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

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.



Top Rated Comments

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8 months ago
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.
Rating: 37 Votes
8 months ago
This guy is just a smarmy creep.
Rating: 37 Votes
8 months ago

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.
Rating: 28 Votes
8 months ago
I still want to own my music. I don't need ALL THE MUSIC. Because 90% of it is garbage.
Rating: 25 Votes
8 months ago

Someone seems a little jelly of Spotify lool

Did you read the article?
Rating: 21 Votes
8 months ago
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.)
Rating: 18 Votes
8 months ago

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?
Rating: 17 Votes
8 months ago
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...
Rating: 16 Votes
8 months ago
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.
Rating: 16 Votes
8 months ago
Someone seems a little jelly of Spotify lool
Rating: 11 Votes

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