Apple Inc. (NASDAQ:AAPL) may offer Beat co-founders Jimmy Lovine and Dr. Dre high positions if the iPhone maker acquires the music company. A report from The Wall Street Journal, which cites sources aware of the matter, says that both Beat executives will take senior positions if the $3.2 billion deal, which is in its final stages, concludes.
No clarity over the roles
There is no confirmation about Lovine’s and Andre Young’s (popularly known as Dr. Dre) roles except a source who claims that Lovine would vacate his chairman seat at record label Interscope Geffen A&M for the opportunity. Beat and Universal Music are still under contract, and Universal Music holds 14% stake in Beats. However, Lovine will reportedly be allowed to resign if the deal is finalized.
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Lovine was rumored to become “special adviser” to Apple Inc. (NASDAQ:AAPL) CEO Tim Cook, but there was no detail regarding Young’s role in the process. It is widely expected that Lovine will come in the company under an “acqui-hire” agreement that could feasibly be extended to Young as well.
How deal benefits Apple
The deal is not very reasonable from the point of view of many market watchers and analysts, but there are some substantial benefits for both parties in the deal. Beat is a relatively known brand in audio hardware products and has launched a successful music streaming service. Those familiar with the deal reportedly told media that the deal with Beats Music and the Beats management team could be a significant part of future content negotiations.
Previously, Lovine stated that he was very close to the late Steve Jobs, Apple Inc. (NASDAQ:AAPL)’s co-founder, but that he was never involved in the company in anyway. Current CEO Tim Cook might be planning to have Lovine and Young on board for creative benefits. Apple is known to acquire companies primarily for their technology and ideas and hardly for their branding.
Though Apple Inc. (NASDAQ:AAPL)’s iTunes is one of the most profitable stores on the planet, it is suffering from sparse presence in the growing markets of streaming music and music subscription services. Other streaming services like Spotify and Pandora have built a loyal fan base compared to bigger names. If Apple acquires Beats Music, the company would be able to open up more new revenue streams. Apple could also offer ad-supported free music.