updated 06:47 pm EDT, Wed May 28, 2014
Notes that Beats' music service got subscription 'right'
In a memo to employees following Apple's $3 billion acquisition of Beats Music and Beats Electronics, CEO Tim Cook has described the purchase as a way to "make our incredible iTunes lineup even better, extending the emotional connection our customers have with music." He also made note of the fact that Apple felt the way Beats music, while a fledgling service, had handled the concept of subscriptions, calling it "just right."
Other details released outside the new memo include a bit more definition on the roles Beats' co-founders Jimmy Iovine and Dr. Dre (real name Andre Young) will have going forward. Unusually, Apple is planning to retain the Beats brand and keep the headphones and other products' distribution deals intact. In addition, Apple plans to continue (rather than shutter) the existing Beats Music apps on rival platforms, making the Android version Apple's first official app for Google's platform. The Windows Phone version will also be retained.
According to the Wall Street Journal, Iovine will leave his current positions as president of Interscope Records and the board of Universal in order to work with Apple full-time, while Young will continue juggling his music career and Apple employment simultaneously. Cook said that the pair will "help Apple expand its editorial and curation teams for music as well as push the iTunes business forward."
Cook has hinted that the company already has plans for Iovine and Young, saying that the pair will focus on adding features to iTunes and other music endeavors "that will blow [customers'] minds" and will take Apple's long emphasis on music "to an even higher level than it is now."
Cook's entire memo is quoted below.
This afternoon we announced that Apple is acquiring Beats Music and Beats Electronics, two fast-growing businesses which complement our product line and will help extend the Apple ecosystem in the future. Bringing our companies together paves the way for amazing developments which our customers will love.
Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.
Apple's history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That's why we have kept investing in music and why we're bringing together these extraordinary teams - so we can continue to create the most innovative music products and services in the world.
Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.
Beats Music was built with deep respect for both artists and fans. We think it's the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.
The Beats Music team will report to Eddy. The teams will be getting to know each other better in the weeks ahead, and we are very excited about the possibilities for the future.
Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple's retail and online stores. We see an incredible opportunity to bring Apple's legendary design and engineering capabilities to these popular products under Phil's leadership.
Please join me in welcoming Beats to Apple. I hope you are as excited as I am about this new chapter in our history.