First reactions:
* Really cool to have your streaming library integrated with your regular library, but probably only a big deal for people who already have big iTunes collections.
* Beats 1 is surprisingly really good. There's just something fun about the human element, and the idea of a 'worldwide' radio station is really neat. Brings out the humanist in me.
* UI is still a bit confused, especially in iTunes. iTunes has been confused for a while now. I don't think they've quite figured out how best to offer streaming and the iTunes Store side by side yet. (And the multi-mode UI is just crazy. You're looking at your music, and you want to see the iTunes Movies Store? You have to click 'Movies' icon first to switch to the movies view, and then the 'iTunes Store' button. The iTunes Store itself is just plain bad. It feels so old and slow.)
* All in all, a lot of potential but lots of kinks to work out. It's good enough to cancel my Spotify subscription, but it's not quite there yet.
My personal thoughts:
* You should be able to listen to Beats 1 on apple.com (or wherever) without a device. I'm sure it'd get a lot more people listening, and more importantly would get a lot more people talking about it, and the service.
* Beats 1 needs more dedicated UI; a way to see previous songs, a way to see a list of songs you've hearted, a way to see whatever the DJ is posting on Connect/Twitter/whatever.
* Connect shows promise, but it's a pain to navigate on an iPhone 5 screen. Again, you really need to be able to access Connect online, and the more integration with existing social networks the better. You can't be social if there's an activation barrier (downloading iTunes, creating yet another account, whatever) to access it. It seems like Connect is a service that the labels asked for anyway, so presumably they'd be happy to have more people see it.
Really cool start though.