On Wednesday, Apple announced it acquired headphone-maker Beats for $3 billion.
It did this deal for three reasons:
- The number of new releases on iTunes this year is the smallest ever.
- Growth of iTunes sales has stalled.
- Apple's earbuds are bad.
On Wednesday evening, Apple executive Eddy Cue and Beats CEO Jimmy Iovine sat for an interview on stage at the Code Conference in Southern California.
Cue said Apple bought Beats because "music is dying. It hasn't been growing." He said combining the two companies will help it grow again.
Cue said that the number of new releases on iTunes this past year are the smallest the company has ever seen, and that the growth in the number of songs sold through iTunes has "leveled off."
He said that Beats has a great subscription music service and that Apple can make it a big business because it has a lot of customers, knows what those customers listen to, and has an easy way for them to pay for things.
Cue said what makes Beats good is that it provides users with curated playlists.
He said: "When you bring what Beats has got and what we've got it's not two plus two is four. It's something much more than that."
Cue also said that Apple is excited to sell Beats headphones, which he called "amazing premium headphones."
Iovine said that he met Eddy Cue and Steve Jobs back in 1999 and felt that Apple understood and respected music and that he's wanted to work with the company since.
Iovine also trashed Apple's earbuds. "They make them to see if the machine works."
Cue agreed: "we make the best headphones that come in the box."
Cue may think Beats's subscription service is great, but not a lot of consumers agree with him. Iovine admitted on stage that it only has 250,000 subscribers.