What's behind Apple's Beats deal?

Apple's (AAPL) $3 billion purchase of Beats Electronics is a literal and figurative big deal. The acquisition, although a drop in the bucket given Apple's $150 billion in cash, is still the company's largest.

Overnight reaction from investors is positive, as the share price was up almost 1 percent this morning. But the deal also brings up sharp questions about Apple and the broader consumer electronics and entertainment industries. Things are changing and the people in charge aren't clear on what to do about it.

Industry in trouble?

Apple's acquisition of Beats is a tacit admission that it no longer has a hold on the music industry as it once did. In fact, it's a statement that the industry is in trouble. That's not speculation, but something said by both companies.

"Music is dying," said Eddy Cue, Apple's senior vice president of Internet Software and Services. Last year Apple iTunes saw the smallest number of new releases it ever had. Beats co-founder Jimmy Iovine said that the move of music from a sequenced set of songs, arranged for a particular emotional effect, on albums to ad-hoc collections of individual songs undermined the experience.

"People are not being moved by it," Iovine said. "People are going to pay for an experience. If you don't have good sound, no one's going to pay for it. People aren't going to know why it's not right. It's just flat."

Apple hasn't been able to reverse these trends, or even make a dent in them. Content is vital to the company as a way to keep consumers within the walled garden of the device/services/content ecosystem. If those walls crack, keeping hold of the regular buyers that make the financial magic at Apple happen will get ever more difficult.

Can you buy cool?

Although iPhones and Macs are popular with the school set, Apple may not be seen as so much of a "must" anymore. Some argue that the embrace of adults has pushed teens away in terms of perception. The company may have been a rebel for a long time, but eventually the Establishment absorbs all. Samsung has managed to mock Apple in ways that would have been unlikely at best just a few years ago.

One trope that has been repeated about the Beats acquisition is that Apple is trying to buy a cool infusion. But the world has proven repeatedly that you can't buy cool. You can barely rent it. And if youth still don't trust adults, then, for all its success, Beats won't infuse cool into Apple.

What Beats co-founder Dre and Iovine do offer is expertise in spotting talent and deal making. Apple faces major competition on the critical content front from Amazon (AMZN). Google also has designs on the same area and has the money to push itself forward despite its propensity to stumble in negotiations with media companies.

There is also likely hope that Iovine, in particular, will also be able to talk to video companies in a way that Steve Jobs might have been able to and that Tim Cook might not. And with the media front in turmoil, Apple -- like every other company -- will need all the help it can get.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.