When we look back on the 2000s the same way we do the ’90s and pick out the biggest pop culture staples and technological tidbits, Beats by Dre headphones will no doubt supplant the Tamagotchi and the Sony Walkman.
A collaborative effort between hip-hop legend Dr. Dre and music industry veteran Jimmy Iovine, Beats by Dre headphones were a sensation when they first came on the market in the late ’00s and the company soon took over the headphones market.
In 2012, NPD Group reported that Beats’ market share of the US high-end headphones domain was a staggering 64 percent. Consumers were more than happy to fork over almost $500 for the headphones beloved by their favourite celebrities and sports stars.
Most didn’t even know just what set the headphones apart from their competitors (allegedly, they feature the EQ settings preferred by Dre himself) besides the flashy design, but they knew they wanted a pair badly.
This was despite the fact that anybody who knew anything about headphones or audio quality agreed that Beats headphones were rubbish. TIME Magazine famously ranked Beats dead last in a survey of 18 high-end headphones.
Then in 2015, reports surfaced that the headphones which cost up to $480 to purchase were super cheap to produce. And when we say super cheap, we mean the average pair of headphones cost a total of $14 to manufacture.
Of course, one has to consider the other costs involved in getting a product into the hands of consumers, including Beats’ no doubt remarkable marketing budget, but even that would hardly justify the incredible markup on Beats headphones.
But it’s the marketing that will go down as the reason Beats Electronics will be taught in business schools for decades to come. As Pulse Radio noted, Dr. Dre and Jimmy Iovine may have ripped us all off, but they did it masterfully.
According to their interview with Iovine, Beats’ particular strategy was to market the shiny red headphones as if they were a music artist. The headphones were the star of the show and would be sold as if they were “Tupac or U2 or Guns N’ Roses”.
The headphones began popping up in music videos by mega-stars like Lady Gaga, showing up in scenes where viewers got the uncanny sense that everyone in the frame, including the artist themselves, had been positioned around the headphones.
Free pairs were given out to influential celebrities like NBA star LeBron James, who requested 15 extra pairs to give to his teammates on the 2008 US men’s Olympic basketball team. Beats happily obliged.
All of this, in addition to cross-promotion and connectivity with other top tech brands like Apple, HP, and even Chrysler, aided Beats in hocking their $14 headphones at almost $500 a pop – and we all fell for it.
This article has been republished from an earlier date