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Exclusive Interview: Noel Lee Talks Beats Acquisition and the Future of Monster

Well it’s official. Apple has acquired Beats Music and Beats Electronics. With this new acquisition, Apple hopes to breathe some fresh blood into Cupertino while still creating innovative products and music services – all with new Apple employees Jimmy Iovine and Dr. Dre along for the ride. The final purchase price? $2.6 billion, with $400 million that will vest over years to come. But the big question is, is Cupertino ready for Compton?

While this may be a perfect marriage in the eyes of Apple and Beats, there is one partner that rode the long and bumpy road from the beginning, but is not mentioned once in the Beats backstory since this story broke. Not one official press release or blurb even mentions them – and that company is Monster aka Monster Cable. Say what you will about the brand, but it was this company who were the manufacturers, and 1st wife to Beats, until their partnership dissolved.

The plastic, the overwhelming bass, the iconic design, everything you either loathe or like was in a big part thanks to Monster and their collaborative efforts with then partners Jimmy Iovine and Dre. Not all business partnerships last, and this one was over sooner than anyone anticipated.

I met with Noel Lee last week to get his side of the story. While he certainly deserves to be bitter or at least wallow a bit in self-pity. The head Monster has taken the high-road. He acknowledges due to contractual naiveté that he was essentially screwed – screwed out of reaping any of the now lusty Apple benefits. But what it comes down to now for Noel is pride. The CEO simply wants to be acknowledged in the Beats by Dr. Dre legacy. And rightfully so.

We saw the statement you had made about Beats (referencing the acquisition), and we thought it was very interesting for you to officially make a statement about how you are feeling.

Well there are two ways you could feel about it, right, I started this thing and boy am I resentful – that we didn’t get a share of what was obviously a phenomenal deal. But, we can say at this point, we don’t understand why this valuation is this high – we don’t know the other aspects of the deal, whether Jimmy is coming to Apple on a management level. Bringing some sort of cool to Apple or streaming music.

But even when you put all those together, people are saying it still doesn’t add up.

The other side of it is does Apple know the whole story – the whole thing with Beats is since we split – we are not visible or acknowledged anymore, we aren’t talked about in Beats history we really handed it over to them on a silver platter. You just don’t get companies like that for free. We have a 5 year history with them, all of our IP, our manufacturers, which we really held close, and our dealer relationships , which took us thirty years to build is what helped build that brand.

Yeah, no start-up can just walk into that.

Especially in this day in age, where retail space is so hard to come buy. Retailers are not willing to invest in start-up brands. So from that standpoint, so yeah, maybe this wasn’t a balanced outcome for us. But the other way we are taking it, from what we started to become that valuation, then we are really in a good position.

Apple can make a headphone as good as Beats, they have acoustic engineers now – a lot of them. So this has to be strategic. Beats has been a real admirer of what Apple has achieved and Jimmy has been a real big admirer of that whole Steve Jobs legacy.

They criticize Apple for getting a little stale because there is no innovation but Jimmy is not an innovator, he isn’t a product guy, he is a marketing guy. So why are they paying $3 billion for a marketing guy – that’s kind of expensive. So I like it because if Jimmy is worth $3 billion, so I can at least be worth $2 billion (Noel laughing). We are actually excited about the purchase because maybe people will start paying attention to us. Even though people are saying – “Monster, those dumb guys really got screwed.” But they don’t know the truth though…

(The subject changing to the future of the company)

We’re seeing more and more audio companies, partnering with brands like HP or Toshiba. Is that something you see in your future?

All doors are open, but we aren’t going to copy the computer model because there really isn’t much to add to the computer these days.

We tend to agree with you.

It didn’t really help HP. Would you get excited about buying a computer because of the audio company that they are working with…we aren’t really interested in that.

What we do care about is automotive and I’m a car audio gear head from the beginning. So, we have been talking to some big luxury car audio people, and what is currently out there pales in comparison to what we can do. We designed the audio system for the Lamborghini Veneno, the most expensive production car ever made – only 9 of them are made. The partnership was unveiled at CES. Volkswagen, Audi and now all the other car companies are approaching us and they want to hear more.

So any anyway, we are opening doors.

And as they say, the band played on. Noel is looking towards the future now, with Beats now a bittersweet moment in time for them. We can expect to see next generations of several of their popular headphone lines. Monster’s bold 24k over-ear headphones directly competes with the Beats Studio. The company recently released SuperStar, the world’s smallest audiophile portable speaker. Their partnership with Adidas has given birth to Adidas Originals by Monster, a collection of audio gear that focus squarely on the fitness athletic bunch. In the end, Monster is now just a mere footnote in the Beats by Dr. Dre fairy tale. Like them or not – Monster played a big part in the creation of a brand that has become a pop-culture phenomenon.

“It will be interesting to see how this all turns out.”

  • 007

    Chip Chick, stop being a monster shill, there is more to the story than Noel getting screwed, because of “contractual naivete”. This is the same company that has a large law firm on retainer, that goes around and sues everyone with the name Monster. Dig a little deeper next time and you will find that Noel could have re-upped but didn’t. Maybe it was his Ego that derailed the relationship and not because he didn’t have enough lawyers around.

  • http://www.chipchick.com Chip Chick

    We are many things, but being a Monster shill is not one of them.

  • Eric Thompson

    Didn’t HP buy beats from Monster along time ago?