Beats By Dre Origins & Success

Headphones are practically considered fashion accessories these days. Many attribute that change to Monster for the BBD brand. But the company’s always been admired for its wiring and cable accessories. What made Monster venture into the headphone market?

Noel: I gotta give some credit for the inspiration to Dre and Jimmy [Iovine]. We’d been thinking about headphones because we felt it was the next thing and speakers were not selling anymore. And we had done speakers, but nobody wanted big speakers in there homes. Wives wouldn’t accept them. As a passionate audiophile, that’s the way to go, but the practicality of making a business out of it wasn’t working. When Jimmy and Dre came to us and said they wanted to make speakers, we said you don’t want to make speakers because nobody really buys them anymore. They said “what do you mean nobody buys speakers anymore?” Really…nobody buys them. They had never thought a headphone could be a serious music reproduction instrument. They never thought that a pair of headphones could sound as a good as a pair of speakers.

 
When Jimmy and Dre came to us and said they wanted to make speakers, we said you don’t want to make speakers because nobody really buys them anymore. They said “what do you mean nobody buys speakers anymore?” They never thought that a pair of headphones could sound as a good as a pair of speakers.—Noel
 

It’s interesting to hear you say that because at all these BBD events, we usually hear Jimmy sharing the story of him and Dre getting into the headphone business. He mentions how Dre came to him saying he was interested in pushing sneakers and talks about how he told him, “Fuck sneakers. Sell headphones.” To clarify things up, would you say it was Monster that originally brought the idea of creating headphones to the table?

Noel: I don’t want to contradict Jimmy’s story. But let’s say we all came to that conclusion together because the actuality is in our first CES show, we said in our headphone booth, this is the new loudspeaker. In fact, that was our tagline: Headphones are the new loudspeaker.

Fair enough. The BBD brand is looked upon as the urban, consumer-centric product. Since most of the artists attached to it are pop and hip-hop stars, with the upcoming Earth, Wind & Fire headphone line under the Monster umbrella: Why not create an exclusive BBD pair for the legends?

Noel: First of all, music is not one-dimensional. I think what we did with Jimmy and Dre with the whole Beats brand, we defined a customer base. Urban and young kids who were taught there is music quality that they’ve never heard before. And with our venture with Earth, Wind & Fire, Gratitude, we’re targeting an audience that has big speakers, who’s experienced great audio. It’s not the first time they’ve heard great music. So bringing something to that audience is almost the antithesis of what we did with Dre. Here, yes we’re bringing it to a different audience, more musically aware and maybe had high-end speakers in the past, and now they’re experiencing it audibly.

Would you consider BBD the biggest project the two of you have collaborated on?

Noel: Oh, absolutely. And we couldn’t of done it without Jimmy and Dre. To blow up as big as it has become you needed a three-way collaboration. You needed us as the designer of the technology and engineering, the retailer who is willing to take a chance, that was Best Buy and Apple, and the marketing horsepower of Jimmy and Dre to make it part of pop culture. We’re the first ones. Nobody else could have done it. Maybe Sony could have done it because they had the music company and the electronics. It wouldn’t have come out good because Sony is not a culture thing. Although they could have done it, they couldn’t have done it.

The Future of Audio & Headphones

The two of you are at the top of the audio echelon. Where do we see both platforms go from here?

Noel: With Kevin, the fact that we scratched the surface because the headphone is at the end of the chain right now. When people start hearing content with great speakers or headphones, they’ll start to hear the imperfections. So the fact that headphones have gotten better, [it] allows one to hear the imperfections of content. So I see actually two things in the future: One people will have a greater appreciation for a lot less content. They’ll strive for uncompressed audio, and we see people doing significant work like that now—making that available to consumers. That’ll be the next big boom on the content side. But the headphones side, there’s still thousands of people that still don’t know about quality headphones than the ones that do.

The second side is the availability of the players. So you have 250 million iPods, but you have over a billion smartphones. So as soon as the smartphone becomes enabled with music, like HTC did with Beats, like we’re doing with Nokia, which will be introduced next year, now that’s just quadrupled the amount of media players out there. Most smartphones have the ability to play music, except people didn’t know about it. If you didn’t have an iPhone, you weren’t playing music off your BlackBerry. But now with the availability of Pandora, Spotfiy, and other music services, you’ve quadrupled the amount of players. So what does that say about the future of headphones? It’s massive.

Tablets is another thing, the availability of tablets and using that as a media player, now if we’re to look at the last 10 years of the generation of flat-screen TVs, the future generation is going to be the phone. That’s going to be your flatscreen. That’s where you’re going to watch your movies, YouTube, and music content. You’re not going to carry around a big music system with you. So that’s why headphones are so important.

 
I see two things in the future. One: people will have a greater appreciation for a lot less content. They’ll strive for uncompressed audio, and we see people doing significant work like that now—making that available to consumers.—Noel
 

Kevin: Even with our success thus far, we have yet to touch the total market we want to address. To get that I think it’s more different flavors and different people. Different aesthetics, sound, form factors, price points—it’s everything. I would expect that in the future, everyone has a headphone that sounds good, relatively speaking. And everyone has one that speaks to them, whether it’s in terms of fashion or functionality. But I also expect in the end that getting a headphone into consumers’ hands you still have the limitation of distribution.

There’s only so much space a retailer can put in front of a consumer. So while everyone is jumping into it, I think everyone will try and copy the formula, and you’re already starting to see that. What they don’t realize yet is that it’s not just a formula. A formula changes instantly. The other thing is consumers are so smart these days that they’re willing to pay more for something they feel is the real deal. And so authenticity is what I think is going to be the filter that cleans out everyone trying to copy.

Jimmy and Dre, authentically had a lot to do with it. My dad, authentically cares about music, has a passion for sound, and the nearest engineering innovation. I’m like my dad, so I’m the same way. I would expect companies like Monster or SOL to be the ones that succeed because it’s not just one thing: it’s marketing, authenticity, product innovation, distribution, and all of that coming together.

OK. How about functionality? Monster just introduced the Beats Bluetooth wireless headphones. Is that the new wave of enhanced audio sound?

Noel: There’s so much more to do though. We’ve accomplished a lot in a very short period of time. Wireless is the next wave. In fact, it’s one of our best selling products. And that’s because people don’t want to deal with wires. But they never knew how not to deal with wires cause everything that was wireless sounded bad. So we’re the first to really do a Bluetooth wireless headphone. I’m not gonna say it sounds like a wired headphone yet, but it sounds good enough to where people are really impressed with the sound.

We’re sure it’s extremely difficult to produce great sound quality via Bluetooth, especially since the technology hasn’t been perfected.

Noel: It’s not. So we have to make allowances for that technology to cater towards Bluetooth technology. Bluetooth hasn’t changed appreciably the past few years. Having to work with it and make it sound good, it’s taken a long time. So we’ve been working with it for two years. But it’s changing and going to change next year. And it’s gonna be better in sound quality than it is today. All the basic fundamentals of making Bluetooth sound good will become easier. We’ve come to a point where with Beats wireless people say they’ve never heard a wireless headphone sound this good.

Seeing how SOL headphones are open to limitless customizations with the removable headband and ear cups, when you really think about it, that fits perfect within the concept of wireless headsets. Would you see the company releasing a wireless pair in the near future?

Kevin: The goal of SOL Republic is to bring good sound at a more accessible price point. I think the higher the technology, like wireless, that requires batteries, built-in amplifiers, and the connectivity will probably not make that the right thing for SOL. You’ll see it in the Beats line and the Monster brand, but probably not in the SOL line.

What should we expect from Monster at CES and the near future?

Noel: I don’t think I’m gonna be able to tell you everything today, maybe next year at CES when we begin to unveil it. But like I’ve been saying like the sports category has been untouched. So with the new Monster iSport headphones, everyone says, “hey, headphones keep falling out of my ear.” Not with our headphones. Other stuff being asked is what happens when you sweat in them and the headphones get shorted, or if they’re destroyed—these are lifestyle kind of features. So that’s what we’re working on. How to make it smaller, lighter, more battery efficient, and waterproof, also how do you make in-ear headphones wireless.

Safe to say both Monster and SOL Republic will be in attendance at CES 2012?

Kevin: We won’t have a booth at CES. We can’t afford it [laughs]. I’ll still be there because I still have a job at Monster. The team will be there having meetings.

Noel: Well, been there and done that [laughs].

Did it ever come to mind to ask your pops if he had any space near the Monster table to showcase your products?

KL: Well, that’s how you started dad. If I asked, I’d be bad karma to say no [laughs]. Nah, my dad and I decided that this whole thing about keeping the new business completely separate lives on its own. 

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