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How Beats headphones changed the audio world

By Todd Leopold CNN | 1/13/2014, 11:37 a.m.
These wireless Beats by Dr. Dre headphones offer crisp, bass-thumping sound without a cord to get tangled up in. Beats headphones now dominate the $2 billion headphone market.

Kelley Zapata loves her Beats.

The University of Georgia junior first got a pair of Beats by Dre Studio headphones for Christmas in 2008. They were a revelation, she says, especially for someone used to Apple earbuds.

"I was blown away," she recalls. She's since invested in two more.

She's not alone. The audio company's lower-case "b" is ubiquitous on the ears of listeners across the country, seen on celebrities -- Lil Wayne at a Lakers game, Katie Holmes on a movie set -- and college students.

Indeed, according to the NPD Group, a marketing research company, Beats controls 27 percent of the $1.8 billion headphone market -- and 57 percent of the market for "premium" headphones, ones that cost $99 or more. On- or over-the-ear Beats retail from about $200 to $400, so you can easily spend as much on the headphones as you can on your MP3 player or contracted phone.

That's a lot of "b"uzz.

But along with the popularity has come a backlash. Beats have been criticized for being a marketing gimmick, a bass-heavy fashion accessory not up to the kind of high-quality audio sound they promote. Zapata admits she was initially seduced by the pitch: "I'm a big Lady Gaga fan, and she had them in her music video," she says.

For audiophiles, Beats are a sacrilege. They've filled up message boards complaining about the popular cans.

"(A) Timex with Rolex's price tag," wrote one responder to a board titled "Why the Beats hate?"

"To a lot of people, the fact that someone took our hobby and our industry and vastly perverted it to the public at large borders on offensive for a variety of reasons," added another poster.

But the audiophiles might be missing the point. What Beats has done, suggests Tyll Hertsens, is expand the market for better-quality headphones -- as witnessed by the countless headphone makers jockeying for space at the International Consumer Electronics Show in Las Vegas last week.

Building on the distinctiveness of Apple's white earbuds -- which announced their wearer owned a desirable iPod or iPhone -- Beats essentially created a new niche.

"What they did was brilliant," says Hertsens, editor of InnerFidelity, a site devoted to personal audio. "They somehow knew that people were aware enough of headphones that they could make them have some cachet."

And cachet, he observes, comes with a price.

"It used to be that a $250 price of headphones were expensive. Now that's just the norm. (Beats) raised the acceptable price of headphones," he says.

Audio quality and design

With that increased price has come a renewed awareness of both audio quality and design, says Hertsens.

"In the past three years or so, headphones have gotten a lot better," he says. They're on display and available for testing; people can walk into an Apple Store and truly hear the difference, he says.

Audiophiles always prized sound quality, of course. But the headphone brands they argued about -- brands such as Beyerdynamic, Grado (which has shunned advertising in its long history) and Sennheiser -- weren't widely known among consumers, particularly in an age moving toward convenience and away from component stereo systems. Along with the omnipresent Sony, perhaps the best-known name in the premium market was Bose, and Bose had its own detractors.