It’s that bright red cord. For music junkies that trend toward the youthful, and play their tunes loud, headphones must have that cord. It’s a not so subtle signifier that what’s cradling the wearer’s head are made by Beats Electronics, the company founded by hip hop royalty Dr. Dre and legendary music executive and producer Jimmy Iovine. Completing the dream team is Luke Wood, Beats' COO and the guy who runs the Santa Monica-based company on a day-to-day basis.
Naturally, Wood is also a music producer, and an on-again off-again guitarist with roots in ‘80s punk and ‘90s indie rock. Before he joined Beats full-time 18 months ago, Wood was chief strategy officer of Interscope Geffen A&M. Wired Business caught up with Wood, not long after Beats bought online music site MOG, and as he readied to launch the company’s latest set of headphones – aimed not at Berlin-bound DJs but jet-setting execs. Corporate types and music sites? Clearly, Beats’ ambition extends far beyond something you stick in your ears.
WIRED: As a musician, a producer and a business guy, you’ve been trying to get music to people via some digital means for a long time. Especially with a subscription model. Did you think we’d get to services like MOG and Spotify much quicker?
Luke Wood: Oh yeah. In 1994 I was at Geffen and we put an Aerosmith song up on CompuServe that managed to crash CompuServe. It was the first legitimate commercial release of an MP3 ever. It was the first time a large license company had done it. That was the beginning of the journey to get digital content to the consumer, but we weren’t ready back then.
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WIRED:__ So the ‘90s were way too early. When did you take another whack at digital music?
WOOD: It was the mid 2000s. A decade had gone by, and we had begun to socialize these ideas around digital distribution on computers and mobile phones inside the record industry. iTunes was there, the feature phone had exploded. We had moved through Napster, through LimeWire, through BitTorrent and Rhapsody. Surely the environment is robust and mature enough to do this – right? Jimmy Iovine and I thought, OK, let's go.
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WIRED__: We know how this ends. Badly, right?
WOOD: Absolutely. We were meeting with everyone, from Nokia and a lot of the handset and PC makers, to the ISPs and the cable companies. We banged on the door at Apple, Google and Amazon, trying to find champions to get people interested in flat-fee subscription music.
At the time ISPs and cable guys were seeing their revenue per user skyrocket. They really didn’t believe they needed to be in content business. And the labels weren’t prepared to take that leap; it was still a little early. The content companies were still attached to their old models and physical media.
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WIRED:__ So you pulled the plug on building a digital music service?
WOOD: Essentially. Jimmy, to his credit, got much more frustrated, much quicker than I did. He said, “I just want to go build a business that I can do A to Z.” Two months later he says, “I want to build a headphone company. I talked to Dre over the weekend and he loves it, and he wants to call it Beats.” Eighteen months ago I left Universal to go run Beats full-time.
'For my generation music was identity. I remember the first thing I did at college was set up my stereo and start blasting Minor Threat – probably explains why I had no friends. For the younger generation music was something free on their laptop.' __
WIRED:__ You guys are more than a headphone company now, but it’s hard to think of a more well trammeled part of the music business than headphones, why start there?
WOOD: If you think about the environment in which Jimmy started Beats, sound was a commodity and music was a convenience. Part of it was piracy; the world was littered with these 128 kb files. For my generation music was identity. I remember the first thing I did at college was set up my stereo and startblasting Minor Threat – probably explains why I had no friends. For the younger generation music was something free on their laptop. So that was one stress point that drove the launch of Beats.
WIRED: What about the way you guys were making music? Digital changed that as well right?
WOOD: Records were just starting to sound better, that’s the truth. We were spending more time making records and more energy. When you are dealing with 24 bit, 96 khz digital recordings, you could do things in digital in with sampling and on the bottom end that you just couldn’t do with analogue tape. I could bore you to death with how technical it was to make, for example, a record that Eric Valentine produced for the All-American Rejects. Yes, it’s a rock pop group, but the actual technical and engineering prowess that went into making that record sound the way it did, to us that was like Steely Dan on steroids.
WIRED: And did that Steely Dan on steroids sound ever get pumped through a set of decent speakers?
WOOD: No, that was the big problem. As creative people we would leave the studio hearing something that would make us feel a certain way, and our consumer devices could never capture that emotion again. I would see my friends listen to my music on laptops, or through headphones in which the technology hadn’t changed in 20 years. I watched that All-American Rejects record get consumed through laptops, watched on YouTube, consumed entirely on white earbuds. All these environments were so fractured from a sonic standpoint. It was something that was so horrible that it was comical at first, then it became an irritant and then a cancer because for us.
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WIRED:__ So you start attacking the cancer with headphones. Clearly you differentiated yourselves with a distinct design, what else do you bring?
WOOD: That’s easy. At our company everything is about sound. We feel we have a pretty educated and authoritative point of view around sound. We are maniacal about sound. These headphones literally sound the way Dr. Dre, or Jimmy or myself hear music in the studio when we are standing at the console.
Unlike others in this business, we have a feel for what is missing from the sound. For example, it might be a listening experience where I know the lyric is sad, and I know I wanted to kill myself when I heard it in the studio the first time. But now I know it is washing over me. Or that guitar part made we want to break something, why is not making me want to break something? Then you go back and fix it in the hardware. That is how we are different.
WIRED: Where does the Beats moniker go next?
WOOD: We really look at music as three distinct chapters. The last part of the value chain in consuming sound is the transducer, the speaker. We started with the headphone and now we are getting into other speakers. The middle part is the playback device, which is what we are doing with Beats Audio built into devices. We’re working with Hewlett Packard, HTC, and others there. That is fixing the playback device itself.
The first part of that music story is the actual discovery and consumption of music, and with the acquisition of MOG we are starting to do a lot of deep thinking of what does that become and what does it mean. The truth of the MOG acquisition is that we really love the service as fans. What it will become? We’ll see. I wish I could tell you want are blueprint is, we are working hard to figure that out, But I can tell you that we believe how you acquire the music is as important as how you listen to it.
WIRED: I am guessing we are going to see you get back to the creative side through Beats as well. You guys won’t be able to help yourselves
WOOD: That is a very good way to put it. Are you saying we have no discipline? I would agree.
