How Beats took over the world
4:01

How Beats took over the world

Headphones
Just a few short years ago, Beats was a single pair of headphones. Today, it's a music empire that Apple paid 3 billion dollars to be part of. Here's how Beats took control of the tech world. [MUSIC] [NOISE] Among tech fans, Beats is infamous. Audio files arguably these colorful cams are overpriced or of a subpar sound quality. And yet the brand has grown to be a major part of the technology world. Beats is the cheapest by making extremely smart moves through its history. Right back to the company's formal creation in 2008. Beats began as a joint venture between rapper-producer Dr. Dre and Interscope Records co-founder Jimmy Iovine, and audio firm Monster Cables. Beats' first masterstroke was brilliant marketing. Jimmy and Dre didn't waste time talking about frequency response or impedance, but leaned on Interscope's roster to get Beats products onto famous ears. And into music videos. Also creating artist branded Beats variants. To all my fans out there, thank you so much. And, go get the Justbeats. You might think this was cheating, but Beats they did was spot a gap in the market, products for people who would never have considered spending $300 on headphones. Plus it gave me the courage to launch my own line of endorsed technology. [MUSIC] Beats was ahead and it wasn't long before Rivals started churning out similar projects. By this point however, the company was already one step ahead. Beats Next move was to expand beyond headphones. Something that began in earnest as early as October 2009. An HP tie up saw Beats audio arrive on consumer laptops. Later in August 2011, HTC sought to benefit from Beats booming popularity, paying $300 million for a majority stake in the company and the rights to put Beats audio into smartphones. A year later Dre and Iovine bought half of HTC's stake back, ditched Monster. And, boosted its sale levels by handing out headphones to athletes at the London Olympics despite not being an official sponsor. Prompting stern words by organizers. Of course, knowing that the forbidden just made Beats seem even cooler some people are just born to break the rules. Over Christmas 2012 nearly 70% of all premium headphones sold in the U.S. were Beats branded. While the headphone market itself grew into a 2.4 billion dollar industry. Underpinning Beats success was the fact that it was wildly trendy, but by their nature trends don't last. The final masterstroke is [UNKNOWN] in place that keeps business moving forward, even once the novelty has worn off. In 2012, Beats had bought music streaming service [UNKNOWN] while quietly working on a project called Daisy that promised. Proved music discovery algorithms. Morgan Daisy together in Beats Music, launched in January 2014 and this service is thought to be a big part of what attracted Apple, which confirmed in May it had paid three billion dollars for beats, following weeks of speculation. With the Apple fail, Beats has effectively won, in just a few years, spinning that single pair of headphones into a music empire that's both vast, and hugely financially rewarding. The story is essentially one of capitalism firing on all cylinders. But if there's something that Beats has brought to the world of tech, maybe it's the realization that music isn't just about audio reproduction. It's a cultural thing, tied to fashion, showboating, and sharing. Beats capitalized on that idea and to the victor go the spoils. [INAUDIBLE] The first billionaire in hip-hop. What do you think of these? Do you love them or hate them? Let me know and check back next time for another adventure in tech.

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