James Packer has reportedly joined a group of wealthy investors in making a $60 million injection into a streaming music business owned by rap icon Dr Dre, the entrepreneur behind the successful Beats Electronics brand.
The investment is the second move by Packer outside his usual gambling interests, having already invested $5 million into a joint venture with Hollywood director Brett Ratner late last year, alongside his ecommerce investments.
According to Reuters, Beats confirmed the company has received an investment from a group of investors including Warner Music Group owner Len Vlavatnik, along with Texan oil billionaire Lee M Bass and James Packer.
The investment will be focused on the streaming music service Daisy. Recent reports indicate Beats even met with Apple to discuss a potential partnership, although it is believed nothing substantial came from the talks.
In a statement, Vlavatnik said, “Beats has the vision, the brand, the management team and now the investor group to effectively change the expectations and experience of a music subscription service”.
The focus on streaming music comes as a number of players have entered the subscription music space, as the market becomes a lucrative alternative to simply buying tracks and albums on services such as iTunes.
While Pandora has led the way for many years, competitors such as Spotify and now Daisy are becoming increasingly popular, in the same way users are paying subscription services for television sites like Hulu and Netflix.
The trend is even becoming more popular in Australia, with Spotify launching here last year and JB Hi-Fi launching its own streaming product.
Beats Electronics has been one of the most recognised brands in music over the past few years. The venture led by rap star Andre “Dr Dre” Young and Interscope Records chairman Jimmy Iovine produces consumer electronics, mainly headphones with the company’s logo – a single “b” – on the side.
Reports indicate Beats is already turning over more than $500 million a year. The company was founded in 2006, and in 2010 smartphone manufacturer HTC bought a 50.1% share for $309 million. However, it sold back a quarter of that to the founders.
Beats was recently in headlines for neglecting to sign another deal with manufacturing group Monster, which until 2012 produced the company’s products.
The business has attempted to move outside the young adult market by marketing towards professionals and older users.
The investment comes after Packer has already placed some investments in areas outside his usual interests of gambling and entertainment. Alongside his Hollywood joint venture, Packer has become more interested in ecommerce, investing in local ecommerce freight group Temando and online retailer Catch of the Day.
SmartCompany contacted Packer but did not receive a response prior to publication.
This story first appeared on SmartCompany.