Apple hold talks with Beats over music streaming service

Apple has held talks with Beats Electronics LLC, the audio technology firm co-founded by hip-hop producer Dr Dre and music mogul Jimmy Iovine, on a potential partnership involving Beats’ planned music-streaming service.

Apple chief executive Tim Cook met with Beats CEO Jimmy Iovine during a visit to Los Angeles in late February to find out more about Beats’ Project Daisy, a music subscription service the company announced in January, three sources told Reuters.

Apple’s internet products chief Eddy Cue, a key player in setting up the iTunes Music Store, also joined the meeting, at which Cook expressed interest in Daisy’s business model and its rollout plans, although the two didn’t discuss specifics of a deal, the sources said.

Apple spokesman Tom Neumayr and Beats declined to comment.

The iPhone maker has been widely reported to be considering a music-streaming service to complement iTunes, the largest repository of music for sale.

Beats, known for its distinctive headphones, has a partnership with Taiwanese handset maker HTC, an Apple rival.

Beats has secured $60 million in funding for Daisy from a group of investors including Warner Music owner Len Blavatnik, Fort Worth billionaire Lee M Bass, and Australian financier James Packer. The funding will bankroll the music service’s launch in late 2013.

Beats reportedly named project Daisy in honour of what it called the first digital, computerised song. At the time, it said in a press release that the service would “bring an emotional connection back to the act of music discovery”.

The meeting between Apple and Iovine was set up in January, immediately after Beats announced Daisy without explaining the upcoming project’s business model or how it plans to differentiate itself from existing services such as Spotify and Pandora.

Iovine, a music producer and “mentor” to contestants on Fox’s American Idol show, has a long association with Apple and was one of the first music industry executives to sign onto what was then Apple’s nascent iTunes initiative, announced in 2001.

In a January interview with technology website AllThingsD, Iovine said he subsequently pitched a subscription service to Apple’s late co-founder Steve Jobs in 2003, but the mercurial Silicon Valley icon wasn’t keen on it right away.

Iovine said Jobs didn’t want to pay the record companies enough, and thought the price would come down eventually.

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