CES: Beats Electronics to launch music streaming service this year

Ian Rogers will head Daisy; Trent Reznor is chief creative officer

Beats Electronics, the parent of the Beats by Dr. Dre line of headphone and other hardware, will launch its own music streaming service this year.

Company used the Consumer Electronics Show in Las Vegas to announce Ian Rogers as the service’s new chief and Trent Reznor as its chief creative officer.

Service does not yet have an official name — Beats is calling it Daisy for now — nor an official date to bow.

But it’s expected to become a revamped version of Mog, the subscription-based digital music service Beats purchased last year and combine elements of Rogers’ Topspin Media, in which Beats said Thursday it now also has invested coin.

A former general manager of Yahoo! Music, Rogers was the CEO of Topspin and will remain chairman of the company, which specializes in helping musicians market and sell their music, as he moves over to focus on Daisy.

Beats co-owner and Interscope-Geffen-A&M Records chairman Jimmy Iovine told reporters in Las Vegas that the company is in a unique position to launch a successful streaming service because of the appeal of its popular headphone brand.

“What we have right now, fortunately, is a very trusted name in music with Beats,” he said during a press conference. “We have the confidence of a lot of people and it will be a huge advantage for us.”

Iovine said he had been thinking about launching a music service since 1999, but “now we have the platform on which to launch it,” through Mog.

Few details of what Daisy will resemble were revealed at CES.

Beats did stress that the final product will focus on curating music from various sources that doesn’t currently exist on a broad scale. Beats is also eager to create a service that provides musicians with information about their fans.

“The next phase is all about curation by trusted sources,” Rogers said during the presser. “Until now it’s been about making music available. Now it’s about creating music services that have an emotional connection with the consumer.”

“Right now, it’s give me a credit card, here’s 12 million songs, good luck,” Iovine added, criticizing other streaming services.

Pricing for Daisy’s subscriptions have not yet been announced, but will be competitive with other streaming services, according to Luke Wood, president chief operating officer of Beats.

Beats is expected to really heavily on its hardware biz to launch Daisy.

“The priority will be to make Daisy the best music service … and we will use everything that Beats has to push Daisy through,” Iovine said.

Reznor is the latest artist Beats is pairing up with to develop products after launching the Heartbeats earbuds with Lady Gaga, and headphones with Lil’ Wayne, DJ David Guetta and basketball player LeBron James.

Move into launching its own streaming service is the latest for Beats as its founders now own 100% of the company, after buying stakes back from Monster and HTC.

Santa Monica, Calif.-based company is now developing its own electronics products fully in-house for the first time since last fall, with the Beats by Dr. Dre Pill speaker and the Executive line of headphones the first to hit the market before the holidays.

When Beats was founded by Iovine and hip hop artists Dr. Dre, in 2006, the two were looking to “address the problems of the music business as a macro and build a product that celebrates their skill sets and allows the music business to grow,” Wood said.

They didn’t like “how the quality of sound was marginalized by the consumer electronics companies,” Wood said, and launched their first headphones two years later. “They wanted people to experience the music emotionally the way the artists intended it in the studio. We had lost a whole generation that didn’t know that sound have been degraded.”

Beats’ sales took off with the proliferation of connected mobile devices, from smartphones to iPads.

“The whole world had this necessity for headphones,” Wood said. “Being entrepreneurs, it was an opportunity for us to see how far we can shake things up.”

Over the holidays, sales of Beats product was up 82% year-over-year during Black Friday. In December, they were up 40% with Beats controlling 69% of marketshare of the premium headphone biz and 48% of the overall headphone market.

“It was an exciting year for us,” Wood said.

Beats isn’t looking to flood the market with more hardware and sees the streaming business as a way to boost its bottom line further and grow the Beats brand.

“We want to come out with as few products as humanly possible,” Wood said. “It’s better to bury your bad songs in the studio than on your record. We develop a lot of platforms but only want to come out with things that are stellar.”

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