HP, Dr. Dre plan new 'digital music ecosystem'

Singer Pharrell, Jimmy Iovine and Dr. Dre pose with headphones from "beats by dr. dre" made by Monster Cable. (Credit: Interscope Records)

A new alliance between hip-hop impresario Dr. Dre, Interscope chairman Jimmy Iovine and computer maker Hewlett-Packard aims to save digital music.

No, this is not an attempt to fix the record industry's business woes. The goal is to lift the sound quality of the too-often tinny tunes squeaking out of our ear buds, and it's ambitious nonetheless. HP will release premium-priced laptops, headsets and software featuring the "beats by Dr. Dre" brand sometime in the US winter, music industry sources with knowledge of the offering told CNET News.

In an interview last week, Iovine declined to discuss HP or any other company that may be involved. He confirmed, however, that he and Dr. Dre are part of a plan to reconstruct the entire "digital music ecosystem" from the sound file to the computer and culminating with high-end headsets.

Iovine downplayed the potential for the group's efforts to compete with Apple. The man who discovered rapper Eminem, said he enjoys an excellent relationship with Apple CEO Steve Jobs. In addition, the partnership would love to partner with Apple on this project as well as other consumer electronics companies, according to a source close to the company. That said the plan has all the markings of an attempt to lure away those Apple fans who possess discerning ears. Audiophiles have long lamented the drop-off in sound quality brought on by the onset of digital music.

"We have to fix the entire chain," Iovine told CNET News. "Our position is to go to all the sources and try to improve sound and educate people... We can't put anything weak in the line. Whoever puts out things that sound bad shouldn't be as cool as something that sounds great."

There's room for competitors to take on Apple by offering consumers better sound quality, according to Richard Shim, an analyst with research firm IDC. But he added that those who try it might struggle to move beyond the niche audiophile market.

"There is always an opening," Shim said. "The question is how do you take a doggy door and turn it into a garage door? How do you take something that has a small audience (the market for high quality sound) and push it out to the mainstream."

Studies by the NPD Group show that there are people willing to pay a premium for equipment and software that produce more lifelike music, said NPD analyst Russ Crupnick. But he said the research also indicates the majority of consumers are satisfied with their Apple ear buds and iTunes songs, which are now available at 256Kbps.

"Listening habits have sort of changed," Crupnick said. "If I'm spending all my time on Facebook and listening to Dr. Dre's music in the background, it's not so important that it be the best."

For HP, the partnership with Dr. Dre is part of a recent marketing trend that has seen the company cosy up to celebrities.

"HP is working to be more visible with influencers and they've been tying themselves to celebrities," said Shim, who cited the collaboration between HP and fashion designer Vivienne Tam on a mini notebook that debuted in September 2008. "In this case, HP was able to charge a premium for a low-end product. This is unique for the PC industry. It's consistent with their marketing strategy."

PC makers are following the lead of the automobile industry by shaping their sales pitch around a consumer's lifestyle, according to Shim. "Up to now, it's all been about speeds and feeds and low costs," he said. "However, now their approach has to mature. They have to attach brand awareness and emotion as well as practical use to reach a greater part of the mainstream audience."

It's not tough to see how HP and Dr. Dre can help one another. HP will lend the "beats by dr. dre" brand its tech know-how, helping give it credibility among hard-core sound enthusiasts. In exchange, Dre, who has produced hit albums for Snoop Dogg, Eminem, and 50 Cent, gives HP laptops street cred with a younger generation of music fans and computer buyers.

For the music industry, promoting higher quality tunes is a way to have greater say in how digital music is packaged and sold.

The music industry is trying to take back some control and it wants to promote high-quality audio as a new specification. But there are many standards. They want to come up with one that sticks and drive that as a standard.

Iovine said that he and Dr. Dre's efforts are not based on any attempt to save the music industry.

"I just want our product to sound better," Iovine said. "The record business committed many, many mistakes in the last 10 years, and I'm right in there. One of them was letting its product get degraded. It's one thing to let it get stolen, it's another to allow it to be degraded because then you really don't have a chance ... video games and TV quality are getting better and the quality of our work is getting lower. If that happens, then music will become disposable. That's something we can fix."

The gear produced by Dr. Dre and Iovine doesn't appear to be just another vanity project by would-be celebrity entrepreneurs. They enlisted such artists as Pharrell, Will.i.am, and Gwen Stefani for help with sound and the headphones design. They also partnered with Monster Cable. Together they produced the "Tour" in-ear headphones that were rolled out last January and have since received critical success.

"Monster Cable's headphone collaboration with Dr. Dre, the Beats, surprised us with their musical prowess back in August," wrote SlashGear last December. "While celebrity endorsements tend toward the cheesy, and Monster's products toward the over-priced, we weren't expecting much; in actual fact, they proved impressively capable."

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