EXCLUSIVE - Apple's Cook, music mogul Iovine discuss new music service

SAN FRANCISCO/LOS ANGELES Wed Mar 6, 2013 12:47pm IST

Apple Inc. CEO Tim Cook takes the stage during Apple Inc.'s iPhone media event in San Francisco, California September 12, 2012. REUTERS/Beck Diefenbac/Files

Apple Inc. CEO Tim Cook takes the stage during Apple Inc.'s iPhone media event in San Francisco, California September 12, 2012.

Credit: Reuters/Beck Diefenbac/Files

Related Topics

Stocks

   

SAN FRANCISCO/LOS ANGELES (Reuters) - Apple Inc(AAPL.O) has held talks with Beats Electronics LLC, the audio technology firm co-founded by influential hip-hop producer Dr Dre and music mogul Jimmy Iovine, on a potential partnership involving Beats' planned music-streaming service, three people familiar with the situation told Reuters.

Apple Chief Executive Tim Cook met with Beats CEO Jimmy Iovine during a visit to Los Angeles in late February to find out more about Beats' "Project Daisy", a music subscription service the company announced in January but with scant detail, the sources said.

Apple's Internet products chief Eddy Cue, a key player in setting up its iTunes Music Store, also joined the meeting, at which Cook expressed interest in Daisy's business model and its rollout plans, although the two did not discuss specifics of a deal, the sources said.

The meeting between Cook and Iovine, who is also chairman of music company Interscope-Geffen-A&M, was "informational" and covered a broad range of music-related topics, the sources said.

Apple spokesman Tom Neumayr and Beats declined to comment.

The iPhone maker has been widely reported to be considering a music-streaming service to complement iTunes, the largest repository of music for sale.

Beats, known for its stylistic, distinctive headphones, has a partnership with Taiwanese handset maker HTC Corp (2498.TW), an Apple rival.

In a boost for the company, Beats said on Tuesday it had secured $60 million in funding for Daisy from a group of investors including Warner Music owner Len Blavatnik, Fort Worth billionaire Lee M. Bass, and Australian financier James Packer. The funding will bankroll the music service's launch in late 2013.

Beats reportedly named the project "Daisy" in honor of what it called the first digital, computerized song. At the time, it said in a press release that the service would "bring an emotional connection back to the act of music discovery," referring to the process through which users find, buy and consume music.

HUNGRY FOR GROWTH

The music recording industry has languished through more than a decade of declining revenues and sputtering growth. Industry sources say many of the largest companies are beginning to warm to the idea of collecting fees on music streamed over the Internet, as the use of smartphones and tablets explodes around the world.

It remains a nascent market, dwarfed by music sales via outlets such as iTunes, but one that is attracting investment.

The meeting between Apple and Iovine was set up in January, immediately after Beats announced Daisy without explaining the upcoming project's business model or how it plans to differentiate itself from existing services such as Spotify and Pandora (P.N), one of the sources said.

Other players reportedly looking at expanding into music-streaming -- whether fee-based or by paid subscription -- include Google Inc (GOOG.O) and Amazon.com Inc (AMZN.O).

Iovine, a music producer and "mentor" to contestants on Fox's (NWSA.O) "American Idol" show, has a long association with Apple and was one of the first music industry executives to sign onto what was then Apple's nascent iTunes initiative, announced in 2001.

In a January interview with technology website AllThingsD, Iovine said he subsequently pitched a subscription service to Apple's late co-founder Steve Jobs in 2003, but the mercurial Silicon Valley icon was not keen on it right away.

Iovine said Jobs didn't want to pay the record companies enough, and thought the price would come down eventually. (Reporting by Poornima Gupta and Ronald Grover; Editing by Edwin Chan and Edwina Gibbs)

FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage