Apple buyout of Beats Electronics: $ 500 million for Beats Music
This is the most expensive buyout in Apple’s history: $ 3 billion to acquire Beats Electronics, the company of Jimmy Iovine and Dr Dre, famous for its headphone branch.
Founded in 2008 by Jimmy Iovine, director ofat the record company Interscope Geffen A&M (IGA), and rapper Dr Dre have therefore joined the fold of Apple. The Wall Steet Journal estimates that Beats Music, the streaming music service launched last January, would only weigh 500 million dollars in the transaction, of which 2.6 billion is known to have been paid directly. In 2013, the company’s revenue of $ 1.3 billion came from the sale of the brand’s headphones, earphones and speakers alone.
Apple, which has seen its sales drop slightly on iTunes, no doubt sees the streaming site as a development opportunity. Tim Cook declared a few days ago that it was the “first good streaming service”, dismissing Spotify or Deezer at the same time.
With its catalog of 20 million titles, Beats Music claims 250,000 members in 5 months of existence. Far behind the market juggernaut, Spotify and its 10 million subscribers estimated at $ 4 billion since its last fundraising in November 2013 ($ 250 million, a valuation of $ 400 per subscriber). With this buyout, Apple values Beats Music at $ 100 million.
For Apple, Beats is above all a matter of association: two very popular stars. Jimmy Iovine and Dr Dre, this is priceless!