So, Apple acquires music streaming service lala.com in late 2009 for $80 million and shuts it down unceremoniously.
Less than 5 years later pays $3 billion for Beats electronics, largely for their music streaming service.
Apple Confirms Its $3 Billion Deal for Beats Electronics
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Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#12An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…
Even though Cook said it's not about building it, "it's the people. It's the service", is $3 billion worth what is essentially an acquihire? EDIT: Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit. They become behemoths that die slow deaths. I want to see Apple continue to reinvent based on their vision. I don't wan…
Yes because it's a profitable business and will be accretive right away. The financials provide a baseline for why this deal is good, Iovine/Dre and Beats Music is just a free call option.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#13An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…
Even though Cook said it's not about building it, "it's the people. It's the service", is $3 billion worth what is essentially an acquihire? EDIT: Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit. They become behemoths that die slow deaths. I want to see Apple continue to reinvent based on their vision. I don't wan…
True but if they're the best people that might be the only way to get them. The company makes a lot of money so you have to take that into account - it's going to continue make a lot of money under Apple. I think enough that they could make that $3bn back in 5 years on headphone sales alone even if the streaming service didn't work out.
Edit:
>> "Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit."
I agree. I don't think Apple was buying for profit. But when you're valuing a company the fact they are really profitable has to factor into the price. I read they made almost $1bn last year selling headphones so $3bn isn't a crazy valuation.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#14Depending on the details of the deal, this may make Dr Dre hip hop's first billionaire.
When the rumour was $3.2bn he wasn't going to become a billionaire despite his video stating his was - so now the price has dropped he certainly isn't one. Also - what does Beats have to do with his career in hip hop? Hip hop didn't make him almost $1bn, an electronics company he co-founded did. It just irks me every time I see 'hip hops first billionaire'. It has absolutely nothing to do with hip hop.
> It has absolutely nothing to do with hip hop.
His notoriety has everything to do with hip-hop, and his stake in the company has everything to do with his notoriety as a hip-hop artist.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#15So, Apple acquires music streaming service lala.com in late 2009 for $80 million and shuts it down unceremoniously. Less than 5 years later pays $3 billion for Beats electronics, largely for their music streaming service.
Lala became iTunes Radio AFAIK.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#16An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…
Interestingly, I find the exact opposite-- Beats is inferior to Spotify (or other competition such as Rdio) in my opinion.
This isn't necessarily because of the curated playlists, but it's the service as a whole. Beats is quite rudimentary in terms of music management, and requires way too many taps to add multiple songs to playlists or even just shuffle play a playlist. When I'm trying to listen to music I know I like, Beats falls behind. The curated playlists are kind of a distraction with my usage, and I personally wish they'd focus less on the celebrity playlists and more on letting me listen to music I like.
Of course, as you demonstrated, Beats is a hit or miss because of its focus on discovery/curation over music playback. It all depends on the user and how her or she prefers to listen to music.
Disclaimer: I do still subscribe to Beats, but only because of the AT&T deal that makes it cheap for 5 users.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#17"Apple, the company that turned digital music into a mainstream phenomenon"
Is this guy serious?
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#18Depending on the details of the deal, this may make Dr Dre hip hop's first billionaire.
It will make him close, but not there. I'm sure Diddy is no motivated to start some tech startup idea.
Curtis "50cent" Jackson seems to have followed in Dre's footsteps and now has his own headphone line http://smsby50.com/ . Wouldn't it be interesting if they were acquire by a Google/Microsoft/Amazon?
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#19An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…
Even though Cook said it's not about building it, "it's the people. It's the service", is $3 billion worth what is essentially an acquihire? EDIT: Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit. They become behemoths that die slow deaths. I want to see Apple continue to reinvent based on their vision. I don't wan…
The reason for the purchase might be the people, but it doesn't mean the people are the only thing determining its value. They had > $1b in revenue last year, and that can't just be ignored when determining a fair value for the company.
Re: Apple Confirms Its $3 Billion Deal for Beats Electronics
#20An important quote from the article: >> “Could Eddy’s team have built a subscription service? Of course,” he said. “We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.” From my usage of the Beats streaming service it stands head and shoulders above everyone else because of the people it has creating pl…
Even though Cook said it's not about building it, "it's the people. It's the service", is $3 billion worth what is essentially an acquihire? EDIT: Right, it's still a profitable business regardless and I should have touched on that. But I don't want to see big tech companies acquire just for profit. They become behemoths that die slow deaths. I want to see Apple continue to reinvent based on their vision. I don't wan…
Beats has a well known brand, and their headphones business is doing pretty well for itself. It's in a whole different league from the usual "buy a startup with a tiny market share and shut down their operations to repurpose the engineers six months later" acquihire.