Beats CEO Jimmy Iovine Pitched Steve Jobs on Subscription Music Service

[MacRumors]

In a new interview with AllThingsD, Beats Electronics CEO Jimmy Iovine reveals that he is preparing a subscription music service. Although he isn't revealing details yet, he does say that he started pitching the service to Steve Jobs in 2003.

In 2002, 2003, Doug [Morris, former Universal Music head] asked me to go up to Apple and see Steve. So I met him and we hit it off right away. We were really close. We did some great marketing stuff together: 50 Cent, Bono, Jagger, stuff for the iPod -- we did a lot of stuff together.

But I was always trying to push Steve into subscription. And he wasn't keen on it right away. [Beats co-founder] Luke Wood and I spent about three years trying to talk him into it. He was there, not there ... he didn't want to pay the record companies enough. He felt that they would come down, eventually.

I don't know what [Apple media head] Eddy Cue would say -- I'm seeing him soon -- but I think in the end Steve was feeling it, but the economics...he wanted to pay the labels [for subscriptions], but [the fees were] not going to be acceptable to them.

Recently, music streaming services like rdio, Pandora and Spotify have become increasingly popular and Apple is rumored to be working on a Pandora-like "iRadio" streaming service. Iovine mentions that his streaming service would be heavy on curation, like Pandora, rather than simply giving users access to millions of songs like Spotify. Apple's rumored streaming service is said to take the same approach, which makes sense if Jobs did like Iovine's pitch.

Beats and Apple do have a fairly close relationship already, as Apple retail stores tend to use Beats by Dre headphones to demo iPods and other devices.

Article Link: Beats CEO Jimmy Iovine Pitched Steve Jobs on Subscription Music Service

[fruitpunch.ben]

Originally Posted by MacRumors

Apple's rumored streaming service is said to take the same approach, which makes sense if Jobs did like Iovine's pitch.

That would make the service completely useless for me and so many people. I just want to stream all iTunes store's music for a monthly fee. Can it really be so hard? Especially because Apple doesn't see iTunes as a significant revenue source, it is meant to drive sales of hardware, so they do not need high profit margins on such a venture. And before you say "that's un-Apple-like" remember that the iTunes store only just broke even for its first few years - its only now that it has huge revenues. So the streaming service can start the same way, break even, and then as profitability increases, it can make more of a profit without raising fees

[basesloaded190]

Originally Posted by fruitpunch.ben

That would make the service completely useless for me and so many people. I just want to stream all iTunes store's music for a monthly fee. Can it really be so hard? Especially because Apple doesn't see iTunes as a significant revenue source, it is meant to drive sales of hardware, so they do not need high profit margins on such a venture. And before you say "that's un-Apple-like" remember that the iTunes store only just broke even for its first few years - its only now that it has huge revenues. So the streaming service can start the same way, break even, and then as profitability increases, it can make more of a profit without raising fees

iTunes brought in 7.5 billion in revenue for 2012, so I would beg to differ.

[fruitpunch.ben]

Originally Posted by basesloaded190

iTunes brought in 7.5 billion in revenue for 2012, so I would beg to differ.

After you quoted me I added this:

And before you say low profit margins are un-Apple-like" remember that the iTunes store only just broke even for its first few years - its only now that it has huge revenues. So the streaming service can start the same way, break even, and then as profitability increases, it can make more of a profit without raising fees

[cgc]

Originally Posted by basesloaded190

iTunes brought in 7.5 billion in revenue for 2012, so I would beg to differ.

That was apps, not music downloads. I don't see why Apple can't do both (e.g. sell outright and stream for monthly fee).

[AppliedMicro]

Originally Posted by cgc

I don't see why Apple can't do both (e.g. sell outright and stream for monthly fee).

Isn't that what they are already doing?

First selling you music outright on iTunes.
And then charging you a monthly* fee to stream to you with iTunes Match?





* OK, so the fee is yearly, not monthly

[Add-Delay]

The problem with the streaming services is that the artist gets absolutely jack. That might not matter so much for chart topping pop artists who have countless additional revenue streams (huge concerts, endorsements, appearances, etc.) but for the majority of artists who have to survive on less than a traditional 9-5 job it matters a lot.

According to this article by Damon Krukowski (of Galaxie 500 and Damon & Naomi), to make the same amount of money as selling one LP they need 47,680 plays on Spotify and an incredible 312,000 plays on Pandora.
http://pitchfork.com/features/articles/8993-the-cloud/

[cgc]

Originally Posted by AppliedMicro

Isn't that what they are already doing?

First selling you music outright on iTunes.
And then charging you a monthly* fee to stream to you with iTunes Match?





* OK, so the fee is yearly, not monthly

They're doing the same thing as Amazon's AutoRipper but not streaming where I can pay monthly or yearly and listen to anything I want, not just the music I bought.

[charlituna]

Originally Posted by fruitpunch.ben

That would make the service completely useless for me and so many people. I just want to stream all iTunes store's music for a monthly fee. Can it really be so hard?

Yes. The labels make it so. They have control nd do everything they can to keep it or get scads of cash for it. Same with the studios and networks

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Originally Posted by basesloaded190

iTunes brought in 7.5 billion in revenue for 2012, so I would beg to differ.

But what were the costs required to do that.

----------

Originally Posted by krravi

I wouldn't be buying Macs if I was one.

I am and I still bought a Mac. Why? Because building an AVID rig was even more expensive. So I took a gamble and learned final cut, shake etc instead.

And it paid off.

[ronwasserman]

To Jimmy and Doug.

Remember in 1999 when you signed my band because we were the biggest thing online?

Remember when you asked me what the future of the music business would be and I said 99 cent singles?

Remember how you both told me that (as well as subscription) services would never happen in your lifetime?

Glad to see you woke up during your lifetime.

It's too late now to implement your ideas in a way that would be as profitable as they would have been a decade ago.

Good Luck!

Ron

[krravi]

Steve has always been a stickler for money.

[Bobtodd]

The only thing "Beats" bring to the Apple store is thieving scum who steal the **** out of them.

[FreeState]

Originally Posted by Bobtodd

The only thing "Beats" bring to the Apple store is thieving scum who steal the **** out of them.

And incredibly bad headphones that have been marketed brilliantly.

[HenryDJP]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

So very true!

[gorskiegangsta]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

This. Don't you just love how Iovine declares love for high quality sound and still continues his BS with Beats.

[wizzerandchips]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

Glad you said that, I was going to spend £130 on a set, then I purchased the new apple ear pods, I think there great.

[Sy7ygy]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

Armchair expert I see!

Have you ever OWNED a pair of Beats? They are NOT 'incredibly bad headphones' - only such an absurd statement from somebody who hasn't.

I own a pair of iBeats & Pro's - BOTH of which are stunning pieces of kit. Overpriced? Everything is overpriced.

I suppose you think Bose products are awful too, huh?

[scott911]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

disappointed to see apple partnering with beats...
I often see what I assume are beat rip offs on craig's list, and can't help but thinking the knock offs must sound more accurate that the genuine beats.

meanwhile - companies that do it right - Grado - sell superior product at a fraction of the price, and are nearly unknown.

[rendevouspoo]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

You could say the same for some Apple products.

[Howdee]

Originally Posted by FreeState

And incredibly bad headphones that have been marketed brilliantly.

A lot of people also say the same about iProducts in general. lol Great marketing, branding, great housing, but the guts are sub-par.

[ConCat]

Originally Posted by krravi

Steve has always been a stickler for money.

Aren't we all.

[krravi]

Originally Posted by ConCat

Aren't we all.

I wouldn't be buying Macs if I was one.

[DJJAZZYJET]

I would even go as far to say that the apple EARPODS sound better than the beats headphones they are so bad.

[iGrip]

Originally Posted by ConCat

Aren't we all.

Some more than others.

I think that you are trying to minimize the money-grubbing aspect of Steve's personality by responding that "all" people are similar in that regard.

I would disagree. IMO, the one defining aspect of Steve was his lust for the big bucks. When Woz was a guy who was content with inventing incredible technology, Steve was a guy who wanted nothing more than to monetize his friend's ideas.

What made Steve great was his ability to be a profit-generating CEO of a huge behemoth of a corporation. That is his defining characteristic: he knew how to turn a buck.

[Solomani]

Originally Posted by krravi

Steve has always been a stickler for money.

He would have been a lousy businessman if he wasn't.

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Originally Posted by dkersten

I don't like Beats mainly because of all the wanna-be rappers that wear them

I'm not bothered about the ghetto image. All I wanna know is, dollar for dollar, are those Beats headphones actually a better value than the other big-name competitors like Bose headphones or Sennheiser?

(never tried a Beats headphone before)