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29/05/2014 by

Apple Buys Dr. Dre’s Beats Music For $3 Billion

Apple buys Dr. Dre’s Beats Music & Electronics for $3 billion. Who will Apple shake-up and down?

Apple Buys Dr. Dre's Beats Music For $3 Billion. By Igor Beuker for

Beats Electronics, is a headphone and music streaming specialist that also brings the swagger of rapper Dr. Dre and recording impresario Jimmy Iovine.

– Yesterday’s announcement comes nearly 3 weeks after negotiations were leaked to the media
– It’s by far the most expensive acquisition in Apple’s 38-year history
– The price consists of $2.6 billion in cash and $400 million in Apple stock
– Apple needs Dr. Dre’s firm to boost iTunes against runner up Spotify
– Radio broadcasters are wrong about streaming music and digital radio

What will happen with streaming music and digital radio now? Discover more insights here.

Apple Buys Dr. Dre’s Beats Music

With $1.1 billion in revenue in 2013, Beats is making money. And it will boost Apple’s earnings once the new fiscal year begins in October, Apple CEO Tim Cook said in an interview.

Apple Buys Dr. Dre's Beats Music For $3 Billion. By Igor Beuker for

Iovine (61) and Dre (49), will both become key executives in Apple’s music divisions, though Cook said their roles haven’t been determined yet.

Cook said Beats’ music streaming service was the main selling point in the deal.

Cook forgot to tell the press that iTunes is suffering severely from Spotify and Pandora. These music services have outsmarted the walled gardens of iTunes.

The problem with Pandora however? Due to licensing constraints, they can no longer allow access to Pandora for listeners located outside of the U.S., Australia and New Zealand.

Meanwhile Sirius XM, in a partnership with BuzzFeed, is growing thanks to a global digital audience. Spotify Radio is up and running and iTunes Radio is on air since September 2013.

Beats Music, the music streaming subsidiary of the electronics maker, has more than 250,000 subscribers, according to Cook.

My Opinion

Steve Jobs was wrong about streaming music services and digital radio.

Jobs favored smaller acquisitions and didn’t believe subscription music plans would be popular.

Sorry Steve, your walled gardens did not work. Streaming and digital radio does.

Many traditional radio broadcasters are also wrong about digital and social radio.

I have seen strategic failures at several radio broadcasters in Europe and the US lately. These linear minds see their traditional radio audiences shrink. So they panic.

But they tend to forget that digital and social radio will be as large as online video. So most of them will have to re-think their 3 year strategy.

This time using the right trends and actionable insights, not their assumptions!

Actionable insights and trends have clearly shown that streaming music and digital radio might be as big as the trend called online & social video.

Back to the drawing board, I would say. Hire nonlinear minds that really know how to build the bridge between music and technology.

What About You?
What is your opinion on this acquisition? What trends do you see in streaming music? We all get smarter from peer discussions, so share your opinion.

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About the Author
Igor Beuker is an acclaimed trendwatcher & pro speaker, serial entrepreneur, marketing consultant and board member at several disruptive media, technology and entertainment firms. Book Igor as keynote speaker, follow Igor on Twitter or contact him via LinkedIn.


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