Exploiting the Consumers and Unscrupulous Profiting: An Investigative Look Behind the Phenomenal Rise of Beats by Dr. Dre

The Spark of an Idea

You see LMFAO, Justin Bieber, Ellen DeGeneres or perhaps even Lebron James rocking those stylishly cool looking headphones on music videos, talk shows or even just out and about in Hollywood? Well, those are the Beats by Dr. Dre, headphones that kids are willing to save up for weeks or months on end just so that they can have one of those cool looking headphones too. This phenomenal rise of popularity started with a spark, while two men were walking down Carbon Beach in Malibu, California.

These two guys were the first, a well-known and much sought after producer in the music industry, Dr. Dre. The other is the top dog at Interscope Records, Jimmy Iovine. In a nutshell, what was happening was that Dr. Dre was being persuaded by his lawyers to lend his now famous name to a line of branded sneakers. On the other hand, Iovine was whining about how teenagers were listening to music using cheap “white earbuds” and headphones. Oh, the irony. So with that in mind, he famously told Dr. Dre, “F*ck sneakers, let’s sell speakers”. The idea behind this concept, if successful, is simple. Dre would use his musical expertise to make these headphones the best sounding headphones that have ever grace the headphones market while Iovine would use his massive influence over the music industry to make artists wear them publicly and in music videos. With that, came the birth of Beats by Dr. Dre, the biggest money making machine in the industry of music at the expense of the consumer’s wallet.

The Brilliance of Marketing

In early 2008, Dr. Dre and Iovine debuted their very first headphones, named Beats by Dr. Dre. It wasn’t called the Solos, Pros or something else like they do right now to differentiate the types of headphones they’re selling to ignorant consumers– just Beats by Dr. Dre. These could later become the Studio variant in the Beats line. And these, being the first celebrity headphones ever in the market, would be an instant success. There was nothing else in the market that have the same “signature sound” and style. Even more so, all of a sudden, we see celebrities wearing everywhere. From music videos that receive hundreds of millions of views on YouTube to just shopping with a headphone clinging on to their neck. Beats by Dr. Dre, guys, are no longer just headphones. They’re fashion accessories.

And one last thing. I can guarantee you, 200%, that these celebrities did NOT purchase the headphones themselves. They probably got either a custom made version personalized just for them (of course, the huge B on the sides still readily visible) straight from Monster or they got it at some party Iovine hosted or something. Iovine, if you haven’t figured out, is probably one of the smartest men out there. How much does a Beats by Dr. Dre headphone cost? Approximately $400. But by giving these celebrities free headphones, they’re inclined to wear it and therefore, they’re now a walking advertisement. Just like you and me when we wear out Nike or Billabong shirts, the only difference being celebrities wearing it holds a whole lot more value.  Instead of having to pay thousands for an ad spot on the local newspaper, giving celebrities free headphones is like paying for a cheap ad spot on your local newspaper – just a lot more influential. If you see an ad on the newspaper, you’re more or less likely to be skeptical about it since its, well, an ad. However, the moment celebrities start wearing it, it seems like they made the choice themselves rather than getting forced to do so – people are more easily convinced this way. So next time you see a celebrity of some sort in TMZ.com or just strolling down Hollywood with Beats by Dr. Dre around their neck, remember, they’re just of an advertising campaign for Monster and Beats.

The Influence of Design

Beats by Dr. Dre are not headphones. They’re overpriced accessories. The first thing many consumers would note the moment they see a pair of Beats by Dr. Dre is the design. “These are so sexy, I just got to have it.” That is indeed one fact that is almost impossible to dispute – there is no way you can define and categorize these headphones as ugly. And why so? Because each and every Beats by Dr. Dre model goes through 75 – 80 design iterations before a final design is chosen. While that happens for every headphones that Monster and Beats try to design it as well as possible, they’ve kept the “sound curve” the exact same for the past few years, since the first iteration of Beats by Dr. Dre even though true audiophiles have complained about the spectrum of sound on those headphones. This really just goes to show what Beats and Monster is actually concentrating on – style, not sound. Here’s a fun little fact. Did you know that Jony Ive’s predecessor at Apple designed Beats by Dr. Dre headphones? Yeah. He name was Robert Brunner. No wonder the products look fantastic.

The Social Effect

This has been around for years but it really became prominent with the rise of not only Beats by Dr. Dre, but also the general “coolness” of using an Apple-made product, even if it’s not the best. Here is a scenario to help you explain this theory better. An average kid named Jon comes to high school with a pair of Beats by Dr. Dre headphones around his neck. Most of his classmates immediately recognize it because it is so popular in the media culture, appearing everywhere. Immediately, Jon is labeled and branded as the “cool” kid because he, number one, has the money to buy it and number two, his friends just saw their idol, be it Justin Bieber or whoever, get groceries at the local supermarket with those headphones too. It doesn’t matter or not if it is the best sounding headphones you can get your hands on at that price range. It is already associated with something cool and therefore, when Jon’s friends, who previously have only used cheap $30 Skullcandys listen to that pair of Beats by Dr. Dre, they probably thought that the music coming out of those speakers were sounds from heaven because of their limited exposure. To gain that “cool status” and have an astonishingly extraordinarypair of headphones, they would save their pocket money for months to afford it. Whether it sounds good or not, everyone in the school wants one. No matter the price.

The Bass Sells 

This section will talk solely about the sound quality and noise-cancelling feature on the Beats by Dr. Dre headphones, or rather, the lack thereof. These headphones, for anyone who has listened to them before, are incredibly bass heavy. In fact, it focuses so much on the lower-end (where the bass normally is) that it distorts the mids (where most male, female vocals and instruments are) and highs (where some female vocals are and other instruments playing at a higher pitch than usual; groups like High Society would be categorized in this section). The bass produced by the “revolutionary” drivers on the Beats by Dr. Dre headphones are incredibly muddily and slow. There are two kinds of bass: One is a quick, fast-paced and sharp. These are seen on headphones like the Audio-Technica ATH M50. The second kind is whereby it’s slow, muddled and almost seemed in a way, dragged. These are seen on most celebrity styled headphones such as the Beats by Dr. Dre. While most teens would argue, “But hey, I listen to people like Lil Jon and Pitbull. I need to hear the bass. I need so much bass that it crushes my skulls.” (Just kidding on the last line.) Well, trust me, I listen to those people too. I listen to lots of R&B, House Music and Pop, all which require a ton of bass for the track to fully come through. However, that is not what the Beats by Dr. Dre offer. They offer an over-bearing low end that kills the track and makes it sound like it is engineered to sound bad. Now let’s go ahead and talk about the noise-cancelling technology (this is only available on the Studios variant currently). If you don’t know what that is, it is basically all the battery powered headphones you’re seeing in the market today. Well, at least most, unless they have a built in pre-amp in there. But for the rest, noise-cancelling is a technology that cancels out all the waveforms around you and balances it with the track you’re playing so you can’t hear what’s happening outside of you. ANC (Active noise-cancelling) blocks surrounding noise off selectively too, which is a huge plus. It’s fantastic if you’re on an airplane next to a roaring engine or in a bus filled with fourth graders who got too much sleep the night before. Bose has really perfected their technology and therefore, the Quiet comfort series sells quite amazingly. Beats by Dr. Dre’s noise cancelling, on the other hand, seem like an afterthought. If you have a Beats by Dr. Dre Studios headphones lying around, here do this. Put those overpriced headphones on, turn the ANC feature on but don’t play any music. You will hear a slight background hiss, due to the cheap drivers Beats and Monster decided to use, which is a nice segue into our next section.

Unethical Profiting: A Behind the Scenes Look

A few weeks back, I heard a story that I simply had to share. A few weeks back, one of this guy’sfriends asked the guy to told the story what he should do in order to make the exact same headphones Beats Audio produce, but have enough differences on the design on the box to avoid getting sued by Dr. Dre and Iovine. So that person (the one looking to produce the replicas of Beats by Dr. Dre) went to talk to a Chinese company based in China, of course, on possibly manufacturing these headphones for sale. Obviously, the Chinese company on the other end of the line said, yes, sure. And when asked what the costs were to produce the exact same headphones used by Dr. Dre – by that I mean the identical drivers and materials used on the headphones – guess what was the company’s answer…

No, you probably guessed it wrong. That company replied saying for each identical headphone to the Beats by Dr. Dre that they produce, it would only cost the buyer $18. Depending on the packaging that you choose, it costs an additional $5 - $6 more. I’ve personally called a company in Guan Dong, China to verify that number and the quote he gave me was around there. And it was. Apparently, if I “purchase enough”, I would get free packaging too. Can you imagine that? Here you are, happily swiping your credit cards for a pair of $400 headphones that cost them $24 to produce. Now, let’s talk about profiting in the technology industry and how it generally works. Let’s take Apple for example.

As a rule of thumb, Apple generally makes a 100% off their products. If they sell you a $1000 MacBook Air 11 inch, they paid around $500 for it. This includes R&D, advertisements, shipping and everything else in between. If they sell you the $499 baseline iPad, it probably cost them around $249 to produce. This is where it gets interesting since the more higher storage Apple sells you, the more money they make since they influence on the industry basically means that they can get flash memory for cheap. Real cheap. If you’re buying the 16 GB model, they’re not making as much money as they would have if they sold you the 64GB variant. But that’s all aside of the point. My point is that what Beats by Dr. Dre is doing is basically daylight robbery; however, this is one where people are willing to fall into. If you think Apple’s 100% profit is a little much, consider this. Beats Audio and Monster (used to be, but now they ended their contract together for good) is making 1666% per headphone that they sell you. I don’t think I need to say further, but this is really one of the most unscrupulous ways of doing business I’ve seen in a long while, short of probably a drug cartel somewhere in Mexico or Africa. Think about it. It’s not 166%. It’s 1666%.

Billboard.com reports,

So it's no surprise that Iovine is frustrated by the disposable white earbuds and low bit-rates that dominate today's digital music landscape.

No. What Iovine is frustrated by is the number of zeros in his bank account, not saying he’s a broke man or something, but rather, a greedy businessmen trained at maximizing his profit no matter what.

Commentary and Ending

By the end of this article, I’m sure most of you Beats worshippers would be foaming at your mouth with your Beats by Dr. Dre headphones still weighing down your neck unnecessarily.  Here are some of the comments that I’m predicting will come soon after this article is published:

“This guy is writing this because he have got no money to buy such good headphones.”

“A poor man complaining because he can’t afford a pair of good headphones.”

“What the hell stupid guy.”

“Everything on here is false and that guy should go to hell.”

“He’s probably just bitter because he lost his amazing headphones that we all worship every time before we listen to it.”

 No.

I’ve tried almost every single pair of headphones Beats by Dr. Dre headphones Monster and Beats have ever produced: the Beats by Dr. Dre Studio, Solo, Solo HD, and JustBeats by Justin Bieber, which sounds just as horrible as the Solos. There after, Monster and Beats Audio took a break from releasing new headphones and decided to break up, making the Beats by Dr. Dre Mixrs their last project. A corroboration between French DJ David Guetta and Beats Audio, they made a pair of headphones that DJs want to use. Well, I bought one to those too myself, hoping that the sound would improve after years of disappointment. Nope. Not a single bit. This is really unfortunate.

As I read on a forum I happened to chance upon,

“I have the exclusive White Dr. Dre's and they are absolutely AMAZING. I would not take any other headphones and I know that the price tag can be at least 300 but they are truly the best headphones in the world. No exception.”

No wonder his username was WirelessBrain.

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