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Code/red: Apple and Beats -- Nothin' but a T Thang

Plus: Why Apple didn’t sign that big net neutrality letter.


Will Carlyle Group Tip a 40 to Beats Investment?

If Apple’s planned acquisition of Beats Electronics does close, Dr. Dre won’t be the only one celebrating. Private equity outfit The Carlyle Group, which invested about $500 million in Beats last September, stands to make upward of $1 billion on the deal if it goes through at that $3 billion+ price. Not bad for an investment that’s not even a year old yet.

Man, Did Steve Jobs Have Street Cred or What?

Dr. Dre to Steve Jobs in 2003: “Congratulations on the iPod. No more carrying big duffle bags of CDs.”

Why Didn’t Apple Sign That Net Neutrality Letter? (Spoiler: Wasn’t Asked)

More than a hundred Internet companies signed a letter asking the Federal Communications Commission to reconsider Tom Wheeler’s proposed net neutrality plan. Among them: Google, Microsoft, Amazon, eBay, Facebook, Twitter and Netflix. Conspicuously absent from that list: Apple. Why didn’t the company add its name to the list? It was never asked. Marvin Ammori, board member at Engine Advocacy, which helped pull together the letter and its signatories told Code/red that the document originated with a group of startups. Larger companies, like Google and Facebook, signed on late in the process, and Apple was never approached. An Apple spokeswoman declined comment on the letter.

This Never Would Have Happened if Steve … Nevermind.

Something else to keep in mind about this Apple-Beats deal: Beats CEO Jimmy Iovine has been trying to sell Apple on a music-subscription service for years. He was never able to make it happen with Steve Jobs. Evidently, he’s having an easier time with Tim Cook. “I was always trying to push Steve into subscription,” Iovine said in 2013. “And he wasn’t keen on it right away. … I spent about three years trying to talk him into it. … He didn’t want to pay the record companies enough. He felt that they would come down, eventually. I don’t know what [Apple media head] Eddy Cue would say — I’m seeing him soon — but I think in the end Steve was feeling it, but the economics … he wanted to pay the labels [for subscriptions], but [the fees were] not going to be acceptable to them. … Steve called me in once. He said, ‘You know something, you should feel really good. You’re the only guys from software that ever built a piece of hardware successfully.’ That means that we can be the guys who cracked [the music subscription] code as well. Because we live in both worlds. We’re actually arguably better at this than at hardware.”

Which Means Apple Could Buy Spotify With About 15 Weeks of Cash …

Andreessen-Horowitz co-found Marc Andreessen: “Apple generates ~$13.5B cash per quarter; = ~$1.04B cash per week. Can pay for Beats with 3 weeks of generated cash.”

Don’t Forget, They Also Get Dr. Dre’s Medical Expertise for the Biometrics Team

John Gruber, Daring Fireball: “Nothing from Beats looks like Apple. Not the brand, not the hardware. If this report is true, and Apple keeps the brand, how does that work? When is the last time Apple sold anything that wasn’t under its own brand? Filemaker is the only thing that comes to mind, and the origins of that arrangement are downright prehistoric. And if Apple doesn’t keep the Beats brand, what are they paying for?”

Alibaba — Like Any Big Silicon Valley Company, but With Fewer Penises

Heather Timmons, Quartz: “It’s worth noting that [Alibaba’s] fast-growth history includes something most of its Silicon Valley rivals lack — women. Of the company’s 18 founding partners, six are women.”

Latest Netflix Original: “$8.98 Is the New $7.98”

Remember that Netflix price hike CEO Reed Hastings mentioned back in April? Well, it’s here. This morning the company said it is raising fees for new streaming subscribers by $1, to $8.98 monthly, while promising existing subs they won’t have to pay anything extra for the next two years. That’s pretty much exactly what Hastings described last month. “I don’t think a one or two dollar increase is a huge difference,” he said. “We want to get this done well, and make sure we grandfather people cleanly.”

Point, Counterpoint: SnapChat Lied About Its Privacy Practices vs. I’m Not Sure Even I Believe This, but I Will Say It Anyway

FTC: “Snapchat, the developer of a popular mobile messaging app, has agreed to settle Federal Trade Commission charges that it deceived consumers with promises about the disappearing nature of messages sent through the service. The FTC case also alleged that the company deceived consumers over the amount of personal data it collected and the security measures taken to protect that data from misuse and unauthorized disclosure.”

Snapchat: “While we were focused on building, some things didn’t get the attention they could have. One of those was being more precise with how we communicated with the Snapchat community. This morning we entered into a consent decree with the FTC that addresses concerns raised by the commission. Even before today’s consent decree was announced, we had resolved most of those concerns over the past year by improving the wording of our privacy policy, app description, and in-app just-in-time notifications.”

Consumers Are Just Going to Love Our Near-National Cable Monopoly

Guess who thinks Comcast’s* proposed $45 billion purchase of Time Warner Cable won’t create a monstrous communications gatekeeper? If you guessed “guys collecting seven-figure salaries from Comcast and Time Warner Cable,” then well done! Appearing before the House Judiciary’s antitrust subcommittee on Thursday, Time Warner Cable CEO Robert Marcus and Comcast Executive Vice President David Cohen said critics put off by the deal’s Cloverfield Creature size simply need to embrace the bigger-is-better mindset. “Greater scale will yield more robust competition and significant benefits for consumers and businesses,” Marcus said. To which Cohen added, “I think the big winner here is consumers. Our primary focus will be on consumers.”

*Comcast owns NBCUniversal, which is an investor in Revere Digital, the parent company of Re/code.

Samsung Attorney to Apple: Neener, Neener

Samsung attorney John Quinn: “Up to this point, I think Apple really hadn’t given up hope [it] could cripple Android somehow. … I’m pretty sure the Apple smartphone wars against Android are a thing with a limited future. … Years into Apple’s holy war on Android, they haven’t collected a nickel. … They’ve got to realize they’re not going to slow Android down by suing people.”

Sentences That Always End Badly, No. 142: “I Don’t Mean to Sound Sexist …”

TechCrunch Disrupt attendee who says tech should be less sexist: “You know, I’ve noticed there’s actually a lot more women here this year. Yeah, another thing I noticed — and I think this is an interesting observation — and I don’t mean to sound sexist, is, the women here are really attractive.”

Off Topic

Epic pool dunk and drawing eyebrows on babies

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