WWDC ’14 and the Beats Deal — What Wasn’t Said

Despite that so much time was spent bragging about a web browser and translucent windows (hooray for pngs!), and despite that a big applause break came when they announced they were going to start allowing videos in the app store, this year Apple’s developer event was a good one, and incredibly revealing, to boot. Not because of what was said, necessarily, but because of what was left unsaid.

First, what was said: this year, the predominant theme was Continuity—allowing tighter integration between platforms and devices via something they’re calling “Handoff.” In short, our iOS devices are going to be more tightly linked with our Apple desktop and laptop devices, such that we’ll be able to take phone calls on our Macs, or set the Mac aside and seamlessly pick up the same activity on another platform right where we left off, with no significant break in the action. Most excited by this, I’m assuming, are users like myself with small children at home (generally unpredictable creatures with a predilection for destructive behavior requiring ones immediate attention). Additionally, Apple promises greater integration among 3rd party iOS apps, with one app being finally able to affect another app’s behavior.

But when we consider what Apple didn’t say, things really get interesting. Case in point: despite that Apple Senior Vice President and possessor of world-class hair, Craig Federighi, called Dr. Dre on the phone, ostensibly to congratulate him and to discuss how Apple’s purchase of Beats would affect the company and the world at large, the conversation instead focused on the fact Federighi was calling from his Mac via his iPhone, and from there quickly devolved into a series of canned, sub-par jokes (at least Federighi didn’t ask what Dre was drinking). The call lasted just shy of a minute.

The reason Apple bought Beats is not because “teenagers actually love Beats headphones,” (though they’re undoubtedly better than Apple’s), nor because Dr. Dre is “a cultural tastemaker” who’s “got fashion and culture completely locked up.” And it’s certainly not because “music is dying.”

The reason is simple. What’s dying isn’t music, but mp3s. Soon to go the way of CDs, Apple is well aware the iTunes purchase model is on its way out. With so much attention being paid (at this very conference, no less) to Apple’s newly-fortified cloud services, the idea of owning a song file seems totally outdated. Why own when you can rent?

Now, when you compare Beats Music’s 250,000 paying subscribers to Apple’s $1.53 billion in 2013 iTunes music sales, the acquisition seems ludicrous. But the real value is in the fact that Beats has access to music database, the infrastructure, and all the legal is in place. Pulling in more subscribers, and improving the overall UI/UX is the easy part. For Apple, anyway, a company whose every move (and even rumors of moves) is publicized far and wide. Not to mention they’ve got the best UX in the business.

Plus, Apple works in baby steps. They aren’t going to abandon their iPod owners overnight, particularly since they were the ones who brought us the iPod in the first place. Just like they didn’t replace OS X along with iOS 7, though they’re clearly headed in that direction now. But mark my words. Before we know it, “Put 1,000 songs in your pocket” will soon become “Put every song ever made in your pocket.”

It’s a bit of a conundrum. Apple can’t come right out and say, “Hey, everyone, so stop paying for songs now, because in just a few months for the same money you’re currently spending to own ten songs, you’ll be able to access a practically unlimited library of songs.” That is, they can’t say it if they want people to keep buying mp3s and iPods.

But they’re excited, right? They dropped mad Benjamins and now they want to brag about it. Plus, it would seem downright weird if they failed to mention the deal at all. So what they do is they go the nervous-nerdy route. Craig Federighi picks up the phone and says he’s going to call Dr. Dre, their latest employee, pseudo-factiously adding, “I talk to people like him all the time, of course. It’s very normal.” This was supposed to be funny, but came off sounding disingenuous. Because I’m guessing, yeah, it probably is very normal. Senior VP of Apple, Craig Federighi, probably does talk to people like Dr. Dre all the time.

dre-Beats Deal

Dial Dre’s phone number and you get Apple headquarters. It’s all a sham!

Not to blog my own horn, but consider the following: back when my wife and I ran our own design company (Got Your Nose), we built a website for Led Zeppelin, an app for Ludacris, and conducted mobile strategy sessions with James Franco, despite that we were just a mom and pop shop. Though we never got to talk to anyone from Led Zeppelin, the other two turned out to be downright chatty. So, in the midst of a three billion dollar deal, I’m going to go out on a limb and guess there were more than a handful of phone conversations between Dre and Federighi. They may have even met for brunch.

During the call, Federighi goes so far as to call Dr. Dre, “Doctor”—an obvious, stilted, and intentional white n’ nerdy slip-up. Because everyone knows “Doctor” is not his proper form of address (Dr. Dre is not an actual doctor, though he does hold a Masters in Mixology). Why put on the show? I’ll tell you why. Distraction.

At this point it’s a big balancing act: not only does Apple need to appear cute and folksy in the face of a three billion dollar buy, they also need to refrain from disclosing the real motivation behind the move. Not that Apple isn’t accustomed to keeping us in the dark…

But hey, it’s all for the best. The point is, Apple’s right. We don’t need to own things anymore. Not only do we no longer need to own physical things, like DVDs and CDs and books, we don’t even need to own the digital versions of these things. Just give us a cloud server and a monthly fee and we’re good to go. No more worries about hard-drive capacity or lost files. And on their end, by offering the streaming service they’ve got us on a tight month-to-month leash, er, lease. We’re a guaranteed source of revenue. It’s a win-win. Now, if we could only rid ourselves of all these computers…

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Phono Image610 239 8100