Apple has begun pushing the Beats Music streaming service via email to iTunes customers. The emails promote the free-to-download Beats Music app’s “Just For You” and “Tune Your Taste” features and note that Beats is now “part of the Apple family.” Apple finalized its acquisition of both Beats Music and Beats Electronics at the beginning of this month, and Apple has already begun promoting Beats Electronics via a new section on the online store and notable discounts. This email push is the second Apple promotion of the streaming app as the company has already integrated the app into the App Store’s “Apps by Apple” category. Full email below:
As Apple’s acquisition of Beats Electronics and Beats Music nears completion this financial quarter, the Cupertino and Culver City, California-based companies have begun work on transitioning select employees and technology resources from Beats to Apple, according to sources briefed on the transition. Apple executives have visited Beats’ Southern California headquarters this week and last week to offer groups of employees positions at Apple and to notify some members of the Beats staff that they will not be included in the transition.
Many Beats employees in development and creative roles have been offered positions at Apple. Many of these employees will be offered space in Apple’s Cupertino offices, but Apple is said to plan to retain the Los Angeles-area offices, and select engineers on the Beats Music streaming service will continue working out of Southern California. An email from Apple CEO Tim Cook detailed earlier this year that Beats hardware employees would transition to Phil Schiller’s team in Cupertino, so it seems likely that the headphone and speaker makers will make up the majority of the new Cupertino staff…
In the weeks between the Apple-Beats acquisition first being reported as being in final talks and the two companies both officially announcing the deal, Billboard interviewed Daniel Ek, the CEO and co-founder of the streaming music giant Spotify, asking about his take on Apple becoming a subscription streaming music competitor through Beats Music.
At the time, Ek was reserved in saying too much about the proposition. “I don’t like speculating about things that haven’t happened,” Ek stated. He did, however, say that he always believed Apple would enter the streaming music space and doubled down saying Spotify is focused on “building the best possible product” while noting the service’s 40 million users with 10 million paid customers.
Apple agreed to acquire Beats for several reasons: for the streaming music service, for the headphones, for the speakers, and to bring Dr. Dre and Jimmy Iovine into the Cupertino fold. But the New York Post believes that Apple is seeking help from the Beats team for another important area of the Apple business: advertising. It’s no secret in the technology and advertising world that Apple could not be anymore displeased with the services as of late from longtime ad partner TBWA, and unnamed ad agency executives are said to believe that the Beats team could improve Apple’s ads:
Judging by a roundup in The Wall Street Journal, analysts and investors appear not to share the enthusiasm for Beats acquisition express by Tim Cook and Eddy Cue. While Cook said he was “excited [...] about this new chapter in our history” and Cue believed that “combining the two companies will help [music] grow again,” Wall Street is more skeptical.
“To see this kind of money spent for a company that gets most of its revenue from hardware business is not what we want to see,” said Dan Niles, chief investment officer of hedge fund AlphaOne Capital Partners …
(Image via Re/code)
It’s typical in any acquisition for both parties to sing the praises of their new partner, and Eddy Cue was certainly playing his part at Re/code’s Code Conference, saying that Beats’ curated playlists were a key strength and would help music grow again. As Mark Gurman reported in his live blog coverage at Code Conference:
Cue said Apple bought Beats because “music is dying. It hasn’t been growing.” He said combining the two companies will help it grow again [...]
Cue said what makes Beats good is that it provides users with curated playlists.
He said: “When you bring what Beats has got and what we’ve got it’s not two plus two is four. It’s something much more than that” …
Earlier today, Apple announced that it has acquired Beats Electronics and Beats Music for a total of $3 billion. Tonight, two of the masterminds behind the deal will be interviewed about a range of topics at the Code Conference. Apple Senior Vice President of Software and Services Eddy Cue along with Beats co-founder and music mogul Jimmy Iovine will be interviewed by Re/code’s Walt Mossberg and Kara Swisher. Previously, Cue was scheduled to be interviewed alongside Apple Senior Software Vice President Craig Federighi, but it appears that the acquisition’s announcement changed up the plans. We are on hand for the interview and we will be providing live coverage below. The interview starts around 8PM Pacific/11PM Eastern Standard time:
Earlier this month, reports emerged claiming that Apple was in negotiations to buy headphone and streaming music company Beats for $3.2 billion, making it Apple’s largest deal in history. According to a new report out of the NY Post, Apple has recently dropped the price its willing to pay for the company to $3 billion. It’s unclear as to what exactly caused Apple to lower its offer, but a report last week broke down a variety of reasons as to why the deal could be delayed. One of the reasons was a vulgar video from Dr. Dre, that apparently “freaked” Apple out. It’s also possible that a leaked report claiming that Beats only had 110,000 paying subscribers made Apple even more skeptical.
While it was previously reported that the Apple buyout of Beats Electronics was supposed to be announced this week, Billboard has compiled a list of five different reasons the deal isn’t yet finalized according to its own sources.
A few of these potential hold-ups include issues determining Beats’ valuation and issues with finding a place for Dr. Dre and Jimmy Iovine to fit into Apple’s corporate structure. According to one of Billboard’s sources, Apple’s executives were “freaked out” by the video that surfaced a few weeks ago of Dr. Dre and Tyrese Gibson (accidentally) confirmed that a deal was in the works.
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.
“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… Read more
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.