iPhone and asking these people to sign up outside of Apple's ecosystem is "very hard," the publication said.
In addition to the iPhone, Beats is expected to launch an iPad app, which will likely draw an even larger crowd.
Moving to in-app subscriptions is "what you do when you want subscribers," Rogers said. "If you don't care if people subscribe or not, and you've got a free product, maybe then you wouldn't do it."
Re/code points out that Beats' decision to accept Apple's commission rates may raise concern over the company's performance, though Rogers claims the move is not indicative of a struggling business.
"We've had far more people try the product than projected," Rogers said. "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 coverting iOS users, and we've just fixed that."