Dr. Dre hints at Beats sale in exuberant party video (NSFW)
World Star Hiphop is mostly known for breaking new rap artists and posting smartphone videos of vicious fights outside of McDonalds, but today it can add "oddest news source for tech blogs" to its resume. The website just posted the following video showing Dr. Dre celebrating becoming a billionaire for unspecified reasons.
At his side is Fast and Furious star Tyrese Gibson who gleefully shouts that Forbes' recently released list of hip-hop's richest artists needs to be updated. We can't quote his exact wording due to language standards on the site. It's safe to say this video has language that isn't safe for work, unless you work at a really cool office.
Gibson wasn't far off with his prediction however; this morning Forbes released an article confirming that Apple's purchase would make Dr. Dre the richest man in rap.
A sale for $3.2 billion would nearly double the value of Dre's holdings, though capital gains taxes could take a bite out of his big payday, likely leaving him with a net worth in the neighborhood of $800 million. It's not quite enough to land on the Forbes 400, but it would easily make him hip-hop's richest man, topping current champion Diddy by $100 million.
Om has a wonderful piece up now examining the possible pros and cons for each side in this sale, with the clear advantage for Apple being the acquisition of Beat's pre-existing streaming service.
This deal is about fighting Spotify and the only way for them to justify the price is that Beats has deals with music labels that allow it to transfer streaming rights to a third party - in this case Apple. The deal does puts Apple at an advantage. Others like Rhapsody and Rdio pay a penalty - a 30 percent Apple tax is there is an in-app subscription sale. Apple can push the Beats Audio app on iTunes store to drive up subscriptions.
For Beats, this is a good escape from a seemingly tenuous situation. They don't have the cash for a worldwide rollout and frankly, the service isn't all that good compared to Spotify. With about 200,000 subscribers, they were struggling and had to buckle and agree to pay the Apple store tax (30 percent) a few weeks ago in order to get traction.
This wouldn't be the first time Apple and Dr. Dre have worked together. Dre famously video chatted with Steve Jobs about the launch of iTunes at an Apple event over a decade ago. You can watch that charmingly awkward video below.
