“‘I don’t believe that what exists right now is enough.’ Jimmy Iovine, who runs Apple Music — originally Beats, the music service and electronics business that he and co-founder Dr. Dre sold to Apple for $3 billion in 2014 — is on a tear about the deficiencies of streaming services, including his own,” Hannah Karp reports for Billboard. “Sitting on a couch in his sunny office at Apple’s Los Angeles headquarters, he admits he wouldn’t be here if he weren’t ‘extremely’ optimistic: ‘I believe we’re in the right place, we have the right people and the right attitude to not settle for what exists right now.’ But ultimately? ‘Just because we’re adding millions of subscribers and the old catalog numbers are going up, that’s not the trick. That’s just not going to hold.'”
“Apple Music tells Billboard that it now counts well over 30 million paying subscribers, helping fuel a 17 percent revenue jump for the U.S. recorded-music business in the first half of 2017 over the same period a year ago, according to the RIAA,” Karp reports. “The veteran record executive — who got his start sweeping out recording studios, later produced hit records for acts from Bruce Springsteen to U2, and then co-founded Interscope Records, which he ran until 2014 — is working to crack what he sees as the music industry’s biggest challenge: how to inject enough ‘soul’ into subscription streaming services so that fans will pay $10 a month instead of listening to their tunes on free services, which are also growing fast.”
Much more in the full article here.
MacDailyNews Take: 30+ million strong and growing!
SEE ALSO:
Apple Maps and Apple Music among the top 15 U.S. smartphone apps – July 24, 2017
Apple Music helps on-demand audio streaming to hit record high – July 10, 2017
Jimmy Iovine defends Apple Music’s paid-only model, claims free tier would have 400 million listeners by now – May 17, 2017
if Apple stays focused and innovate then the sky is limitless for apple music
Their enemy is services & subscription consumer fatigue. It seems everybody and his brother has a toll gate.
Speaking of services Adobe’s lop-sided monthly nut charges suck up a lot of bandwidth in a misguided all or nothing scheme. They still don’t offer a “Video Professionals” package only for a lot less. When I contacted them about this their response was “We are pretty happy with current offerings” which consist of one pro app like Premiere Pro for $20 – or everything for $50! I’ll bet they’re happy, holding people ransom with more than double the number of apps that they need or would use.
Exactly, everybody wants $10 a month- and you still get ads.
On my TV bill I do not mind paying HBO monthly because I get AD FREE original content worth watching. When I send my monthly contribution to KQED I get streaming access to quality AD FREE TV.
If it is ad supported it should be free. If it is paid it should be ad free.
On iOS games it is now in app purchases. On the Mac everybody wants to rent you software. Newspapers online want you to pay a subscription AND be subjected to a blizzard of ads.
I still do not see the value of buying Beats for almost $3 Billion. Any number of other companies from Microsoft to Real Networks, Pandora, Spotify, etc were able to do this without buying a company known mostly for crappy Bass heavy headphones popular with the Samsung phone crowd.
And we have all seen how a Rapper (Andre Romelle Young) and a hanger on (Iovine) have propelled Apple’s music service (not). iTunes has 800+ Million accounts, and that transferred to rental at 30 million is anything but an abject failure?
After the $3 Billion was pissed away and then they settled and repaired crappy speakers from Beats and god knows how much more on TV and what exactly do they have to show for it? It would be interesting to see how much this train wreck has cost so far.
Train wreck? Really? If it were, the news would be full of critiques of Apple’s disaster methinks. At the moment the worst that can be said is that the jury’s still out.
So 30 Million pay $10 a month for Apple Music and generte $3.6 billion in gross revenue. This Doesn’t include beats revenue. Seems like a good purchase to me.
I’m not sure which part of that gross revenue stays with Apple (profits) vs, licensing fees and other overhead, but I’m pretty sure it is inline with other Apple products. I can’t imagine any scenario under which the $3B investment into Beats hadn’t by now already paid itself off.
I don’t know what is the usual expectation for Apple’s acquisitions, how soon they are expected to pay off the acquisition cost, but I can’t imagine it being much shorter than three years.
Strongly disagree with your critique of Beats and Jimmy Iovine. Beats has allowed Apple to maintain a firm grip on the music industry as it provides a very large chunk of overall industry income. At the same time the music industry likes Apple because they see them as a true symbiotic business partner that wants to see it healthy and profitable instead of as a parasitic organization that is purely out for itself.
Spotify and Pandora have many times more subscribers than Apple Music but they don’t pay anything. Follow the money. Apple is in the driver’s seat.
Jimmy is right in that they need to continue to push the envelope to maintain growth. Apple is well placed to grow this into a monster service.
I’m sure Apple’s streaming business is doing OK, but I can’t imagine Apple being able to turn AppleMusic into a ‘monster’ service. Apple doesn’t have a major advantage over any other streaming service. It would seem to me that the cheapest streaming service will always have the most subscribers. Considering all the active iOS devices in service (1 billion), 30 million AppleMusic subscribers really seems like a measly number in comparison. Certainly, no one on Wall Street believes Apple can do anything worthwhile with AppleMusic in terms of revenue growth. I’ve never heard any analyst praise AppleMusic as having potential ‘monster’ growth. AppleMusic seems to be just another ‘meh’ revenue stream as far as Wall Street is concerned.
I think the Beats acquisition was a wise decision and not all that costly. However, from what I can see, the entire music streaming industry seems to be a rather weak revenue stream for every company. I’d like to see Apple also get into video streaming and have music and videos bundled like Amazon does.
Agree that streaming as a business model unto itself will never be a huge profit center. But as a vehicle for finding, assisting and promoting new talent it can be the lifeblood of the music industry. Apple could do much of this in exchange for limited time exclusives, which have been very effective by the way.
One has to recognize that Apple Music saved the music industry from implosion. The streaming business models as practiced by Pandora, Spotify and the others frightens them. Ad supported streaming doesn’t send enough cash their way to allow their businesses to thrive.
Focusing on the volume of subscribers as some analysts do is a distraction. Revenue is what is what allows a service to stay in business and grow. Not sure why anyone should care what an analyst from ‘The Street’ thinks. They look at numbers, which does have its use in the business world. But they have no training or tools to help them discern which numbers are more important, such as the number of subscribers versus the number of artists, number of songs, or number of dollars received each month. It’s completely out of the realm. They know nothing about running and growing a business. Otherwise, they would be doing that instead.
30 million users at $10 a month, times 12 months. 3.6 Billion dollars in revenue each year. The 3 Billion investment was genius!
Iovine is not a “hanger on” . Learn the history and who the real players have been/are.