How Jimmy Iovine Plans to Unite the Music Industry and Tech Sector Together

Jimmy Iovine hates free music.

The record producer and Apple Music executive blasted the “freemium” business model offered by tech companies offering music streaming services. Notably, companies offering free music streaming with ads along with paid subscriptions include Apple Music competitors, Spotify and Pandora.

This is his reason according to a report by The Verge:

“Free is a real issue. This whole thing about “freemium”, maybe at one time we needed it. But now it’s a shell game,” Iovine said. “These companies are building an audience on the back of the artist.”

It’s the unfairness of it all: music streaming services are receiving millions of profits from ad and subscription revenue while artists are living off meager paychecks.

Apple Music is a paid service – you need to pay its $9.99 subscription fee to stream music. However, the service does provide Beats 1 Radio, which is a live station that broadcasts all over the Internet.

A call to arms

Jimmy Iovine (far left) with Apple CEO Tim Cook, Dr. Dre, and Apple VP Eddy cue. Photo from Billboard.
Jimmy Iovine (far left) with Apple CEO Tim Cook, Dr. Dre, and Apple VP Eddy cue. Photo from Billboard.

Iovine is trying to rally artists, tech companies, and record labels to his cause. He thinks artists are not compensated fairly and are not earning enough for their music – thanks to “freemium” services. He’s trying to bring the music industry and tech sector together to put their foot down against these, citing that artists had to go on tours to earn money.

“Most media companies are technologically inept, and most technology companies are culturally inept,” he said. “You know, just because you go to Burning Man doesn’t make you Hunter S. Thomspon.”

He later revealed that he joined Apple after Beats was acquired, the prolific headphone-making and music streaming company he started with Dr. Dre – to figure out how to compensate everyone, including both artists and tech companies alike.

Apple music’s statistics and reviews

As of today, there are no official statistics measuring Apple Music’s number of subscribers after the three month trial period ended for users who signed up during its launch. Apple Music’s reviews have not been stellar since its release, with its subscribers citing user interface and navigation problems – something that is uncharacteristic of Apple.

However, Iovine believes that he and Apple have built something powerful enough that it could work. He later added Apple Music could quickly amass millions of users if it offered freemium services, like Spotify. However, even if Apple is exclaiming that it’s a major success, official numbers are still under wraps – much like their Apple Watch sales.

However, according to reports, Apple Music subscriptions are quickly plummeting, although Apple has refuted these reports. If reports are true, then we can safely expect the numbers to continually decrease, especially after free trial subscribers have realized they have been charged by the service for the first time.

Taylor Swift vs Apple and Spotify

A screenshot of Taylor Swift's open letter in her Tumblr account.
A screenshot of Taylor Swift’s open letter in her Tumblr account.

In any case, Iovine’s stance is an understandable one: he simply wants artists and record labels to be compensated fairly. In a report by Time magazine, Spotify pays $0.006 to $0.0084 per stream, which is not much of an attractive figure considering that its former top-playing artist, Taylor Swift, has received only $2 million in the past year. She pulled out of Spotify a year ago, believing that music should not be free at all.

Speaking of Taylor, the 25-year old singer clashed with Apple on the eve of Apple Music’s launch last June. She posted an open letter, directly contesting Apple’s move to not pay royalties to artists during the first three month trial period of every user. Excerpts from the letter states:

“Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done.”

“We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.”

She cited the plight of newbie and indie artists who are not able to support themselves in the industry. In an unprecedented move, the Cupertino-based company immediately retracted its decision and immediately revealed that it will compensate artists during each consumer’s three month free trial.

Iovine stated that he witnessed first hand how Apple CEO Tim Cook and VP of software and services Eddy Cue handled the situation. He then praised them for “moving like lightning and doing the right thing”.

Is Iovine’s stance justifiable?

Definitely. Music is more than just the audio you listen to from your earphones, but also the blood, sweat, tears, and time spent by individual artists to write and record these. It’s a form of valuable art, which means it has to be priced fairly.

Considering that Iovine was once a prolific record producer, it’s no surprise that he’s trying to make this happen.

Music streaming and the competition

Music streaming is a relatively new frontier for Apple, though it primarily upended the way we listen to music in the past decade, primarily with the iPod and iTunes. More people are resorting to streaming services instead of direct downloads – taking a toll on iTunes – considering the many benefits particularly on how it saves gigabytes of space on the devices of its users.

Apple Music is in direct competition with Spotify, Pandora, Tidal, and Rdio, who are all great services in their own right. Apple’s entry into the music streaming free-for-all has been inevitable for years after iTunes was directly affected by other services’ rise.

Apple’s aggression

Apple is known for its aggressive business practices. In a report, it even put pressure to music labels to kill off Spotify’s free streaming service. It even tackled YouTube head-on.

With Iovine’s statements, Apple’s forays into the streaming market, and the constantly improving Apple Music, Apple is seriously trying to grab a concrete foothold in the music streaming service. Though Spotify is clearly a leader in all fronts with its ad-based free streaming tier, Apple does have Jimmy Iovine in its team and him on board could drastically be a game-changer in the long run.

Apple Music is downloadable on OS X and iOS devices and has over 30 million songs in its catalog.

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