Article details messy Beats by Dre-Monster split | iLounge News

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Article details messy Beats by Dre-Monster split

Complete with quotes and previously confidential images provided by Monster, a new article at Gizmodo paints a surprisingly negative picture of Monster’s relationship with Beats Electronics, discussing how Monster lost virtually everything it had built when Beats left for HTC. Interviews with Monster CEO Noel Lee and his son Kevin Lee detail how Monster and Beats formed a shaky business arrangement, wherein the Beats side retained ownership of everything Monster developed. According to the report, Monster also footed the bills for manufacturing and distributing the products. While Beats contradicted Monster’s claims of handling industrial and audio designs for the headphones, Monster offered audio engineering and industrial mockups, and Noel Lee claimed Beats had nothing to do with engineering: “Absolutely not, they don’t have any engineers.”

The article also acknowledges that Beats’ success came from astute marketing — not from the sound — and that the products were both overpriced and hugely profitable. Kevin Lee suggested that Beats were marketed as “the hottest product to have, and sound will be a Trojan horse. And that’s what we did. Beats was in every single music video.” Notably, iLounge’s reviews never gave Beats products higher than a flat B rating, with most falling below that, often citing unimpressive performance to price ratios as a key issue.

When Beats Electronics left Monster for a partnership with HTC, Monster was paid only a small amount—“more severance payment than cash-out”—while Beats retained the audio, patents, designs, and the name. The article notes that Beats made $519 million in sales during its first year with HTC — up from $219 million in the previous year — taking control of 64 percent of the $100 and higher “premium” headphone market.

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Comments

1

Great article by Gizmodo.  I almost feel bad for Monster but I find it hard to find sympathy for millionaire’s arguing over money.  At the end of the day it’s a lesson learned by Monster and a cautionary tale for business people everywhere…

Posted by Jinkazama on February 7, 2013 at 8:01 PM (CST)

2

That is a good read on Gizmodo!  Oh the irony here!  One guy on a forum put it very nicely in “Predatory snake-oil salesman gets stiffed by guy who engineered some of the worst records ever!”.  I really have no sympathy for Monster Cable.  This is the same outfit that faked test results, tried to sue other businesses/people that used the work “Monster” in their business or product name, threatened to sue other businesses in bogus patent claims (BlueJean Cables comes to mind), and sells overpriced cables with dubious claims.  I’ve actually checked out some of these Beats headphones, and frankly, I am not the least bit impressed.  I found I would rather much get headphones from actual, respectable companies that actually know sounds, such as Sennheiser, Klipsch, Grado, and so forth.  I seriously wonder what a bunch of rap “artists” would now about good sound.  We are talking about a “music” genre that, personally, I don’t find to be very musical.  Just throw down some beats with rhymes.  Where is the actual “music” in that?  I will admit that I am somewhat biased in my opinion in that I absolutely LOATHE rap and hip-hop.  Still from somebody that is pretty much on the outside looking in, I find those Beats headphones (like much of the whole “hip-hop” scene) to be all looks and no substance.  So yeah, I actually got a kick out of reading that.  It is not like anybody actually lost money here, just Monster did not do a good job to protect themselves better and lost out what could have been an even bigger payout.

Posted by SkiBumMSP on February 8, 2013 at 7:21 PM (CST)

3

^^ this guy^^ absolute nonsense in referring to rap and hip hop. You must be a old white guy

Posted by Vinnie on February 20, 2013 at 1:10 AM (CST)

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