Beats Co-Founders Dr. Dre and Jimmy Iovine Expected to Take on Senior Roles at Apple Following Acquisition

[unobtainium]

Yeah, but most of that is not technical. How long has Beats streaming service been available?

I don't think Apple bought Beats for its technology. It bought Beats to gain access to:

1) licensing deals for on-demand streaming (which would've otherwise taken years to negotiate)

2) Two executives with strong industry contacts

3) An already assembled staff of music experts and a great algorithm for matching users with music they'll enjoy

It saves them years or negotiations and development and allows them to put something on the market sooner rather than later. It's worth $3.2 billion for those reasons alone.

 

[Trapezoid]

Correct. Thought the person who called me a moron would have been able to remember a post I posted approximately 10 minutes prior.

Let it go, man. You worded your post wrong, I forgot your previous post. No biggie.

 

[unobtainium]

The last half of your post is correct.
The record companies at this point view iTunes as a necessary evil. They're terrified of Apple controlling their industry, which is why they offer other services cheaper content and better licensing agreements to compete with Apple. For instance, iTunes Radio and Pandora are practically identical services. I believe Apple pays a royalty per play to the record labels almost twice as much as Pandora does.

This. Also, it's negotiating 101.

Apple has deep pockets and a huge userbase. They're regarded as being huge and influential enough to either save or doom the music industry. That's why their negotiations with the labels have been so tortuous.

Hiring Iovine is a huge coup for Apple at the negotiating table, and if the licenses come with the deal, it's a huge slam dunk.

 

[Reds622]

I don't think Apple bought Beats for its technology. It bought Beats to gain access to:

1) licensing deals for on-demand streaming (which would've otherwise taken years to negotiate)

2) Two executives with strong industry contacts

3) An already assembled staff of music experts and a great algorithm for matching users with music they'll enjoy

It saves them years or negotiations and development and allows them to put something on the market sooner rather than later. It's worth $3.2 billion for those reasons alone.

So what happens if the licenses are non-transferrable? We don't know if they are or aren't. There are some people who are saying they might not be, although I am not completely up to speed on the law of that issue and obviously don't know the particulars of the deal between Beats and the record companies. If they aren't transferrable, and there certainly is chance that they aren't, will Apple just run Beats as an independent entity and not incorporate it into itunes? That doesn't seem like a smart idea at all, does it? They would be basically then be known as Apple/Beats, which would be a terrible move on their part. Thus, we are assuming that the licenses signed by Beats are transferrable, correct?

 

[subsonix]

I don't think Apple bought Beats for its technology. It bought Beats to gain access to:

1) licensing deals for on-demand streaming (which would've otherwise taken years to negotiate)

2) Two executives with strong industry contacts

3) An already assembled staff of music experts and a great algorithm for matching users with music they'll enjoy

It saves them years or negotiations and development and allows them to put something on the market sooner rather than later. It's worth $3.2 billion for those reasons alone.

And that would make the acquisition unusual for Apple, even assuming the "years of negotiation" is true, as if Apple doesn't have leverage. Not to mention what to do with the brands and accounts, how are they going to merge these brands, software, user accounts and music libraries.

 

[unobtainium]

So what happens if the licenses are non-transferrable? We don't know if they are or aren't. There are some people who are saying they might not be, although I am not completely up to speed on the law of that issue and obviously don't know the particulars of the deal between Beats and the record companies. If they aren't transferrable, and there certainly is chance that they aren't, will Apple just run Beats as an independent entity and not incorporate it into itunes? That doesn't seem like a smart idea at all, does it? They would be basically then be known as Apple/Beats, which would be a terrible move on their part. Thus, we are assuming that the licenses signed by Beats are transferrable, correct?

Yes. Based on the price Apple paid, I have to assume that the licenses are transferable. It wouldn't make sense to pay $3.2 billion for a headphone company that Apple doesn't need. Ergo, through deductive reasoning, I think it's safe to say that Apple is getting something pretty huge here, and that would be licenses.

 

[Trapezoid]

So what happens if the licenses are non-transferrable? We don't know if they are or aren't. There are some people who are saying they might not be, although I am not completely up to speed on the law of that issue and obviously don't know the particulars of the deal between Beats and the record companies. If they aren't transferrable, and there certainly is chance that they aren't, will Apple just run Beats as an independent entity and not incorporate it into itunes? That doesn't seem like a smart idea at all, does it? They would be basically then be known as Apple/Beats, which would be a terrible move on their part. Thus, we are assuming that the licenses signed by Beats are transferrable, correct?

Come on. They spent 3.2BN if this story is true. You're saying there's a possiblity that the licenses are not transferrable?

 

[CosmoFox]

So will I. This has absolutely nothing to do with headphones. If Apple spent 3.2B just to get headphones they deserve to go bankrupt.

I can say with 100% certainty that Apple does not deserve to go bankrupt.

Apple would make that money back in 2 years. Beats did $1.5 billion last year.

You might hate beats for whatever reason, but Apple can make their money back easily.

 

[littyboy]

Can people stop buying Beats please? Their products are so overhyped. I listened and was not impressed. I'm no audiophile either...

 

[Zxxv]

Bought an album last night.

The problem isn't people aren't buying. The problem is they are stealing. This is an education thing from parents to child.

How would you like to work all week and be told at the end thanks but we ain't paying you.

Steal or buy. Its a choice.

 

[PatriotInvasion]

Have all of you negative commenters even bothered to check out the Beats Music app? It's design and interface makes iTunes look like a brontosaurus.

I for one am excited about what this could mean for Apple over time. All of you oldies (and some who I suspect may have some racial bias towards what Beats represents) may cringe at big Beats headphones around the necks of athletes and urban youth, but the fact is these 2 guys helped build an electronics and fashion brand simultaneously that sells high margin products and leaves an impact...all over the course of 5 short years. There are plenty of smart people at Apple likely a lot smarter than you making these decisions, so think about that as you spew your sensationalistic disdain for this acquisition.

 

[iolinux333]

haha what are you basing your supposition on? You're simply stating that "I believe if Apple bought this random app, their sound quality would sound superb" with ZERO proof to back that up.

I'm sorry, subjectivity reigns supreme here, and when you actually look at it you realize that subjectivity means nothing.

But I guess that's what will make you happy. Can't really argue with that.

I invite you to find an android phone, install the free app, notice what happens, and then come back and apologize.

----------

That could make audio sound worse on any device that already does sound processing to get the most out of small speakers. I think it is best to aim for a neutral sound out of any music player and let the hi-fi process it for the best possible sound.

Umm. No.

 

[rols]

Apple would make that money back in 2 years. Beats did $1.5 billion last year.

You might hate beats for whatever reason, but Apple can make their money back easily.

That's revenue, not profits. I'm fairly sure they make decent money, but Apple wouldn't make that back in 2 years.

 

[iLilana]

wait... i get it

Macrumors has started mirroring The Onion. Awesome!

 

[Starhawk]

With Apple releasing their iWatch soon, they should have spent this $3.2 billion on a company with a track record of selling fashionable, wearable electronics at a premium price who also understand brandin... wait..

b...bb...bbbbb..but he's a rapper! Wahhhhh.

 

[Designx]

The Next Step...

Apple acquires Monster Cable.

 

[CosmoFox]

That's revenue, not profits. I'm fairly sure they make decent money, but Apple wouldn't make that back in 2 years.

Whatever it is, it's doing well, and there's no reason to think it's equivalent to lighting cash on fire, or Apple going bankrupt.

 

[Cigsm]

Because that's how the deals are set up. The post you made before your last was moot being that you thought Apple could actually acquire the rights to the licenses.

& you are wrong.

 

[MH01]

Am I the only one looking at these optimistically and thinking maybe Macs will finally have decent speakers? Apple isn't one to put other logos on products so maybe we will only see benefits from this. (I realize they're more focused on audio streaming)

How is buying Beats going to give macs better speakers? If you ever listened to their headphones , macs speakers will probably loose clarity and gain bass. My mac does not need more bass.

 

[Zxxv]

I hope they're not going to have a Beats iWatch because you know being aimed at teenagers who kinda do a lot of eh, beating off theres huge joke potential

 

[MH01]

Apple acquires Monster Cable.

Ha ha ha ha. They could increase the cost of their cables by 300%!!!!

 

[nia820]

Can someone explain why apple would purchase beats?

Ditto. Beats are so overpriced and overrated. If apple wanted to expand their music department they should develop their own high end audio devices because beats devices are sub par.

 

[Zxxv]

Maybe this was a long term plan. A strategy put in place by Steve Jobs. Maybe he knew he couldn't get the deal he wanted so he talked with Dre and Jimmy. Maybe just maybe they made a plan to steal the contract by getting them to buy it for Apple and now we see it come to fruition. Just maybe some people are smart as **** and play the long game.


*steal meaning to buy the contract from the record companies for a price they wouldn't give to apple but would others because they (the record companions) thought they were putting one over on apple and driving them out of business.

 

[ryansimmons323]

Tim's going to have to sit them down and have a chat about keeping things secret at Apple...

 

[MH01]

Headphones??

Are you just willfully ignoring the relevant information? This has nothing to do with headphones!!

Okay I think I'm getting cancer from reading this thread so I'm off.

Maybe cause that's the products they sell!?!?

And that is the relevant information here. Do you associate the iPhone with Apple ? Guess what, think beats and people think headphones.

It is speculation that Apple did it for the other reasons discussed here,fine, though it's not fact at this point in time. Though read the news everywhere and people first reaction will be , why on earth did apple pay so much for a company that produces very average headphones and is all about marketing

For me, if Apple were serious about music hardware, beats is the worst choice. If they want to get into the music industry via beats and thier contacts.....lazy lazy way to do it, but hey they got so much money, and I guess unlike Jobs, cook just cannot negotiate with the music industry, so this is probably a viable option for apple.

Though I hate the phrase used on here, but jobs would have never associated apple with beats. While jobs viewed apple products like the Leica of the photography world, beats is near the opposite scale to this.....