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Beats Electronics

302 'Beats' stories January 2014 - May 2014
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Beats Electronics was created in 2006 by Dr. Dre and Jimmy Iovine. They focused on premium speakers and headphones. In 2011, it was estimated they had over 60% of the $100+ speaker market. On August 1, 2014, Apple acquired the company for $3 billion in cash and stock. It was the largest acquisition in Apple’s history.

After being acquired by Apple, Beats Music (a Spotify competitor) was shut down and many of its features found their way into Apple Music. Apple continues to release products under the brand today.

Current Products:

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Spotify confirms it now has 10 million paying subscribers

Avatar for Jordan Kahn May 21 2014 - 7:05 am PT
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On the heels of the Beats acquisition that Apple is still yet to officially confirm, every music streaming service’s biggest competitor is today hoping to keep everyone interested: Spotify just announced it has increased its paid subscriber base to 10 million users from the 6 million users it reported earlier this year in March. Recode first posted the stats and also noted on top of paid customers Spotify now “has more than 40 million active users, in 56 markets around the world.”

Spotify of course has a big lead on Beats’ recently launched subscription music service, which as of latest reports has just around a couple hundred thousand paying subscribers. Also of note, there is some confusion over whether or not Beats subscriber numbers include those getting a free 90-day subscription through AT&T and subscribers getting access through a $14.99 group plan. However, it’s clear Beats early sub numbers aren’t that important to Apple’s long-term goals and its plan for the company and streaming service. Even Spotify’s CEO Daniel Ek admitted to Recode “that the service has yet to break through to mainstream audiences in many markets, including the United States.”

Beats co-founder Steven Lamar brings royalty claim, reveals the company’s early Apple connection

Avatar for Mike Beasley May 20 2014 - 4:34 pm PT
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Steven Lamar, who helped create Beats headphones in 2006, has filed a complaint against Dr. Dre and Jimmy Iovine claiming he’s owed royalties on most of the company’s latest headphones, according to the Hollywood Reporter. In the complaint, Lamar recounts the earliest connection between Beats and Apple—and that the Cupertino company was almost the first Beats distributor.

Back in 2006, Lamar first hatched the idea for a line of celebrity-endorsed headphones. He took the idea to Interscope Records co-founder Jimmy Iovine and asked if Dr. Dre would be the celebrity sponsor. Lamar worked with a firm called Pentagram to create the first design for what would become Beats headphones.

That’s when Ivovine introduced Lamar to Apple retail VP Jerry McDougal. Lamar suggested to McDougal that Beats headphones should be sold in Apple retail stores, even going so far as to design the packaging around that very idea. McDougal introduced Lamar to Don Inmon, the man responsible for product placement in Apple’s retail stores.


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Jobs’ biographer believes Beats purchase is about video, not headphones and music

Avatar for Zac Hall May 19 2014 - 2:09 pm PT
22 Comments
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With the expected Beats Electronics acquisition by Apple expected to take a week longer than first reported, industry watchers are making their last minute predictions as to why Apple would be interested in the audio and music service company.

The latest notable guess? Walter Isaacson, the man who literally wrote the book on Steve Jobs. Dan Lyons, former Fake Steve Jobs, reporting for Billboard:

“Isaacson thinks the Apple-Beats deal is not about headphones or streaming music but rather is about video. He speculates that Cook wants Iovine to run Apple’s content business and help Apple launch the TV product that analysts have been gossiping about for years. The product has been held up because Apple can’t get all the content owners on board.”

Lyons adds that Isaacson shared with him something which he did not include in the authorized biography of the late Apple co-founder: Jobs was pitched on Apple buying Universal by Jimmy Iovine around 2002 or 2003…
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MOG founder and former Beats Music CEO suing Beats for $20 million ahead of expected Apple buy

Avatar for Zac Hall May 16 2014 - 8:54 am PT
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Luke Wood, Jimmy Iovine, & Dr. Dre

Just as Apple is expected to close on a deal with Beats Electronics as soon as next week, a new report from The Wrap shares that David Hyman, the founder of music service MOG which Beats purchased, is suing the headphones and streaming music company for at least $20 million plus interest.

The suit claims that, under an incentive plan adopted during Hyman’s tenure, he would be entitled to compensation including 2.5 percent of the company’s “currently outstanding equity interests,” with 1 percent due on the first anniversary of Hyman’s date of employment, and subsequent installments due in subsequent months. The suit also claims that he was promised a grant of 25 percent of the company’s outstanding equity interests following adoption of the incentive plan if the company achieved a fair market value of $500 million or more.

Hyman served as founder and CEO of the MOG music service for seven years until Beats Electronics purchased it for $14 million in May 2012. Hyman stayed on to head the music service that is now Beats Music where he served as CEO for just seven months.


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Beats buyout may take a little longer than expected, could be finalized next week

Avatar for Mike Beasley May 14 2014 - 8:52 pm PT
18 Comments

Last week it was reported that Apple was in final talks to acquire Beats Electronics for over $3 billion, and that the buyout would be completed by this week. Now a new report from Re/code indicates that the deal may take a little longer than initially expected. According to Re/code’s sources, the deal may not be finalized until next week.

Beats cofounders Dr. Dre and Jimmy Iovine are expected to join Apple’s executive team after the acquisition and will reportedly appear onstage at WWDC next month. While Apple hasn’t given any indication of why it’s interested in buying the company, it’s not hard to conclude that its iconic headphones and new music streaming service both have big potential as part of Apple’s future. Dre and Iovine both also have connections to the music industry that could benefit Apple greatly.

It seems we’ll have to wait a little longer to find out exactly what Apple plans to do with its latest acquisition.

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Beats Music had only 111k subscribers in March, claims music blog

Avatar for Ben Lovejoy May 13 2014 - 5:35 am PT
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If a leaked royalties report posted by a musician’s blog is genuine, Beats Music subscribers certainly played no part in Apple’s presumed decision to acquire the company. The report appears to indicate that the service paid first quarter royalties to musicians based on total subscriber numbers of just 110,992.

As Business Insider notes, there are a couple of complications that make it hard to determine the actual number of paid subscribers. First, the majority of subscriptions are family packages, where a single payment of $14.99 a month allows up to five users to access the service. The total number of users will thus be higher than the raw subscription figures.

Against this, however, a promotion by AT&T offering free 90-day subscriptions mean that many of those appearing in the subscriber numbers may have paid nothing.

Either way, the numbers are irrelevant to Apple. With the headphone business bringing in $1B a year, Apple appears to have bought itself a well-respected streaming music technology, unrivalled music industry expertise and contacts, and a highly successful marketing team, for a bargain price.

Beats acquisition may be part of a new focus on music quality, suggests Japanese blog

Avatar for Ben Lovejoy May 13 2014 - 4:29 am PT
33 Comments
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Following the presumed acquisition of Beats, Apple plans to up its music game with support for high-resolution audio files in a revamped Music app in iOS 8, and to offer a higher-quality version of its In-Ear Headphones, reports Japanese blog Macotakara. 

The source of the high-res audio rumor appears somewhat circumstantial, linked to a Warner Music post about the forthcoming release of a ‘Super Deluxe’ version of three remastered early Led Zeppelin albums in 96kHz/24-bit form – a resolution the current iOS Music app cannot play. It is, however, consistent with a similar earlier rumor regarding iTunes support for higher-quality audio … 
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Apple and Beats not such strange bedfellows, argues Bloomberg

Avatar for Ben Lovejoy May 12 2014 - 4:38 am PT
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Steve Jobs and Jimmy Iovine in 2008 (Photo: Jeffrey Mayer/WireImage via Getty Images)

A Bloomberg analysis of the presumed acquisition of Beats Electronics by Apple says that while the two companies may have very different cultures, the partnership is not so strange as it might first appear.

“These aren’t strange bedfellows at all,” said Peter Csathy, chief executive officer of entertainment law firm Manatt Digital Media Ventures. “Steve Jobs really drove the relationship with the music industry. The executives at Apple and Beats know each other very well, and there’s a comfort level there” …


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Opinion: Beats Music is actually so good that I’m worried about Apple ruining it (à la LaLa)

Avatar for Zac Hall May 9 2014 - 9:42 am PT
23 Comments
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Beats Music for iPhone

My first reaction to yesterday’s news that Apple is nearing the close of a $3.2 billion deal to purchase Beats Electronics was one of worry, but not for the reasons that I saw in much of the commentary from others. I’m less concerned with what Apple could have planned for the headphones business or that the price tag is so high; after all, it’s exciting to think that Apple could make a major acquisition (its largest yet) after somewhat of a quiet period. What worries me is what Apple has planned for the not-so-popular-yet subscription streaming service Beats Music…

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Opinion: What is Apple’s thinking in spending $3.2B on buying Beats?

Avatar for Ben Lovejoy May 9 2014 - 6:51 am PT
82 Comments
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Apple’s apparent purchase of Beats took everyone by surprise. I must confess that my immediate reaction was to be slightly appalled. As someone whose audio tastes run more to B&O and B+W, I’ve always viewed Beats headphones as over-bassed, over-priced fashion items. But then my tastes in music admittedly differ somewhat from those of the typical Beats customer.

Even so, it’s still a little baffling at first glance. Tim Cook himself said a year ago that Apple asks two questions when considering an acquisition:

Would it help us make a great product, and would the culture fit at Apple?

My immediate answer to both would be “no,” so why would Apple spend $3.2B on a headphone manufacturer with a small sideline streaming music service … ? 
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Beats Music 2.0 update delivers iPad version for subscription music service

Avatar for Zac Hall May 1 2014 - 11:25 am PT
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Well, there it is. Beats Music updated to version 2.0 today bringing native support for the streaming music subscription service for iPad users. Beats Music teased the iPad version just yesterday in a teaser image shared over Twitter. Beats Music also recently added support for in-app subscription purchasing making it easier for users to use the full version of the service. The update also includes the ability to find other Beats Music users you may already know through Twitter.
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Beats Music teases upcoming iPad version of streaming service

Avatar for Zac Hall Apr 30 2014 - 1:04 pm PT
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After being announced last fall and debuting an iPhone app at launch in January, streaming music service Beats is finally ready to ship an iPad-optimized version of its software… almost. Beats Music tweeted the photo above earlier today with the caption “THIS JUST IN: Your favorite Music App is feeling ready to grow in size…literally… “. The news follows recent moves to increase accessibility to becoming a paid subscriber to the service as it recently added in-app subscription purchasing capability (something which gives Apple a 30% cut of the rate).

Beats Music updated with subscriptions via in-app purchase, Facebook friend search, and a lot more

Avatar for Mike Beasley Apr 18 2014 - 5:48 pm PT
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Beats Music for iOS was updated today to version 1.0.7, but don’t let the minor version number bump fool you: this update has a lot of new stuff, including an entirely new subscription model, packed in.

The biggest news in this update is the option to purchase a subscription directly from the iTunes Store through an in-app purchase. Previously users had to add the Beats Music service to their carrier phone bill in order to enjoy the full feature set, such as on-demand streaming music and downloads.


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Beats Music streaming service launches on iPhone for $9.99 a month

Avatar for Benjamin Mayo Jan 21 2014 - 2:37 am PT
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Beats Music is now available for iPhone on the App Store, after being originally announced back in October. The app is a very stylised adaption of a typical music streaming service app, with Beats heavily pushing the idea of customisation and curation to distance it from its many competitors.


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