Beats buys MOG: What are you up to, Dr. Dre?

Beats buys MOGBeats Electronics has purchased MOG. Beats is best known for its Dr. Dre headphones and MOG is an online music streaming service. USA Today broke the story, but wasn’t able to figure out what Beats plans to do in the music streaming market. In any case, Beats is now an audio and music platform. What are you planning, Dr. Dre? Whatever it is, it sounds good to me.

“Beats was created as a response to the complete erosion of the music experience,” says Beats’ president and chief operating officer Luke Wood. “Our whole reason for starting Beats was to try to bring emotion back into that experience. We believe music services is a vital part of that ecosystem.”

If you haven’t heard of Beats before, look around next time you’re outside. Beats by Dr. Dre re-ignited the high-end headphone market in the last few years. Here in New York, you can’t get on the subway without seeing someone rocking a pair of Beats. The brand has been rapidly expanding. Chrysler has released a car with built-in Beats integration and many HP laptops come with a big Beats button on them. The brand is so hot that smartphone maker HTC purchased a majority stake in Beats last year. Beats audio has since come integrated into all top HTC devices like the One X.

In March, our audio and video editor Caleb Denison speculated that Beats would purchase MOG and that such a purchase would give it the technology and know how to prepare its own new streaming service. While it might retain the MOG brand, it’s more likely that it’s planning something grander.

“MOG is a lot like Pandora and Spotify, only a whole lot less popular,” wrote Caleb. “The company started out as an ad network in 2005, which it later layered a streaming music service on top of in 2009. Since then, it hasn’t managed to get a real foothold on the market. What it does have, however, are a ton of deals with record companies and an existing infrastructure with experience in ad networking. Sure, Lovine could probably manage to deal with the record labels in building his own service, but why go through the hassle if he doesn’t have to? Acquiring MOG sounds a whole lot easier.”

The big question is if a re-engineered MOG will change its business model. Will it become more like Spotify and attempt to offer more free music? Currently, users who don’t pay only get a limited number of streams per month. It also doesn’t appear to have a radio recommendation option (correct me if I’m wrong), putting it at a disadvantage compared to Pandora. If Beats can attack Spotify and Pandoras’ strengths while retaining an intense commitment to high-quality audio, we could have a great new option in the streaming space. If they find a way to get MOG users to buy Beats headphones or give streamers the ability to own some music for a premium, the real money will start rolling in.

I can’t wait to see what Dr. Dre and his group can do now that they control all the hardware and software to make a complete music experience. The pressure is on.