3 billion for crappy headphones, 100000 subscribers and two dudes. Seems like a good deal to me. 
You've posted an interesting discussion about the Apple-as-TV-Studio concept. But there's a lot of variables in that. For one, they've had all this time where they could bypass the music company middlemen so that artists could publish directly to the iTunes music store and collect all of the money for their music. They could have monetized the whole podcast/vodcast thing by turning on paid subscriptions so that those "shows" could be monetized. Either or both would have been a great proving ground to see if cutting out the "greedy studios" by connecting artists directly to the buying public could fly. But they didn't. So why start with television?
Becoming a studio involves all kinds of other variables. Buying one would be much easier than starting one from scratch. However, what makes studios go now is the existing model of commercials and cable subscriptions. What "we" often describe as what we want in some new Apple television model is commercial-free and subscriptions that cost a fraction of what we pay now. Revenues from commercials running on 200 channels "I" never watch is HUGE. Us paying $70/month, $100/month or more is also HUGE. When you kill the commercials and dramatically cut the monthly fee, lots of money that makes it all go disappears.
Apple likes to make a LOT of profit. The "new model" that "we" generally covet seems like a change to a highly unprofitable model. One might say, "But Apple productions would only be higher quality programming that "we" would all want to buy." But even the best producers, directors, etc on the planet have flops. Often there's lots of flops between the occasional hits. That's the big risk in the whole machine- a place where a lot of that revenue goes and is burned for almost nothing until one of those nothings becomes a (hit) something. Take the sum total of all that the studios have learned from all of the years they've been in business and identify any one that is consistently a hits (only) factory. How does Apple Studio come in without revenues from commercials and with only a fraction of the money from "our" much cheaper subscription rates for "only the shows I want to watch" and do what all of the long-established Studios haven't been able to do?
Yes, Apple has sometimes seemed magical when it jumps on a new line. Would even Apple's very, very best be able to crank out hit after hit in the "new model" fantasy?
The Facts
* Apple has previously only ever purchased startups with valuable IP or the patent portfolios of bankrupt giants.
* Beats will be Apples largest ever acquisition by far.
* Beats has little or no IP that would be of value to Apple apart from its brand.
* Apple has been bleeding market share almost exclusively at the youth/budget end of the market.
* Apples recent attempt to address this (the iPhone 5c) was a complete flop. Largely because of Apples unwillingness to tarnish their reputation with a genuinely budget product. And because, Apples loyal customers were only interested in a premium product the iPhone 5s.
My Speculation
* Apple will adopt a Toyota/Lexus marketing strategy. With Apple being Lexus and Beats being Toyota.
* An Apple owned Beats will market its own smartphones and tablets - aimed at the youth and budget markets. These devices will use iOS and Apple services iTunes, App Store and iCloud (the Apple eco-system).
* These devices will have their own distinct (non-Apple) design aesthetic and will be lower spec (and cost) than the Apple range but they will be cool very, very cool. Apples know-how and production muscle will ensure that these phones stack up extremely well against the Android opposition.
* Of course Apple could start their own youth brand (and keep the $3.2 billion). However, history is littered with failures of such attempts. Beats has established a very successful youth brand.
* Beats devices will lure (tens of) millions of young customers away from Android devices and into the Apple fold. When these customers turn 30 and want a grown-up smartphone/tablet the will be locked into the Apple eco-system and buy an iPhone 11s.
* It makes sense that Apples largest ever acquisition will be used to fight Apples biggest ever battle - against Google, Android, Samsung et al.
Unless these contracts are very long term, I'm not sure how much of a difference it makes-- it becomes the same question as why Apple doesn't by Netflix for the content rights. Whatever rights they buy now will eventually need to be renegotiated.Time will tell on whether the rights are transferrable. Obviously the deal makes more sense if they are. Not sure it makes no sense otherwise, just less.
What is your "access" to dismiss his speculation out of hand? And what other insights has Isaacson been incorrect on? This is a serious question. If he is so off base, please enlighten the rest of us.
Amen to that.The old Apple would have killed this on principle after Dre took to YouTube about it.
The Facts
* Apple has previously only ever purchased startups with valuable IP or the patent portfolios of bankrupt giants.
* Beats will be Apples largest ever acquisition by far.
* Beats has little or no IP that would be of value to Apple apart from its brand.
* Apple has been bleeding market share almost exclusively at the youth/budget end of the market.
* Apples recent attempt to address this (the iPhone 5c) was a complete flop. Largely because of Apples unwillingness to tarnish their reputation with a genuinely budget product. And because, Apples loyal customers were only interested in a premium product the iPhone 5s.
My Speculation
* Apple will adopt a Toyota/Lexus marketing strategy. With Apple being Lexus and Beats being Toyota.
* An Apple owned Beats will market its own smartphones and tablets - aimed at the youth and budget markets. These devices will use iOS and Apple services iTunes, App Store and iCloud (the Apple eco-system).
* These devices will have their own distinct (non-Apple) design aesthetic and will be lower spec (and cost) than the Apple range but they will be cool very, very cool. Apples know-how and production muscle will ensure that these phones stack up extremely well against the Android opposition.
* Of course Apple could start their own youth brand (and keep the $3.2 billion). However, history is littered with failures of such attempts. Beats has established a very successful youth brand.
* Beats devices will lure (tens of) millions of young customers away from Android devices and into the Apple fold. When these customers turn 30 and want a grown-up smartphone/tablet the will be locked into the Apple eco-system and buy an iPhone 11s.
* It makes sense that Apples largest ever acquisition will be used to fight Apples biggest ever battle - against Google, Android, Samsung et al.
Now they need J.J. Abrams for the TV side, get it done Cook.
The Facts
* Apple has previously only ever purchased startups with valuable IP or the patent portfolios of bankrupt giants.
* Beats will be Apples largest ever acquisition by far.
* Beats has little or no IP that would be of value to Apple apart from its brand.
* Apple has been bleeding market share almost exclusively at the youth/budget end of the market.
* Apples recent attempt to address this (the iPhone 5c) was a complete flop. Largely because of Apples unwillingness to tarnish their reputation with a genuinely budget product. And because, Apples loyal customers were only interested in a premium product the iPhone 5s.
My Speculation
* Apple will adopt a Toyota/Lexus marketing strategy. With Apple being Lexus and Beats being Toyota.
* An Apple owned Beats will market its own smartphones and tablets - aimed at the youth and budget markets. These devices will use iOS and Apple services iTunes, App Store and iCloud (the Apple eco-system).
* These devices will have their own distinct (non-Apple) design aesthetic and will be lower spec (and cost) than the Apple range but they will be cool very, very cool. Apples know-how and production muscle will ensure that these phones stack up extremely well against the Android opposition.
* Of course Apple could start their own youth brand (and keep the $3.2 billion). However, history is littered with failures of such attempts. Beats has established a very successful youth brand.
* Beats devices will lure (tens of) millions of young customers away from Android devices and into the Apple fold. When these customers turn 30 and want a grown-up smartphone/tablet the will be locked into the Apple eco-system and buy an iPhone 11s.
* It makes sense that Apples largest ever acquisition will be used to fight Apples biggest ever battle - against Google, Android, Samsung et al.
You need to learn to do your own research. Issacson's level of understanding is well known.What is your "access" to dismiss his speculation out of hand? And what other insights has Isaacson been incorrect on? This is a serious question. If he is so off base, please enlighten the rest of us.
Unless these contracts are very long term, I'm not sure how much of a difference it makes-- it becomes the same question as why Apple doesn't by Netflix for the content rights. Whatever rights they buy now will eventually need to be renegotiated.
I think it's clear that the big content providers like a fragmented delivery infrastructure. The music industry tested the waters with Apple because they thought Apple was going to be a bit player in the end, and then woke up a couple years later to realize they'd created a monster with enormous leverage over negotiations.
The entertainment industries don't want that to happen with streaming or video content, so they give some to Netflix, some to Amazon, some to Apple, some to Spotify, etc. I'm sure Apple realizes that if they don't have the long term industry relationships, then having the short term contracts isn't going to help them.
That said, this just doesn't feel like an Apple type deal to me. Have there been other big deals like this that have gotten advance attention and turned out to be true?
The old Apple would have killed this on principle after Dre took to YouTube about it.
Exactly. I now have a very low opinion of this man. Wonder how many more times he'll say "oh, one more thing Jobs told me that I didn't put in the book." Reeks of desperation and limelight seeking. Not to mention, he's stating the obvious. Apple bought a company and probably most of the employees at Beats.Who the hell cares about this guy anymore? Why are people still interviewing him like he is some expert on Apple? He wasn't even an expert on Steve Jobs and he had years to get to know him! Every time Isaacson's name comes up in relation to Apple I just shake my head and think, "how long is he going to keep cashing in on another man's tragedy?"
Shameless, Modern Family, Breaking Bad, Game of Thrones, True Detective, Penny Dreadful, New Girl, The Daily Show, The Americans, The Late Late Show, Louie, The Colbert Report, South Park, Fargo, The Walking Dead.
Just a taste of some great shows from the top of my head that nothing on YouTube can touch. It's not my fault that you think the only thing on TV is Jersey Shore.
I like your ability to think outside the box. Its a plausible theory indeed.
It's not something I have seen suggested so far but I have been wondering whether part of the reason for purchasing beats is to use the brand for launching a slightly lower end phone that appeals to a different part of the market. A Beats phone would run ios, and wouldn't be branded apple in any way other than the software. It would allow for a lower end, lower quality product without potentially damaging apples brand. It would be as close as possible to licensing ios without losing control.
That is one expensive acquihire. Even Steve Jobs didn't cost that much.
So, your analysis is that Apple is really doing this to get access to Dr. Dre? Got it.
The Facts
* Apple has previously only ever purchased startups with valuable IP or the patent portfolios of bankrupt giants.
* Beats will be Apples largest ever acquisition by far.
* Beats has little or no IP that would be of value to Apple apart from its brand.
* Apple has been bleeding market share almost exclusively at the youth/budget end of the market.
* Apples recent attempt to address this (the iPhone 5c) was a complete flop. Largely because of Apples unwillingness to tarnish their reputation with a genuinely budget product. And because, Apples loyal customers were only interested in a premium product the iPhone 5s.
My Speculation
* Apple will adopt a Toyota/Lexus marketing strategy. With Apple being Lexus and Beats being Toyota.
* An Apple owned Beats will market its own smartphones and tablets - aimed at the youth and budget markets. These devices will use iOS and Apple services iTunes, App Store and iCloud (the Apple eco-system).
* These devices will have their own distinct (non-Apple) design aesthetic and will be lower spec (and cost) than the Apple range but they will be cool very, very cool. Apples know-how and production muscle will ensure that these phones stack up extremely well against the Android opposition.
* Of course Apple could start their own youth brand (and keep the $3.2 billion). However, history is littered with failures of such attempts. Beats has established a very successful youth brand.
* Beats devices will lure (tens of) millions of young customers away from Android devices and into the Apple fold. When these customers turn 30 and want a grown-up smartphone/tablet the will be locked into the Apple eco-system and buy an iPhone 11s.
* It makes sense that Apples largest ever acquisition will be used to fight Apples biggest ever battle - against Google, Android, Samsung et al.