A Marriage of Tech and Passion: Apple Buys Beats for $3 Billion
Beats and Apple press play on a new evolution in streaming music
Beats Electronics is best known for selling headphones. According to co-founder Jimmy Iovine, until Beats appeared on the market, people didn’t even know they needed sleek the $300 Beats by Dr. Dre. This point is emphasized by the fact that the Beats brand captured 40% of the billion-dollar headphone market since its 2008 debut. 
Beginning in January 2014, Beats expanded beyond the headphone business and started offering is streaming music service. Beats Music (code named “Project Daisy”) is much like the subscription-based platforms Pandora and Spotify, and also bares similarities to Rhapsody and iTunes Radio. Unlike its predecessors, however, Beats Music banks on curation as setting it apart from its competitors.
For $10 a month, Beats subscribers get access to an interactive site whose content is curated by a team of industry experts that include label executives, DJs and magazine editors. This type of curation has a human touch, and relies on more than just algorithms. In Iovine’s words, the service will be of service.
Upon opening the app the first time, Beats Music will ask you for three favorite genres and three artists that you like or love. This information provides some input for its music presentation algorithm. From there, though, a user has multiple opportunities for music discovery. One may choose music from custom tailored playlists or choose tunes based on their mood. Other sections offer timely highlights, such as an introduction to a musical legend.
One can also search the service’s 20 million-plus songs by artists. But Beats avoids the paralysis caused by a plethora of music choices that one may encounter with Spotify. Instead of just listing and categorizing music, Beats tells you what to listen to and helps you find your favorite bands, musicians and songs. By the combination of digital innovation and musical passion, Beats delivers a truly personalized music experience.
Though only a few months old, Beats has already attracted the attention of an industry forerunner. On May 28th, news broke that Apple would buy Beats for $3 billion. Apple is hoping that this groundbreaking deal will reenergize its music business. In exchange for its purchase price, Apple will receive Beats Electronics and Beats Music, as well as the services of both Iovine and Dre.
By welcoming Beats into the family, the move represents a shift from the pioneering iTunes pay-per-song model and toward streaming audio. The acquisition also sidesteps Apple’s modus operandi of creating their innovations in-house. Instead of launching its own and negotiating deals with individual labels, Apple is buying a streaming service midway through its performance. The deal also highlights how quickly the music industry is moving away from an ownership model towards one of providing on-demand access to content. 
For Beats, the deal has high potential for taking them to an even larger audience by absorbing the market clout, cachet, credibility and deep pockets of Apple. At the same time, Beats’ new parent company gains the expertise of real rock stars Iovine and Dr. Dre. It’s truly a teaming of tech brains and musical ears. Not long ago, iTunes’ a-la-carte purchases of songs were a convenient and pioneering format. Yet now, that single song purchase scheme seems to lack emotion. With the Beats curated playlists, however, Apple will receive the benefit of added personality and an editorial and customized touch.
At this time, there is no indication of how Apple’s purchase of Beats will affect iTunes or iTunes Radio. Though the logistics are not crystal clear, it’s safe to say that this mega merger of talent and industry clout will allow Apple to remain in control of as much of the digital music market as possible. Some talk of the acquisition as being Apple’s way of trying to buy “cool.” After all, if Apple wanted to build its own Spotify competitor, it very well could.
The bonus of tying Beats into Apple’s portfolio is that it gains not just the names of Iovine or Dr. Dre, but also a host of other celebrities. Artists from Usher to Vampire Weekend have made playlists for Beats Music, and Nicki Minaj and Lady Gaga have released their own Beats headphones. The magnetic pull of celebrity endorsements is essential in an increasingly crowded music streaming market. Whatever the reason for the marriage of Apple and Beats, it will be a mutual opportunity for growth and education. It’s doubtful that either company will regret this union.