“Our claims assert
that the supposed
51% purchase by
HTC was a sham so
that Beats could
end up with
complete control of
the headphone line
that had been
completely
developed by
Monster.”
CG: Whose decision was it to
announce the split?
Noel: It was Jimmy who activated
the change in control clause,
which included more than 16,000
Monster
dealers
and
subcontractors. Beats was now
buying the components and selling
the headphones, not Monster.
Monster had to work hard to
convince all these vendors to turn
over all their contacts and start
selling to Beats. We lost more than
a product, we lost relationships
and resources. We lost money. But
most of all, we lost time. You
can’t expect a business partnership
to go south the way it did. In
retrospect, I wouldn’t have
devoted so much time to the Beats
headphone line. I would have
developed our own product.
CG: What did you feel when the
Beats by Dre deal cut out
Monster?
Noel: It was anger and panic. We
took the Beats headphone line
from $0 to $1.2 billion in a very
short time. We had the biggest
market share of any headphone
company out there – bigger than
Bose, bigger than Sony, and way
bigger than Skullcandy. Then one
day, Beats said to us we couldn’t
sell Beats anymore. It was a lesson
learned. The contract was
something we agreed to that we
shouldn’t have.
CG: Without Monster, would
Beats be where it is today?
Noel: No way. When this supposed
change in control occurred, Beats
had like a dozen employees. They
didn’t have a dealer network. They
didn’t have engineering or
manufacturing. They didn’t have
distribution.
They
had
no
relationship with the retailers.
Ask them to show you what they
had before the transition from
Monster. They were selling records
and promoting headphones. You
can’t make money without a
product. If you put a product on
LeBron James’ head and he’s not
blown away, then it’s a dud. But
we put them on peoples’ heads and
we just waited for their smile.
Then they’d listen to their own
songs or an old classic and they
fell in love with the headphones. It
was a revelation for us and for the
entire headphone industry. That
product and those dealers came
from Monster. Monster was Beats.
Beats was a licensed name.
Monster was the business side.
Originally, it was Monster Beats.
It later became Beats by Dre.
Summer Issue
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