Apple Music's Jimmy Iovine: 'Streaming Services Have a Bad Situation'

[MacRumors]

Apple Music executive Jimmy Iovine sat down for an interview recently with Billboard to talk about The Defiant Ones, a four-part documentary series that focuses on the careers of both Iovine and his long-time partner Dr. Dre.

During the interview, Iovine commented on the state of the streaming music industry and the precarious position of companies focused solely on streaming music, like Spotify.

"The streaming services have a bad situation, there's no margins, they're not making any money," he said. "Amazon sells Prime; Apple sells telephones and iPads; Spotify, they're going to have to figure out a way to get that audience to buy something else. If tomorrow morning [Amazon CEO] Jeff Bezos wakes up and says, 'You know what? I heard the word "$7.99" I don't know what it means, and someone says, 'Why don't we try $7.99 for music?' Woah, guess what happens?"

Streaming music, says Iovine, is "fine" with major companies like Amazon, Apple, and Google, but it's "not a great business" for standalone companies like Spotify. "They have to figure out a way to show the road to making this a real business," he said.

Iovine went on to explain that the record industry doesn't yet know "where technology is gonna go," and that things could shift at any moment with the debut of software and hardware breakthroughs. Referencing the 8-track, cassette tape, and CD, Iovine says companies need to adapt and "figure out their role."

According to Iovine, streaming services that offer content for free undermine the music industry and present a major problem that's not something television providers like Netflix have to deal with. Streaming services all offer the same general content, making it difficult to convince customers to pay when content is available elsewhere at no cost.

"So Netflix has all that original stuff and it's $11.99," he said. "Music, everybody has everything, plus the free tiers, every song is on YouTube, so how can they charge $11.99 to a consumer? I'm like, no. I'm gonna buy this and get the music for free.... It's a massive problem."

Iovine's opinion on free music is likely one of the reasons why Apple is focusing heavily on exclusive content. Apple has purchased the rights to air multiple exclusive documentaries, and the company is working on exclusive television shows much like Netflix, with the aim of drawing in customers with original content.

So far, two shows have premiered exclusively on Apple Music: Planet of the Apps and Carpool Karaoke: The Series. Apple has other television shows in the works, including an Amazing Stories reboot with Steven Spielberg and a morning talk show drama that will star Jennifer Aniston and Reese Witherspoon. Apple has not yet confirmed these new shows will be exclusive to Apple Music, but it's a possibility, and it's also possible Apple is planning on some kind of future service that offers both music and television content.

Jimmy Iovine's full interview, which goes into further detail on streaming services and covers The Defiant Ones, can be read over at Billboard.

Article Link: Apple Music's Jimmy Iovine: 'Streaming Services Have a Bad Situation'

 

[gatearray]

This guy is just a smarmy creep.

 

[BornAgainMac]

Make it so Number #1.

 

[OldSchoolMacGuy]

He makes a great point. Others could really really hurt Spotify if they choose to drop their prices. Spotify isn't making much in the way of profit, despite increasing their subscribers.

 

[krause734]

He makes a good point. Internet radio is like bottled water.

 

[bluemonkeyguy]

Someone seems a little jelly of Spotify lool

 

[Matt Leaf]

This is an incredibly fascinating arena. I really feel the music industry needs saving to some degree. Artists just don't have the support they used to, and as a result, there's less mind-blowing music. Apple and Spotify and everyone else are all in major positions to shift away from streaming models and into something lucrative that would benefit everybody. Is it physical? Is it a blend between physical and software media? There's got to be some way out.

 

[FightTheFuture]

Someone seems a little jelly of Spotify lool

Did you read the article?

 

[KazKam]

TL;DR... "Our business model is correct. Our competitor's business model is dumb and isn't allowing us to charge our customers more for the same content."

Also, they really ned to keep this guy out of the public eye. He comes off super self-righteous, condescending, and I don't know exactly why, but a little creepy.

 

[OldSchoolMacGuy]

Someone seems a little jelly of Spotify lool

Doesn't seem so at all. He's absolutely spot on. If Apple or Amazon decide to drop their prices on streaming services, they will really hurt Spotify.

Amazon and Apple both have add-on devices that make them far more on margins along with their streaming. Spotify has none of that.

Remember that Apple has done in a year what it took Spotify more than 5 to do. I don't see how Apple would be jealous of far outperforming Spotify when it comes to growth and certainly in profitability.

 

[bruinsrme]

The record industry doesn’t know where technology is going to go?
I’m going to take a guess:
Vinyl- no
8-track - no
Cassette - no
CD - no
FM - no
Buying on line - maybe
Streaming - most likely

Concert tickets - crazy prices
Ticketmaster will get outrageous fees for some kind of service.

 

[OldSchoolMacGuy]

TL;DR... "Our business model is correct. Our competitor's business model is dumb and isn't allowing us to charge our customers more for the same content."

That's not at all what he said. What was actually said was that Spotify is in a dangerous place because they have nothing other than streaming to offer. If something happens tomorrow and Apple or Amazon drop the price of their streaming service to $1.00 a month, Spotify is out of business. Google, Amazon, and Apple would live on, as they have something else to offer. Spotify doesn't.

Iovine has been in the business a long time and understands it. It's a business that has seen a lot of change in recent years and throughout history. Betting everything on streaming remaining the only way is a fools bet. It'd be much smarter to place bets in more than just a single place.

 

[swingerofbirch]

Spotify has something Apple used to: a great user interface. (On the desktop at least. I'm a luddite and rarely use phones for anything but making calls.)

 

[wlossw]

I would pay to NOT have to watch "Planet of the Apps" or "carpool karaoke". I'm not saying that exclusive content isnt attractive, but Netflix and HBO have GOOD exclusive content, and frankly, a the large catalog of video content makes these services a place i go to watch a video. Apple music is not a place i go looking for video because I don't like the stuff they have, and there isn't much of it anyway. I say this as someone that pays for prime, netflix, hbo, and apple music. I also have an extensive plex library and premium cable...

 

[acctman]

All of his points are spot on... he's correct, yet a lot will automatically assume Apple / Jimmy is jealous of Spotify yet all he is doing is stating the fact that Spotify needs to figure out how to get users to purchase something else. Music is free... youtube, free via Amazon Prime, Pandora, Internet Radio, etc.

 

[Swift]

Spotify is not an independent company. Without the contracts with the music industry, they have zero business.

 

[Aluminum213]

Where does he think music will go from streaming? He’s talking out of his behind most of the time
[doublepost=1511991609][/doublepost]

I would pay to NOT have to watch "Planet of the Apps" or "carpool karaoke". I'm not saying that exclusive content isnt attractive, but Netflix and HBO have GOOD exclusive content, and frankly, a the large catalog of video content makes these services a place i go to watch a video. Apple music is not a place i go looking for video because I don't like the stuff they have, and there isn't much of it anyway. I say this as someone that pays for prime, netflix, hbo, and apple music. I also have an extensive plex library and premium cable...

Who is forcing you to watch those shows?

 

[-BigMac-]

The 2 original apple content ventures - both flopped hahaha...

 

[Smearbrick]

I watched the entirety of "The Defiant Ones". I was left feeling as though Dr. Dre was a talented visionary and Jimmy Iovine was one of those cats who just happened to be in the right place at the right time his entire life.

I really don't have much appreciation for "producers". Truth be told, with the level of fame attained by Fleetwood Mac, it was a bit of a no-brainer that Stevie Nicks solo career was going to be huge, at least for the first album.

Producers like Jimmy Iovine and Rick Rubin are overrated.

 

[Swift]

I would pay to NOT have to watch "Planet of the Apps" or "carpool karaoke". I'm not saying that exclusive content isnt attractive, but Netflix and HBO have GOOD exclusive content, and frankly, a the large catalog of video content makes these services a place i go to watch a video. Apple music is not a place i go looking for video because I don't like the stuff they have, and there isn't much of it anyway. I say this as someone that pays for prime, netflix, hbo, and apple music. I also have an extensive plex library and premium cable...

Frankly, I suspect CarPool Karaoke and Planet of the Apps convinced Apple that they needed to put actual movie and TV guys in charge. More recenthires, like the two Sony execs who produced some big hits, and Stephen Spielberg to do new episodes of Amazing Stories has a much better chance.

 

[Michael Goff]

Someone seems a little jelly of Spotify lool

I don’t know why you’d think that considering Spotify isn’t a profitable business.

 

[mudflap]

I still want to own my music. I don't need ALL THE MUSIC. Because 90% of it is garbage.

 

[Swift]

I watched the entirety of "The Defiant Ones". I was left feeling as though Dr. Dre was a talented visionary and Jimmy Iovine was one of those cats who just happened to be in the right place at the right time his entire life.

I really don't have much appreciation for "producers". Truth be told, with the level of fame attained by Fleetwood Mac, it was a bit of a no-brainer that Stevie Nicks solo career was going to be huge, at least for the first album.

Producers like Jimmy Iovine and Rick Rubin are overrated.

Funny, though, that such a string of great artists wanted to work with him. The lineup is remarkable, at every level. A producer in the studio is a great combination of psychiatrist and super-tech. It ain't easy.

 

[hawkeye_a]

I don't use a streaming service. Never been a fan of the concept. I don't think Apple belongs in this arena. I dont like the idea of other business units(hardware) being used to prop up(subsidize) the operation of AppleMusic. I think Tim Cook wasted $3bn of Apple's money on Beats. IMHO

 

[1498032]

This is an incredibly fascinating arena. I really feel the music industry needs saving to some degree. Artists just don't have the support they used to, and as a result, there's less mind-blowing music. Apple and Spotify and everyone else are all in major positions to shift away from streaming models and into something lucrative that would benefit everybody. Is it physical? Is it a blend between physical and software media? There's got to be some way out.

The only part of the industry that "needs saving" are the producers and labels who got rich by acting as gatekeepers to what was, in the past, an expensive product to produce, distribute, market, and sell. In 2017, that is no longer the case, and we should all be content with letting that industry die.

It is incredibly easy for musicians to make, record, and distribute music these days. For MOST musicians, the industry has never been better. It is worse ONLY for those lucky few (VERY few) who were allowed into the big boys club in the past.

The idea of going back to physical media is simply laughable. Are you trolling?