A survey in the Spring of 2014 found that 46.1% of teenagers pegged Beats by Dr. Dre as their preferred headphone brand for their next headphone purchase. Beats Electronics controls 27% of the headphone market and 57% of the premium headphone market (premium headphones are headphones that are $100+). Before Beats got in the game, high priced ‘premium headphones’ were exclusive to the realm of audiophiles. Beats by Dr. Dre has disrupted the fabric of the headphone game, it’s no wonder audiophiles are outright hostile to Beats presence. The effrontery of Beats by Dr. Dre is not just about inferior headphones, it is about strong marketing forces. This is not new, but rather just a continuing tradition of an unstoppable force of celebrity endorsement, heavy advertising, ostentatious appeal, the pursuit of status: all the tricks of modern day consumerism.
Here’s the TL;DR on Beats headphones, Beats are really not about the sound, they are about fashion sentiment, the ‘coolness’. Dre promotes the idea of good music but Beats arguably don’t deliver on that note.
Andre Young, better known by his musical moniker, Dr. Dre, and co-founder of Interscope Records, Jimmy Iovine, launched Beats Electronics in 2008. Urban lore suggests that Dre. wanted to make a sneaker line, but Iovine suggested ‘speakers’ instead. The original troika was complete with the infamous markup artist: Monster Cable, serving the role as Beats manufacturer. Beats Electronics (now owned by Apple) isn’t selling headphones, they’re selling the idea of a better auditory experience. Instead of selling excellent ‘cans’ (audiophile speak for headphones) it was more profitable to sell the idea of superior headphones. It speaks volumes when Beats does not even publish auditory-related statistics (Freq response, etc). But debating whether or not if Beats are any good, misses the point (Although I do get involved in that knife fight, below).
Somehow quality and musical nuance is lost when people use shitty headphones, the listeners are missing out and artist are having their artistic vision muddled by inferior hardware, or so Dre says. Dre argues that he is a studio sorcerer, he knows what good music is. Dre has made beats and sounds in the caldron of hip hop for eons and he was frustrated that Apple gave users cheap headphones with iDevices, Dre’s solution was to fix this by offering better headphones.
If you buy Dr. Dre’s argument, he is saying that basically you are unlocking the full potential of your music by listening to them through authentic Beats by Dr. Dre™ headphones. Now I’m not saying that all headphones are the same, there are some headphones that are objectively better, Beats by Dr. Dre are not, and the debate on how good they are misses the main point of Beats, which is, fashion and coolness over substance. Let’s be real, if Beats retailed for $50, they wouldn’t be as controversial as they are. Beats Electronics wouldn’t be worth over a billion either through and this article wouldn’t exist.
Now back to my main point. Here is something that lots of people have yet to figure out, the big brands in the world exist just as that: brands. No one manufactures stuff anymore, I don’t say that as a disgruntled factory worker. The biggest brands in the world don’t make their own stuff anymore. Apple doesn’t make it’s own phones, a myriad of contractors do (Foxconn being one of the most visible ones). Your Nike shoes were made with bottom-of-the-barrel labour by the global workforce. They were not made in Nike factories, but in a factory that belong to a contractor or sub-contractor. The Fordist economy is gone. What’s my point? The product doesn’t matter, the idea of the product is what matters. These brands exist as an idea, their actual product is secondary, the ideals that the products represent are more important.
The political scientist Benjamin Barber writes in Jihad vs. McWorld (review forthcoming) discusses the difference between hard and soft goods, which many of the global corporations of the world (the McWorld) are utilizing soft goods to bump up profits. This is what anti-consumerism is about.
The traditional economy is one that is well understood, we all have needs of the body, we satisfy these needs through open exchange with producers(hard goods, not to be confused with hard/soft lines of retail speak). The new post-modern economy is characterized by advertisers who are manipulating the needs of consumers to produce more growth for producers. Hard goods are aimed at the body, soft goods are aimed at the mind and spirit (pg.60). Barber was pretty accurate in describing how media forces and the internet would largely shape how we feel and how we buy things. Beats by Dr. Dre are the 2008-current rendition on of the Nike play of the 2000’s the blending of hard and soft goods. Beats are more about the “mind” than it is about delivering nice sound. It’s about looking ‘cool’ and thinking you are securing a sound piece of audio equipment to last you the next few years.
Manufactured Image
Celebrity Endorsement
It probably surprises no one to find out that Beats relies heavily on celebrity endorsement, I mean, the name “Beats by Dr. Dre” give that away pretty quickly, but many more celebrities have married their likeness with the sharp appeal of Beats. The relatively nascent Beats Electronics sent out Beats to Lebron James and the USA basketball team for the 2008 Beijing Olympics. They wore them during the events, generating huge publicity for Beats.
Not only that, Beats have found their way on the heads of numerous artist. All your retail variety artist, Justin Bieber, Eminem, Laddy Gaga, all with their own custom style of Beats. It’s not just that roll of musicians who got on the train to endorsement land, a litany of celebrities have allowed their likeness to be featured with Beats. An ad campaign titled”#SoloSelfie” shows what I mean.
This ad is one drop in the bucket of celebrity endorsement. Beats have been showing up on the sets of music videos for quite awhile now (Interscope records). Beats get featured in games, DJ Hero for instance and undoubtedly others. I was even dishearted to see a pair of Beats being featured in the show Criminal Minds (I highly doubt a highly qualified FBI agent with a background in psychology would purchase Beats by Dr. Dre). They’re ubiquitous, name another brand of headphones? What do you got? Maybe Skull Candy? Sony? There is robust competition when it comes to specs, but when it comes to name appeal, Beats trump all.
A different year the same play
Dr. Dre and Iovine were late to the party, they are simply using a play by Nike, which is the archetypical example from the nineties. Everyone has probably heard of Air Jordans, the line of running shoes. Here’s the secret, the market for running shoes isn’t that big, but the market for the idea of athletism and everything that goes with it: fame, honour, wealth, and sex, well that market is pretty damn big. Liz Dolan, former Nike corporate vice president of communication said, “We are not a shoe company, we are a sports company”. Former CEO Phil Knight describes this quite openly too:
“How do we expect to conquer foreign lands? The same way as we did here, We will simply export sports”.
Nike doesn’t want just athletes to buy these shoes, they actively want observes, non-athletes to buy the shoes, and they do. If only athletes bought Nike shoes, Nikes would be obscure to the general public, like AKG or Audio-Technica is obscure to the general public, but known to audiophiles. The people who buy Nike are largely people who aren’t athletes, they are the spectators, the watchers.
This is hardly from the realm of cynicism or conspiracism. It’s in the open, Phil Knight again has supplied the bullets to the gun, when he said:
“Our target consumers have been watching John McEnrone and Charles Barkley for years. The emotional ties are in place”. In other words, our target consumers are people who watch sports.
Nike is exporting sports and it’s associated ideas, but it’s also exporting Micheal Jordan himself. Jordan is a brand, his name is ubiquitous in every corner of the world that “McWorld” has its greasy tentacle in.
Sound familiar? What other celebrity has been plastered over a “cheap” ( not in price but quality) consumer product? Beats by Dr. Dre. This brings us to the next point about Beats, they are very cheap to make. All the value is in the appearance of being better products and all the marketing that goes around Beats. It’s really no surprise Dre. wanted into the sneaker business originally.
“Today, the premium headphone market is defined by fashion and brands as much as it is by sound quality,” Ben Arnold, director of industry analysis at market research firm NPD Group said in a recent report. “One-third of premium headphone buyers are under the age of 25 and many of these consumers view headphones as equal parts listening device and fashion accessory”.
Beats Cost $20 to Make
Like an anatomy class dissecting cats, the tech/upstart blog Bolt took apart a pair of Beats. Due to the high prevalence of counterfeit Beats, Bolt accidently purchased a set of counterfeit Beats and dissected them unaware that they were fake. The prevalence of fake Beats presents such a large problem for Dre, that the Beats by Dr. Dre website has a page on how to detect counterfeit Beats.
After the initial tear down on the fake Beats, Bolt was contacted and were told they bought fake Beats. Then came tear down number two, this time with real Beats bought at Target.
The great thing about these teardowns was that the author explained most of the parts and gave an educated estimate to what they would cost, keeping in mind the tooling and manufacturing variables. The second great thing revealed by the teardown? That both pairs were remarkably similar.
According to the teardown, the most expensive thing in Beats headphones are the cast metal supports that cost $4.20. The second most expensive thing? The gift box, which allegedly cost about $4. Arguably the most important piece, the speaker? $1.50 each.
Bolt.io also found that the fake and real headphones contained’unnecessary’ metal. The metal was allegedly added to give the headphones more weight, and served no other purpose. Metal was 33% of the weight. Although I’ve seen the argument they help with vibrations, I’m not entirely how valid that argument is.
According to this tear down the grand total was about $20, whereas the counterfeits were estimated to cost ~$17. This sounds like the iPhone 5S which cost about $200 to make but then retails for a minimum of $650.
And yes, everyone knows that companies sell things at a profit. Unless you are an economist, you probably see something fishy with an entity that sells something excessively higher than it costs to make. This isn’t a healthy markup of $5 on a t-shirt, Beats usually retail for around $300 (200 range for basic Solos), so that’s looking at $270 profit per set. Yeah, yeah, yeah, they had to pay some people to design it and they surely had to pay a legion of marketers to market it. But Andre Young isn’t the first “hip-hop billionaire” because he sold Beats at a reasonable price: he’s a hip-hop billionaire (err well Hip-hop 700 millionaire) because he knew how to use all the consumerism tricks in the book.
Apple and Beats follow the same gospel: pump up an idea, an emotion, a feeling, a brand. After that, sell overpriced consumer goods at a gross profit. Their marriage was evitable, it’s no wonder that Apple purchased Beats Electronics for $2.6 billion in cash and $400 million in Apple stock. Beats Co-founder Iovine said that he felt that Apple and Beats belonged together, he further said “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology”. AKA, sell branded identities, add in some copper wire and then harvest an avalanche of profit.
Dr. Dre et al basically invented the $300+ headphone market, the “premium” market.
I want to wind down this discussion of Beats, by getting at the most common complaint against Beats, they aren’t even that good. But I also want to note that the quality angle is irrelevant, people may say they are buying Beats for quality, but fashion and coolness is typically driving the bus when it comes to buying Beats.
Is quality subjective? Maybe at the individual level, but at the aggregate we start seeing some trends. TIME Magazine rated them near the end of the pack, actually 17th out of 18th. They didn’t just pull out a number, they weighted their reviews with an aggregate of ratings to generate their scoreboard.
With apologies to celebrities, NBA players, and extreme sports athletes around the globe, our analysis was not kind to Beats by Dre or Skullcandy.
Audiophiles hold nearly universal disdain for Beats, pop your head into a audiophile community, tell them you are thinking of dropping a few hundred on some shiny Beats, watch the community collectively facepalm. Some communities will offer a battery of alternatives, whereas others will savagely maul you for suggesting something as barbaric as Beats.
Beats return fire, Luke Wood, president of Beats Electronics says that it’s all subjective. He buttresses his claim that himself, Iovine, Dre, have spent thousands of hours in the studio and know what they’re doing.
Beats, master of marketing, conjurer of phantom quality, can just wave their arms at the end. Dismiss the critics they cry, your ears are all that matter, the legion of criticism is off the mark because we are studio gods and they are mere haters standing outside the gates of musical mastery.
But as we can quite see, even with a shallow investigation that Beats are nothing more than some pretty headphones with some “extra bass”. If you wanted to be frugal you would stay far away from Beats by Dr. Dre, if you wanted to avoid the corporate pitfall of being fleeced for a couple extra hundred dollars, stay away too. If your self-esteem and self-image is made or broken based on a purchase of Beats, well I suppose you have some soul searching to do.
The Frugal Nexus 