An Ear for Music

Key players in the headphone industry have been experiencing some upheaval in the past few months, thanks to bankruptcies, mergers, and lawsuits:

  • SMS Audio, rapper 50 Cent’s company, filed for bankruptcy in April and shut down in August. Its licensed and signature products included gear for Reebok; Disney, Marvel, and Star Wars; and 50 Cent.
  • Skullcandy announced in August that it would go private after merging with Mill Road Capital. It had previously announced that Incipio, a maker of mobile-device cases and accessories, was acquiring it, but it put that deal on hold three days before the Mill Road investment. Skullcandy has worked with properties including Paul Frank and HALO.
  • Beats by Dr. Dre’s founders Dr. Dre and Jimmy Iovine are going back to court in a two-plus-year royalty dispute with a former partner, after an appeals judge last month reversed a previous court’s dismissal of the case. The Beats by Dr. Dre brand was initially produced by Monster before being acquired by Apple in 2014; it recently settled a different case with Monster. Beats’ collaborators have included Lady Gaga, Sean “Diddy” Combs, and Alexander Wang.

Meanwhile, Monster has been dealing with the loss of the lucrative Beats business, which occurred shortly before Apple’s $3 billion acquisition of Beats. Monster had built the brand with Dre and Iovine over a period of three years. Monster continues to move forward with partnerships including Cristiano Ronaldo’s ROC Sport brand and e-sports star Johnathan “Fatal1ty” Wendel.

All of the situations listed above are unique to those companies, their founders, their business models, and their deal-making. That said, all are operating in a headset market that remains very competitive and crowded.

That description characterizes the licensed portion of the market as well, with licensors of all types active in the category. Just in the last year, some of the properties forging headset deals have included Nick Cannon (with Radio Shack), Atari (with Roam), Nick Jonas (with Sakar), action sports brand Extreme (with Otone Audio), and Toon Goggles’ animated series Eddie is a Yeti (with CozyPhones). These and other recent deals encompass all price ranges and headphone specialties, from video gaming to music listening.

Watch for Raugust Communications’ October e-newsletter, which goes out next Tuesday (October 18). The Licensing Trend of the Month takes a look at the many ways licensors are creating fresh, new assets to extend the life of their properties. If you haven’t subscribed to this free publication yet, you can do so here; catch up on previous Licensing Trends of the Month here.

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