Dr. Dre lost $200 million by leaking Apple Beats deal early
Dr. Dre famously leaked the deal that would lead to Apple's acquisition of Beats -- and a new book shows how the premature celebration cost the rapper $200 million and almost put an end to the deal.
Tripp Mickle's new book (via iMore) explores how an untimely celebration reduced the payout to Dr. Dre and Beats staff in the $3 billion acquisition in 2014.
Chapter 10 of "After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul," describes Apple's entry into music streaming in the early 2010s.
After some tough convincing work, Jimmy Iovine, a Beats executive and longtime friend of the artist and entrepreneur Dr. Dre, managed to get Apple CEO Tim Cook on board with buying Beats Music and Beats Electronics.
Despite resistance from Apple's internal staff, the company agreed to a price that was initially well north of $3 billion.
Iovine told his team at Beats to maintain absolute radio silence over the deal to avoid the possibility of Apple pulling out.
The following day, Iovine received a call from fellow artist Puff Daddy alerting him of a video posted to fellow musician Tyrese Gibson's Facebook. The video showed Dr. Dre prematurely celebrating the deal, calling himself the "first billionaire in hip hop."
When news of the video reached Cook, both Iovine and Dr. Dre were summoned to Apple headquarters. Cook was reportedly disappointed but remained calm and reassured the pair that the resolve for Apple to acquire Beats did not change.
Mickle notes that if it were Steve Jobs at the helm, it's unlikely that he would have handled the situation nearly as well.
However, Cook used the leak as leverage to shave $200 million off of the acquisition price. This had the effect of leaving Dr. Dre shy of the $1 billion in net worth after the deal was complete.
Apple purchased Beats Music and Beats Electronics in 2014, which turned into Apple Music, the Beats 1 radio station, and various Beats products with AirPlay support with Lightning connector charging under the banner of the Cupertino tech company.
Read on AppleInsider
Tripp Mickle's new book (via iMore) explores how an untimely celebration reduced the payout to Dr. Dre and Beats staff in the $3 billion acquisition in 2014.
Chapter 10 of "After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul," describes Apple's entry into music streaming in the early 2010s.
After some tough convincing work, Jimmy Iovine, a Beats executive and longtime friend of the artist and entrepreneur Dr. Dre, managed to get Apple CEO Tim Cook on board with buying Beats Music and Beats Electronics.
Despite resistance from Apple's internal staff, the company agreed to a price that was initially well north of $3 billion.
Iovine told his team at Beats to maintain absolute radio silence over the deal to avoid the possibility of Apple pulling out.
The following day, Iovine received a call from fellow artist Puff Daddy alerting him of a video posted to fellow musician Tyrese Gibson's Facebook. The video showed Dr. Dre prematurely celebrating the deal, calling himself the "first billionaire in hip hop."
When news of the video reached Cook, both Iovine and Dr. Dre were summoned to Apple headquarters. Cook was reportedly disappointed but remained calm and reassured the pair that the resolve for Apple to acquire Beats did not change.
Mickle notes that if it were Steve Jobs at the helm, it's unlikely that he would have handled the situation nearly as well.
However, Cook used the leak as leverage to shave $200 million off of the acquisition price. This had the effect of leaving Dr. Dre shy of the $1 billion in net worth after the deal was complete.
Apple purchased Beats Music and Beats Electronics in 2014, which turned into Apple Music, the Beats 1 radio station, and various Beats products with AirPlay support with Lightning connector charging under the banner of the Cupertino tech company.
Read on AppleInsider
Comments
"Losing" Beats hardware, IP, and brand would have been no loss whatsoever, or at least lost among Tim's pocket lint. Apple makes far more money off their line of AirPods than the Beats stuff could ever earn.
Tech Apple acquired to get into this culture:
Mac
iPod
iPhone
iPad
Apple Watch
…oh wait.
After the Beats acquisition, Apple Music was a steaming mess. It was very. difficult to use and did not have Apple's typical UX flow. Once Apple got back to its usual way of doing things, Apple Music became pretty great.
Lovine seemed like a big talker, but I could not figure what he actually brought to Apple. "Dr. Dre" obviously brought a following, name value and mixing ability. I believe the music curation algorithm was a good value. but neither guy seemed to be a great choice for Apple leadership.
In the end, Apple got some headphone branding that it uses to compete with its own AirPods. Not sure that was. worthy 3 billion. But. then again, working through the difficulties of expanding the music business did lead Apple to eventually get it right.
It still boggles how Spotify is so much more user-friendly though. You'd think it was an Apple product.