“I can’t believe I’m this lucky,” Jimmy Iovine joked on Wednesday (Oct. 15), reacting to the $10,000 fine lobbed last week against an NFL quarterback for wearing Beats by Dre headphones to a post-game press conference.
Iovine reacted to reports by Bloomberg News that Beats Electronics, the company he co-founded with Andre “Dr. Dre” Young, had gotten the equivalent of $2.14 million in media exposure following the NFL’s move.
“You can’t buy what we got,” he said. “How valuable is it for the whole country to say, ‘These guys are cool’?”
The NFL, which has an exclusive endorsement deal with Bose, levied the fine against San Francisco 49ers quarterback Colin Kaepernick, who sported a pair of hot-pink Beats by Dre headphones to honor Breast Cancer Awareness month.
“The NFL has longstanding policies that prohibit branded exposure on-field or during interviews unless authorized by the league,” according to a statement from the NFL after the incident.
Iovine is the former chairman of Interscope, Geffen and A&M and former CEO of Beats Electronics, which he and Dr. Dre sold to Apple in May for $3 billion. He made his remarks during an hour-long, freewheeling session in New York hosted by the University of Southern California.
In May 2013, Iovine and Dr. Dre pledged $70 million to the university to launch the USC Jimmy Iovine and Andre Young Academy for Arts, Technology and the Business of Innovation, which opened this fall.
“Dre and I didn’t go to college,” Iovine said to those gathered at the Time Warner Center for the 2014 USC Global Conversation. The two knew little about higher education, he said. “We didn’t even know about lower education.”
Among those gathered to hear his remarks was Doug Morris, chairman/CEO of Sony Music Entertainment and — as Iovine noted several times — his former boss, when Morris was CEO of the Universal Music Group.
Iovine was introduced by James G. Ellis, dean of the USC Marshall School of Business, who recalled that the USC Iovine Young Academy resulted from a provocative question that Iovine posed in an earlier encounter with USC president C.L. Max Nikias.
“He asked one question,” recalled Ellis. “How would you train the next Steve Jobs?”
As Iovine saw it, the challenge was to create an educational setting that emphasized an understanding of both technology and culture, a mix personified by Jobs as leader of Apple. “He created something much more than the Mac,” said Iovine, “a blending of the liberal arts and technology that will be around forever.”
The music business veteran and entrepreneur offered an insightful and frequently humorous overview of his career — and his own take on music business history — in a conversation with Erica Muhl, dean of the USC Roski School of Art and Design and executive director of the Iovine Young Academy.
“Around 2000, I smelled trouble,” he said, recalling the rise of online peer-to-peer file-sharing services that eventually led to dramatic declines in physical music sales. “I called up [Morris] and said, ‘We are screwed.'”
“The record industry [then],” he added, “had zero feel for technology and the internet.”
Iovine recounted his conversion to technology as a Brooklyn kid’s eternal quest for street cred. “I got into music [so I] could be cool by association,” he said. After meeting Jobs, he recalled thinking, “Oh, the party is at this guy’s house. This is John, Paul, George, Ringo, Mick and Keith in one guy.”
As his contract with Universal Music Group came up for renewal in 2004, Iovine was eager to leave his record label to launch a technology company. He recalls thinking: “I’m not going to be the guy who sold the last CD.” He praised Morris for making it possible for him to launch Beats Electronics while remaining at the helm of Interscope.
And that venture with Dre? It began when the two former recording engineers were exercising on a beach in California. Iovine recalls Dre saying, “My lawyer, he wants me to sell sneakers. What do you think?”
Instead, the two launched Beats Electronics in 2006. And the strategy behind Beats by Dre headphones was simple: “Let’s take this piece of hardware and give it a soul.”
Muhl noted that the Harvard Business School was preparing a case study of the product placement and celebrity branding deals that drove Beats marketing.
“That’s pretty funny to me,” said Iovine. But he acknowledged that he and Dre sought to expose the Beats product among their friends. “We’re fortunate,” he quipped, “to have friends like LeBron James.” But the technology behind the headphones was key. “Those athletes are not going to wear my headphones because I asked them,” he said.
In the wake of the decision of Apple CEO Tim Cook to buy Beats for $3 billion, “Obviously I think he’s pretty smart,” said Iovine, drawing laughter. But Cook has continued to make smart moves, he noted, such as recruiting Burberry CEO Angela Ahrendts in October 2013 as a senior VP in charge of retail and online store — ahead of Apple’s recent introduction of its new watch line.
At USC, Iovine said, the university’s leaders “did exactly what Dre and I did and what Steve Jobs did. I walked [in] with something that was completely outside the box of what was going on in education. They looked at me and Dre, who had no experience in higher education, and they just said, ‘We’re going to do this.’
“And yeah, you could say, ‘You give us $70 million and we’ll do anything,'” said Iovine, as the audience laughed. “But that’s not true. They moved quickly. They got it right. They had a feel for every aspect of what we were trying to do. They busted through bureaucracy until things happened at our speed. [They] moved like Jagger.”
Muhl predicted the cutting-edge approach of the USC Iovine Young Academy would spread through higher education. “The vision you came to us with sparked a fire of change,” she said.
“You guys took it and ran with it,” Iovine replied. “I hope to God this [approach] spreads to other schools. I really think that education is ground zero for fixing anything.”