“These aren’t strange bedfellows at all,” said Peter Csathy, chief executive officer of entertainment law firm Manatt Digital Media Ventures. “Steve Jobs really drove the relationship with the music industry. The executives at Apple and Beats know each other very well, and there’s a comfort level there.”
Apple became interested in doing a deal with Beats after executives were impressed by Beats Music, the online music streaming service unveiled earlier this year, which was rapidly converting users into paying subscribers, said a person with knowledge of the talks, who asked not to be identified because the discussions are private.
Beats is also well known for its high-end headphones business, which is profitable, and Apple plans to work with the company to improve the quality of design in future versions, this person said.
Apple hasn't changed its iTunes music purchasing service since its inception -- and in a time where music downloads are declining and streaming services are rising, a change towards a streaming service would make sense.
Dr. Dre and Iovine have also been seen around Apple's campus in Cupertino, and both could take on senior roles at Apple. While no deal has formally been announced yet, we could see a formal announcement sometime this week according to many different reports.