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.
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