Beats by Dre – History and Hype
If you were to walk through a mall, or a gym in North America you would see most teenagers and young adults wearing these stylish headphones with a b on the side of them. You’d also find on most teens wish list this product called “Beats By Dre”.
Which is a brand of headphone and speaker that was created by two guys, Jimmy Iovine and the famous Dr Dre (Andre Young) who founded N.W.A along with Ice T, later leaving the group over a dispute with Eazy-E. Dre was smart with the way he played the business game and while in N.W.A Dre perfected his music production which took him way further than his rap career would have.
This business and music mind came from where Dre grew up which was Compton, California which during the 80’s went from a relatively peaceful suburb into a Gang mecca and violence, homicide and crime surged through the area. It was at a point where you would hear gunshots from outside while you were trying to sleep and you’d just try to sleep past it and ignore it.
Compton was an area that had a huge music scene, people had ghetto blasters blaring music all over. Dre quickly became interested in music himself which he says was his only real passion and he knew it was something he was destined to do. Despite his mother’s disapproval who wanted Dre to go to school and forget about music because music isn’t something you make money from. It’s a pipe dream.
“I’ve looked at pictures that my mom has of me, from when I was four years old at the turntable. I’m there, reaching up to play the records. I feel like I was bred to do what I do. I’ve been into music, and listening to music and critiquing it, my whole life.”
Dre tried to go to school like his mom insisted but he didn’t last very long, becoming more and more interested in music and gaining more and more notoriety at a local club called Eve After Dark. Which was a club where local rappers and DJ’s would hang-out. A lot of big names in the rap genre came from here, names such as Public Enemy, LL Cool J and Kurtis Blow. Dre began DJing there under the name “Dr. J”. The club had a small back-room for recording and Dr Dre as well as DJ Yella (also become a member of N.W.A) recorded several demos together. One of which was titled “Surgery” and the chorus had Dr Dre, being “called to surgery”. This tape went onto sell over 50,000 copies in Compton.
Now, coming out of N.W.A Dre gave both his abilities as a rapper and producer a test. Dre joined Suge Knight in DeathRow records and created one of the best hip-hop albums of all time, The Chronic. Then he produced SnoopDawggs album Doggystyle which was the first debut to enter the Billboard 200 charts at number one.
Before leaving Death Row Records, Dre produced 2Pacs hit single “California Love” which was Dre’s first single to top the Billboard Hot 100.
After leaving Death Row, Dre started Aftermath Entertainment. The label did okay in the beginning, with some minor successes here and there but there were no real hits or anyone big signed.
That was until 1998 when recording exec, Jimmy Iovine pointed Dre to a new talent named Eminem. With Jimmy’s track record of finding talented artists such as U2, Bruce Springsteen and Tom Petty, Dre decided to listen and Eminem signed to Aftermath Entertainment.
After signing, Dre and Eminem worked on his first album which became a huge hit, coming in at number 2 on the Billboard 200. In 2001 with CD sales still doing well, Dre sold Aftermath Entertainment to Interscope Records for 52 Million Dollars.
During this transition phase, Dre made some more hit albums but most importantly he was on the look-out for new opportunities.
During this time, music sales were taking a huge hit because of Piracy. Dre was particularly upset because people were not only stealing his music, they were also listening to the music he spends days crafting in the studio only to lose all of that fine work by listening to it on crappy, $1 White Apple Headphones.
“It was crazy to see kids listening to my music on these headphones,” Dre later said in an
interview. “I was like, ‘This is not how it’s supposed to sound. This is not what I spent all this time in the studio for.’ We decided we had to do something about it.”
Dre at the time was playing with the idea of launching a sneaker line, (because when you think of Dre, you think of shoes..) he was hesitant on making this move. He wanted to do something akin to Nike with Jordans but wasn’t sure if sneakers was a good idea.
This is when Jimmy Iovine said “Fuck sneakers. Let’s sell speakers.”
There was another key person in this idea that helped take the idea of selling “speakers” and expanded it, to sell “headphones” which were what kids really wanted.
This person was Noel Lee who is the owner and CEO of an audio and cable company, Monster Inc. Which is a company that has somewhat of an infamous reputation. The reason for this is because of the cables that they sell which are branded as “Monster Cables” aren’t anything special audio wise but sell for a lot more than generic cables because of Monsters branding and marketing.
Monster INC. also has a bad reputation for suing any company, big or small with the name “Monster” in it. They even sued a company over a deer salt block titled “Monster Deer Block”.
The company is generally looked down upon for poor business practices, shoddy product and marketing. Nonetheless, Noel Lee’s interest was piqued when his son Kevin told him that him that he had to team up with Iovine and Dre. Noel didn’t know who Jimmy Iovine was and he thought Dre was done but after some persuasion Kevin convinced Lee to meet with Jimmy and Dre. In this meeting was where Iovine and Dre were convinced to change the business from selling speakers to headphones.
Lee told Jimmy: “Nobody buys speakers anymore, every thing is portable. The kids buy
But why was Lee interested in Dre and Iovine? Two people he originally wrote off as “done”? Monster had it’s own business idea before beats. They needed to find partnerships with other artists for their proprietary audio format. People of the likes of Usher, Mary J Blige and U2. The audio format never saw the light of day but in this process, Kevin met with Jimmy Iovine where he learned of the idea that Dre and Iovine were looking to sell a brand of speakers.
This is where Monster became pivotal in the business because Monster has a huge background in the audio industry, despite being known as rip-off artists their sound quality is really damn good.
So during the meeting, Lee came up with the idea to instead sell headphones which was a market that Monster was looking to enter.
Lee and Iovine immediately clicked business wise, they both knew how sound was supposed to sound and they both knew how to do it.
In another meeting, there was an education session where Iovine and Dre were demoed the sound-tech that Monster was capable of and just how much bass they can pump through a pair of headphones.
According to Lee, the two needed this education badly.
Different from everyone else
So with Monsters help, the rap duo were pointed in the very profitable direction of high – end headphones. Bose was something that old people or your dad listened to and other offers on the market didn’t appeal to a younger generation, they were also quite confusing.
Sennheiser and the other leading “high quality” headphones suppliers were tuning their
headphones to less bass heavy music like classical, rock and jazz. There were very little
offerings that catered to the rap and hip-hop crowd. This is where beats was born. Monster, Dre and Iovine decided to build headphones together.
However, this wasn’t a happily ever after story and that’s largely due to Kevin Lee’s son.
Monster wasn’t as strong in business as Iovine was, who went head-to-head with Steve Jobs and ran a music empire.
Monster saw success with using Dre’s contracts in sports and entertainment to get their own name out there and catapult their business to success but in the process, ended up getting eaten and then spit out by Dre & Iovine. The reason for this was because Kevin Lee, did a lot of things behind his fathers back and put himself into a position where he had to make a deal with Dre and Iovine.
It started out with Kevin’s lack of skill with business, having just received his bachelors degree with little experience negotiating actual deals. When he went up against the heavy hands (and pockets) of Interscope, he found himself in a bad position. Iovine wanted a certain set of numbers that Monster couldn’t provide. Monster couldn’t make a living off of the deal that was offered and the negotiation was at a stand-still.
Eventually Iovine and Dre left the deal and Monster. Six months later, Steve Burman (Interscopes Marketing President) contacted Monster after a failed negotiation with another audio company. He wondered if Monster was still interested?
Of course they were.
It wasn’t this simple though, by this time the term Beats By Dre had already been made and the competitor audio company already designed the first prototype Beats By Dre, which the company still uses as a base model to this day.
Kevin got a little too heavy handed and started investing money into Beats By Dre by developing headphone prototypes behind is fathers back and before a contract was even signed. There was rumoured a few million dollars of Monsters money spent on this development.
This heavy handedness played into Iovine and Dre’s favour because there was no way the deal could not go through. If the deal failed, Kevin would be in hot water financially and with his family (mainly his dad, Noel Lee). There was no “maybe” the only answer was yes and Kevin had to put up with a gigantic forfeit.
There was a contract put together and Interscope called it the most complicated contract that they’ve ever seen.
The fatal flaw for Monster lied within the contract, Beats retained ownership of everything Monster developed. Everything. It was all surrendered to Beats By Dre.
This was a terrific deal for Dre and Iovine because it allowed them to essentially leave Monster behind with very few consequences. There were also many holes in the contract that Beats By Dre leveraged.
Dr Dre tested hundreds of demos developed with the famous rap song by 50 Cent “In Da Club”, this was the song that set the standard by which the headphones were judged.
Lee was actually unhappy with the bass of the beats, thinking that it had been turned up too high but this worry was laid to rest when he told Will.I.Am and Will’s response was;
“Don’t change it. You’ve got magic.”
Once the product had been developed and the team liked what they had come up with, they now had to figure out how to get the product into stores and into the hands of the American public which was mainly teenagers and young adults.
There were a few problems the product had to overcome though, the first was that Beats were developed in a recession. Many retailers thought no one would buy the 300 dollar headphones.
They also were questioning whether an aging rap star had enough power and influence to get product off the shelf. This is where Noel Lee went to work on Best Buy’s chief executive Brian Dunn and tried to convince him that Beats weren’t just a product in a category but rather a whole new category themselves.
It didn’t take long for the company executive after listening to Beats once, to realize that he had something here and that this was a great opportunity.
Dre told Dunn that people pay a lot of money for Nike’s and they’re going to pay a lot of money for great headphones, they just have to sound great and have some form of edge to them.
Best Buy went onboard with Beats and became the first retailer to stock the product. However, before the product could really take off the staff had to be educated.
These weren’t just any headphone.
They weren’t just audiophile headphones.
They weren’t Bose or Sennheiser’s.
They were Beats.
The consideration is; “Do I buy the Nike Air Jordans? Or the Beats?” The marketing for the product was relatively simple, give every Interscope the product to wear in music videos and other media. Have special lines for really popular artists like Justin Bieber’s JustBeats and Lady Gaga’s GagaHeart Beats.
Professional athletes like Lebron James were also given the product to wear and promote. The fact that all of these “stars” and celebrities were wearing the product and being shown to young adults and teenagers alike, caused the headphones to move fast off the shelves despite their hefty price-tag.
Beats were considered “Cool” and Dre stressed a lot to keep them that way. Everything from the commercials to the fonts used on the product. He wanted to keep anything corny out of the product line or else his audience would lose interest. He wanted them to be cool, without saying it.
Beats became the Nike of headphones. They weren’t just bought to sound good but they looked cool, they were a fashion statement themselves. Suddenly, it was cool to have headphones around the neck, not attached to anything. They were a fashion accessory and apart of a lifestyle.
Eventually, Beats realized that they didn’t need Monster anymore and cut them out of the deal which was easy to do because of the sloppy contract that Kevin originally put together. With Monster out, Beats soldiered on and in 2014, Beats was sold to Apple for a staggering 3 Billion.
Now, in 2018 Beats are copied by many headphone manufactures but the originals are still a fashion accessory and nearly every teenager and young adult that’s into rap and hip-hop have them.
They really have become the Nike Air Jordan’s of the headphone world.
Hype or the real deal?
But the big question that everyone has, is the product as good sound wise as it’s touted? Is it all hype?
According to audiophiles, the bass is too loud and too low quality. Drowning out the trebles and highs in the process. There’s also better headphones out there for less money that deliver better bass but they aren’t marketed nearly as well as Beats.
People who understand sound and are audiophiles will say that the sound quality is bad, even terrible but many consumers think they sound pretty good.
Which I think is true, because if you think about it few people have decent headphones. Most are used to listening to music through the free iPod headphones or cheap 20 dollar earbuds.
Even true headphone users usually cheap out and buy the 20 dollar ones. So if you compare Beats to these, they’re obviously better but there are better headphones with more bass and less money on the market but they aren’t marketed as well as Beats are.
It makes sense why Beats took off the way they did.
Hip-hop and rap have always been genres of music that were considered “cool”, rap was cool in the 80’s and it’s cool now. Rappers look cool, act cool and even talk cool with the different slang they have and use.
So when you take someone like a rapper or hip-hop artist that has a massive influence over the youth and tell them to promote a product, it’s no surprise why the headphones sold so well.
Youth wanted to look like the rappers, they wanted to be cool so when they saw these
headphones on them they immediately thought they looked cool and wanted a pair.
It also helped that Dr Dre has a great sense of style and designed the headphones so they
actually were cool, by themselves without anyone famous wearing them.
Beats are a product that was the result of terrific marketing and advertising from Jimmy Iovine combined with great insight from guys like Noel Lee and the soft touch of Dr Dre.