|Jimmy Iovine, Tim Cook, Dr. Dre, the rapper, and Eddy Cue of Apple, Cupertino, May 28, 2014 |
Apple announced Wednesday that has agreed to
acquire the critically acclaimed subscription streaming music service Beats
Music, and Beats Electronics, which makes the popular Beats headphones, speakers
and audio software. As part of the acquisition, Beats co-founders Jimmy Iovine
and Dr. Dre will join Apple. Apple is acquiring the two companies for a total of
$3bn, consisting of a purchase price of approximately $2.6bn and approximately
$400m that will vest over time - -
the international operations of Beats are owned by a mailbox Irish offshore
holding company that is tax-resident in Jersey, the Channel Islands.
“Music is such an important part of all of our
lives and holds a special place within our hearts at Apple,” said
Tim Cook, Apple’s CEO. “That’s why we have kept
investing in music and are bringing together these extraordinary teams so we can
continue to create the most innovative music products and services in the
“I’ve always known in my heart that Beats belonged with Apple,” said
Jimmy Iovine. “The idea when we started the
company was inspired by Apple’s unmatched ability to marry culture and
technology. Apple’s deep commitment to music fans, artists, songwriters and the
music industry is something special.”
Apple said Iovine has been at the forefront of innovation in the music industry
for decades, and he has been an instrumental partner for Apple and iTunes for
more than a decade. He has produced or collaborated with some of the most
successful artists in the history of the iTunes Store, helping make it the
world’s number one music retailer. Iovine and Dr. Dre are sound pioneers,
artists and entrepreneurs.
The electronics giant said Beats Electronics has brought the energy, emotion and
excitement of playback in the recording studio back to the listening experience
and has introduced an entirely new generation to premium sound entertainment.
Beats Music was developed by a team of people who have each spent their entire
career in music and provides music fans with an incredible curated listening
The Wall Street Journal says US sales of single
downloads slid 6% to 1.3bn tracks last year, while album downloads were flat at
118m. Pandora's free, ad-supported service has more than 70m active users and it
had 3.3m paying subscribers in March. Spotify, which entered the U.S. in 2011,
now counts 10m paying subscribers world-wide.
Apple launched its own free music-streaming service, iTunes Radio, last
September. It counts 40m US users, but has yet to make much of a competitive
dent. Beats started its $9.99-per-month subscription music-streaming service in
January and has 250,000 paying subscribers so far, according to Apple.