Apple agrees to buy Beats for $3.25 billion in its biggest-ever deal

Landmark deal: Apple will buy Beats Electronics for $3.25 billion - its biggest ever acquisition. Photo: AP

Apple has agreed to buy Beats Electronics for $US3 billion ($3.25 billion), its biggest-ever acquisition, nabbing a popular line of headphones and a nascent subscription music-streaming service as the iPhone maker seeks to rev up growth.

They have done a hell of a job in branding. 

Mike McGuire, analyst

Beats founders Dr Dre and music-industry executive Jimmy Iovine will join Apple. The purchase price is $US2.6 billion, with another $US400 million that will vest over time. The acquisition is projected to close in the fiscal fourth quarter.

Billions in Beats: Veteran music producer and executive Jimmy Iovine. Photo: Bloomberg

The deal signifies that Apple chief executive Tim Cook is willing to use the company's $US150.6 billion in cash more aggressively, a departure from predecessor Steve Jobs' playbook of acquiring smaller companies to bring in technology and talent. As sales of digital media downloads fall, buying Beats gives Apple a foothold in internet-based streaming, where Google's YouTube, Spotify and Pandora dominate.

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"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Cook said.

The deal indicates how the CEO, who is facing pressure to jump-start Apple's sales amid cooling iPhone and iPad sales, is shifting to acquire growth. Even as Google and Facebook have spent billions on acquisitions, Apple previously avoided tie-ups of this size. Its biggest past purchase was the $US400 million deal for NeXT in 1997, which brought Jobs back to Apple.

Sound off: Dr Dre wearing a pair of Beats headphones.Photo: Reuters

Music subscriptions

A central part of the deal's allure is the Beats Music service. While the purchase would use just a fraction of the cash and investments on Apple's balance sheet, it shows the company is serious about introducing its own music-subscription service. Jobs had long resisted such a move, insisting that people don't want to rent their music.

Apple took a step in that direction last year, introducing iTunes Radio, an advertising-supported music-streaming service that competes with Pandora.

While Apple's iTunes remains the world's largest seller of music, it only offers downloads of single tracks and albums. Music-streaming services, where a customer pays for access to the songs instead of owning them in a digital library, have gained in popularity, especially among younger listeners, said Gartner analyst Mike McGuire. But the services aren't lucrative and present business challenges, even for Apple, he said.

"They haven't moved to a subscription model, and there is a lot of good reason they didn't. The big one is there isn't a lot of money to be made."

Artists' compensation

Musical acts such as Radiohead have criticised subscription services because they don't compensate artists as well as the pay-per-track model. For instance, the latest albums from the bands Coldplay and The Black Keys are available for sale on iTunes, but cannot yet be streamed on Spotify.

Beats introduced its music-subscription service earlier this year. Like Spotify and other rivals, the company offers unlimited access to millions of songs in exchange for a monthly fee. Beats hired music critics, radio DJs and record-label veterans to help create playlists and other curation tools to help customers navigate the overwhelming amount of music available – a component Iovine said was missing from the experience.

"It needs feel. It needs culture," Iovine said in 2012. "What Apple has in the downloading world is very, very good. But subscription has an enormous hole in it, and it's not satisfying right now."

All-star marketing

In buying Beats, Apple also would get the company's colourful, high-end headphones. Iovine and Dr Dre, whose given name is Andre Young, started Beats in 2006 amid rising use of iPods and smartphones to listen to music on the go.

The pair quickly proved their marketing acumen. The headphones, priced from about $130 to $500 in Australia, gained popularity as stylish accessories for the general public and not just audiophiles, fuelled by partnerships with musicians such as Lady Gaga and athletes such as NBA All-Star Lebron James, who helped pitch the products to a younger audience.

"They have done a hell of a job in branding," McGuire said.

Apple and Beats have deep ties. Iovine was a friend of Jobs and an early music-industry advocate for Apple's efforts with the iPod and iTunes.

Iovine's fortunes

The acquisition is a boon for Iovine, who has worked on projects as varied as Bruce Springsteen's Born to Run and Eminem's movie 8 Mile, and Dr Dre, whose seminal rap album The Chronic helped make rap music popular with suburban teenagers in the 1990s.

Iovine may become a billionaire. He owns 25 per cent of Beats, and with the proceeds from the deal and millions of dollars collected from more than four decades working with artists such as U2 and Fleetwood Mac, he will have a net worth of more than $US1 billion, according to the Bloomberg Billionaires Index. Dr Dre, meanwhile, is projected to collect $US640 million if the deal is completed, according to Bloomberg data.

Other investors in Beats include private equity firm Carlyle Group and Universal Music, the world's biggest record label.

Source:

www.smh.com.au

Posted by Editorial Team on 11:13 PM in Apple agrees, Beats founders, biggest-ever deal, buy Beats Electronics, executive Jimmy Iovine, Google's, headphones, past purchase, playbook, YouTube

Since It Can't Sue Us All, Getty Images Embraces Embedded Photos

For the past decade or so, the best defense Getty Images could find against the right-click button on your mouse—home of the “copy” and “save” functions—has been a team of scary lawyers. By copying one of its images and using it on your blog, you’re entering a random drawing where the prize is a terrifying letter offering a tutorial in copyright litigation.

But this week the photography company is embarking on a different strategy: Anyone can now visit its website, grab some embed code, and display an image on blogs or Facebook (FB) pages without paying a licensing fee. As a technological feat, of course, embeddable media is unremarkable. It’s a basic feature on YouTube and Twitter (TWTR) and many other major websites. Yet it marks an unlikely pivot for Getty, which makes its money selling permission to use photos from its vast library of work from more than 150,000 individuals, stock photo agencies, and media organizations. Creating an embedding tool is a tacit acknowledgment that Getty simply can’t police the use of its images to the four corners of the Internet.

Craig Peters, a senior vice president at Getty, is more explicit about the futility of trying to maintain control of its images. Three years ago, Getty acquired PicScout, which makes a technology to crawl the Web and track the images appearing online. PicScout described itself an intellectual-property protection service, but Getty eventually learned a different lesson from the acquisition: The problem of purloined images is too big to solve on a lawsuit-by-lawsuit basis. Peters found that “tens of millions” of Getty photos have been shared without legal licensing. “There are two ways to look at the world,” he says. “People sharing content without a license is an issue—or it’s an opportunity.”

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Peters likens the current state of photography to the pre-iTunes music industry, where there was no legitimate way to access digital songs. People are inevitably going to display images publicly on blogs and social media feeds, so the only way to remain relevant is to provide them with a viable legal alternative.

If the Getty project is successful, it will eventually open a new revenue stream. The images displayed on other websites will remain on a server owned and operated by the company and will contain information about the photographer and how to license the images for commercial use. Eventually, Getty could include advertisements within the embedded images, much like YouTube videos embedded on personal blogs show ads that bring revenue to Google (GOOG). But Peters says Getty hasn’t figured out how exactly that will work.

The embedding tool is intended only for noncommercial uses. In many cases, Peters says, publishers will prefer to pay for images because they will get more control and won’t have embedded images sending information about their Web traffic back to Getty. Embedded images will not be allowed in contexts that promote products or businesses. “That’s a pretty clear delineation,” Peters says. “We’ll enforce the terms of this license if people start using these images to do that.”

VIDEO: Martha Stewart: Pinterest Has a Copyright Issue

It could be murkier than he admits, though. In an Internet chock-full of self-promotion, obscurity can turn into fame in a matter of moments. What happens when an individual’s personal brand—or blog—becomes a business in and of itself? Unclear.

This project isn’t coming from nowhere. Getty has been increasingly bold in experimenting with ways to keep up with changes forced on the photo industry by digital distribution. Last fall the company forged a partnership with Pinterest in which it receives payments from the social network in exchange for metadata. Getty is already working with smaller startups such as Stipple to embed advertising into images.

At the same time, the company is hardly laying off its lawyers. Getty regularly sends letters to those it finds using its images without licenses, but those disputes rarely end up in court. According to records compiled by Bloomberg Law, Getty has only filed seven copyright infringement lawsuits in the past five years. Of those, five came in a single week this January.

STORY: How Sheryl Sandberg and Getty Are Making Stock Photos Less Sexist

News Source:www.businessweek.com

Posted by Editorial Team on 6:11 AM in blogs, Embedded Photos, Facebook, Google, iTunes, PicScout, Twitter, Web traffic, websites, YouTube

US appeals court permits YouTube to display anti-Muslim video with changes

Google has been allowed by a court to keep a controversial film trailer that mocks the Prophet Muhammad on YouTube, but the video has to be scrubbed to remove the performance of actress Cindy Lee Garcia, who claims infringement of her copyright.

The U.S. Court of Appeals for the Ninth Circuit upheld its earlier order, asking Google to take down and prevent new uploads of the trailer, but did not preclude the posting or display of any version of ‘Innocence of Muslims’ that does not include Garcia’s performance.

The court had earlier ruled that YouTube should take down the controversial video which sparked off protests in a number of countries in 2012. Garcia had argued that the video would cause her irreparable harm if there wasn’t an injunction on it, as she was subject to death threats.

Google last week asked the court to allow it to retain the trailer online until the disposition of its upcoming petition for a full-court rehearing of the earlier decision.

The company had said in its filing that it has complied with the court’s order to take down the trailer, “but in light of the intense public interest in and debate surrounding the video, the video should remain accessible while Google seeks further review.”

Google, YouTube, and the public would suffer irreparable harm to their First Amendment and other constitutional freedoms if the company was not immediately granted a stay on the order, it said in the filing.

“Protected speech on a matter of broad public interest is undoubtedly being gagged, because the panel has suppressed the entire trailer, even though Garcia only claims to hold a copyright in the five seconds where she appeared,” it said.

Google and Garcia’s counsel could not be immediately reached for comment.

The appeal is the latest in a long-standing bid by Garcia to get Google to take down the YouTube video which she said included a performance by her for another movie that wasn’t released, and was dubbed over to include offensive remarks about the Prophet.

Garcia has alleged previously that she was cast in a film titled “Desert Warrior” and that defendant Nakoula Basseley Nakoula, also known as Sam Bacile, a resident of Los Angeles county, told her it was an adventure film about ancient Egyptians. Instead, Garcia’s scene was used in an anti-Islamic film titled “Innocence of Muslims,” according to court records.

In a petition in 2012 before the U.S. District Court for the Central District of California, Garcia stated that she had not assigned the rights to the copyrighted work to anyone, and was asking YouTube to remove the video as its copyright holder. The plea for an injunction was rejected, leading to the appeal.

Garcia does not claim copyright interest in the trailer, but claims that her performance within the film is independently copyrightable and that she retained an interest in that copyright, the appeals court ruled in a 2-1 decision.

Google, in contrast, claimed that an acting performance like Garcia’s cannot be copyrighted and that the Copyright Act makes a distinction between a copyrightable work and its performance. The majority decision by the court can throw up situations where bit performers could under certain conditions have the authority to demand the removal of YouTube videos, it said.

“Most of the millions of amateur filmmakers who upload their videos and other creative works to YouTube presumably do not have written agreements with those who appear in their videos,” Google said in the filing. “That means anyone who appears in those videos—even for five seconds—will now have independent authority to contact YouTube and demand their removal.”

News Source: www.pcworld.com

Posted by Editorial Team on 1:24 AM in anti-Muslim, authority, Copyright, death threats, Google said, removal, U.S. Court, US appeals, video, YouTube

Clash over Google Glass shows hurdles facing wearable tech

A confrontation at a San Francisco bar involving a Google Glass tester points to the public's growing concern over the invasive nature of new technologies such as wearable gadgets and drones.

Google Glass Base Camp (Peter DaSilva, For The Times / July 15, 2013)

By

SAN FRANCISCO — A tussle involving a woman wearing Google Glass in a San Francisco bar is just the latest incident to highlight growing tensions over the new wearable technology even before Google Inc. begins selling it to the public.

Sarah Slocum, a 34-year-old technology blogger and social media consultant, said she was "verbally and physically assaulted" over the weekend by patrons of a bar in the Haight-Ashbury neighborhood.

A man allegedly ripped the Glass off Slocum's face and ran out of the bar with it. She got the Glass back but says someone stole her purse and phone. Slocum put video footage of the incident that she filmed using Glass on YouTube.

Several witnesses told KPIX-TV Channel 5 in San Francisco that bar patrons were excited to see how Glass works, but some became upset about the possibility of being recorded by the device and asked Slocum to remove it.

A man who identified himself only as Brian said he was not surprised things got out of hand.

"You know, the crowd at Molotov's is not a tech-oriented crowd for the most part," Brian said. "It's probably one of the more punk rock bars in the city. So you know, it's not really Google Glass country."

That a bar in San Francisco is not Google Glass country shows just how tough it may be for Google to get the public to accept smartglasses the way it has accepted smartphones.

"There is more visceral reaction to this technology than most, and part of that has to do with the fact that you are wearing it on your face," University of Washington law professor Ryan Calo said.

Google Glass performs many of the same functions as smartphones: You can read and reply to emails and text messages, take photographs and film snippets of video.

But the in-your-face nature of the technology has touched a nerve in a society growing increasingly concerned about the invasive nature of new technologies such as wearable gadgets and drones.

Google has gone to great lengths to educate the public about Glass. It has extolled its benefits in media interviews, demonstrated the technology for lawmakers on Capitol Hill and put the technology in the hands of so-called Explorers, early testers who essentially act as "positive ambassadors" for Glass.

The Internet giant also put out basic etiquette and safety tips for Explorers, reminding them to be respectful and to ask permission before taking photos or filming, just as they would with a smartphone.

"New technology raises new concerns, which is why educating Explorers and those around them is a top priority for the Glass team," a Google spokesman said. "The point of the Explorer program is to get Glass in the hands of people from all walks of life and see how they use it out in the world."

Slocum is one of the early testers of Glass. She said she has been wearing the device for about a month and says the reaction has been largely positive.

"Some people think, 'Oh, it's a privacy invasion.' But it's really no different than the smartphones people carry in their pockets," Slocum said. "People just don't understand the technology.... Once I allow people to try it on and show them how it works, they love it. They say, 'Wow, that's so cool.'"

Slocum said some people still don't like it when she wears the device. But she was stunned by the "venom" she experienced while bar hopping with friends. She says several bar patrons insulted her, shouted obscenities and even threw a bar rag at her.

Calo, a privacy expert who has tested Glass, said that that kind of reaction to the head-mounted computer "has a large measure of irrationality."

"Glass in its present state is not capable of the kind of privacy invasion worth beating someone up over," Calo said.

Many Glass wearers report little or no negative reaction. But high-profile incidents such as the bar conflict have given the technology a negative perception.

Glass users have been tossed from movie theaters, and a San Diego woman was pulled over for driving with Glass. A few states are considering banning drivers from using Glass out of concern that the small screen will distract them on the road.

And Glass has had its share of run-ins in bars. In November, Lost Lake Cafe & Lounge, a 24-hour diner and bar in Seattle, said it had to ban Google Glass after a customer refused to stop wearing and operating the device inside the restaurant. Another bar in Seattle, the 5 Point Cafe, was the first to ban Google Glass. The two establishments are owned by the same restaurateur.

jessica.guynn@latimes.com

Twitter: @jguynn

News Source: www.latimes.com

Posted by Editorial Team on 11:21 AM in 34-year-old, 5 Point Cafe, facing, Glass, Google Glass, KPIX-TV Channel 5, San Francisco, smartphones, technologies, YouTube