The headphone company purchased free online music library MOG for an undisclosed amount, according to a press release. GigaOM speculated in March that the company would go for almost $14 million (£9 million), based on sources close to MOG.
The acquisition is the first for Beats, co-founded by rapper and producer Dr. Dre and Interscope Geffen and A&M Records chairman and American Idol advisor Jimmy Iovine.
"We're thrilled to be joining forces with Beats, a company that's committed at the highest level to the experience surrounding music delivery," MOG founder and CEO David Hyman said in a statement. "The fit feels perfectly natural," he said.
He said the companies' integration will provide "a truly end-to-end music experience," saying that with MOG's talent and technology, the future innovation possibilities are "endless."
According to Beats, MOG will continue to operate as an independent company, with no immediate changes planned.
The companies were rumoured to be inking a partnership deal in March, when inside sources confirmed an acquisition, but the deal didn't close until this week.
MOG was just one among many music services Beats auditioned for the gig, Beats president and CEO Luke Wood told USA Today. But the service won them over by offering their entire catalogue in the 320 kilobit format.
Woods praised MOG in USA Today for the company's deals with LG and Samsung for TV integration, and with various car manufacturers to bring music directly into vehicles' stereos, adding that "they were very quick to push music to the smartphone."
MOG, founded in June 2005, boasts more than 15 million free songs available everywhere, via personalised radio stations and smartphone apps, as well as Facebook.
In August, Beats earned HTC's business, and a $300 million (£190 million) investment, when the phone maker announced its partnership to bring high-quality sound, and that now-iconic red "b" logo, to its smartphones, the first of which was the HTC Sensation XE. Earlier today, Verizon said it will start offering the Beats-enhanced HTC Incredible 4G LTE starting on July 5.