Apple Inc 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.
WireImage
Beats By Dr. Dre headphones.
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, 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.
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, one of the sources said.
Other
players reportedly looking at expanding into music-streaming -- whether
fee-based or by paid subscription -- include Google Inc and Amazon.com
Inc.
Iovine, a music producer and "mentor" to contestants on Fox's
"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.
Daisy,
Beats Electronics LLC's recently acquired and renamed digital music
service, has garnered $60 million in new capital, a move that reflects
both the upheaval among musical streams and their continued
seductiveness.
