The web has spun about 13,000 different theories on why Apple bought Beats. Did they want the headphones? Or was it Beats Music that tipped things over?
It’ll be months, if not years, before we learn Apple’s real play with the Beats acquisition, but Steve Jobs’ biographer Walter Isaacson has his own theory on why Apple bought Beats and it has nothing to do with music, overpriced headphones, or other wearables.
It’s all about video.
Speaking to Dan Lyons at Billboard, Walter Isaacson says that back in 2003, after playing a key role in persuading the top five music labels to hop on the iTunes train, Jimmy Iovine told Steve Jobs that he should purchase Universal Music Group. It never happened, but the repercussions would have been huge giving Apple total access to the largest music corporation in the world.
Iovine’s connection to media industry make him one of the few persons capable of getting the biggest names in the business to come together, which according to Walter Isaacson, makes him the perfect person to get Apple’s new TV content deals arranged:
“Isaacson thinks the Apple-Beats deal is not about headphones or streaming music but rather is about video. He speculates that Cook wants Iovine to run Apple’s content business and help Apple launch the TV product that analysts have been gossiping about for years.”
Apple has been rumored to be working on an update for the Apple TV for years, with some rumors claiming the set-top box would come with a revamped UI to make use of the new content deals Apple is trying to secure with networks. Eddie Cue is supposedly leading the negotiations but nothing has materialized over the last few years as networks are reluctant to ditch their traditional business model. Perhaps Iovine’s charisma and connections with the networks would allow him to do to video what he facilitated with music over ten years ago.
Beyond the iTunes deal, Iovine also helped Apple make a deal with U2 for the special (RED) iPod classic. Negotiations for video licenses are admittedly more complex than music, says Isaacson, but Iovine’s proven record of success at wrapping content with tech could make him the biggest steal of the $3.2 billion deal.