5 things to know about Apple's duet with Beats

Published on NewsOK Modified: May 29, 2014 at 8:37 am •  Published: May 29, 2014
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CUPERTINO, Calif. (AP) — Apple CEO Tim Cook looked like he wanted to dance Wednesday as he discussed his company's $3 billion acquisition of Beats Electronics. The deal, by far the most expensive in Apple's 38-year history, will give the iPhone and iPod maker a line of trendy headphones known for their hip appearance and thumping bass sound.

But Cook seems most excited about the potential of Beat's still nascent music-streaming service, which currently has more than 250,000 subscribers. That's paltry compared to the more than 10 million people subscribing to Spotify's rival streaming service, Cook is confident that will change once Beats has access to the data that Apple Inc. has accumulated while selling more than 35 billion songs to more than 800 million iTunes accounts during the past 13 years.

COMBINING MATH WITH EMOTION

Apple is intrigued with Beats Music's approach to compiling playlists to suit the individual tastes of each subscriber. Rather than just grouping songs by genre or relying on toneless algorithms that analyze past listening habits, Beats also draws upon the knowledge and ears of tastemakers such as Beats' co-founders — rap music pioneer Dr. Dre and longtime recording industry executive Jimmy Iovine, who has been an engineer or producer on seminal albums made by Bruce Springsteen, Tom Petty and Dire Straits.

"We are getting the first music subscription service that got it right, that believes in human curation," Cook said during a Wednesday interview at Apple's Cupertino, California headquarters. "We think this is killer. The feeling that you get from listening to this service is so different than anything else."

FILLING A VOID

Apple is the top seller of songs downloaded over the Internet and has attracted 40 million listeners to its free iTunes Radio service since its launch eight months ago. But neither of those resonates with music lovers like a classic album or a playlist tailored for a person's mood at a particular time, according to Eddy Cue, the head of iTunes.

"With Beats, you can create a playlist that truly moves you," Cue said Wednesday. "It gives you emotions, it gives you meanings, it tells about culture. Those are things you can't get from a single song and we love that."

MONEY MAKER

Cook says Beats is already profitable, six years after Iovine, 61, and Dre, 49, started the company, which is now based in Culver City, California. Dre originally wanted to design flashy sneakers, according to Sony Music CEO Doug Morris, who considers Iovine to be his best friend. Iovine thought making a stylish line of headphones would be more lucrative. The company launched its music streaming service earlier this year.

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