Jimmy Iovine on what’s wrong with music streaming

Jimmy Iovine, the record executive who made the leap to Silicon Valley, looks back on the decade in the music business, and sees a major problem on the horizon.

Ben Sisario, The New York Times:

Jimmy Iovine
Jimmy Iovine
The biggest story in music over the last decade was the industry’s reconciliation with tech — after a decade fighting the internet, the music business fully embraced it in the 2010s. Streaming has now finally returned the business, which was nearly decimated by the shift from physical to digital formats, to growth.

Perhaps no one has had a broader view of this phenomenon than Jimmy Iovine, the producer and record executive who made the leap to the other side. He and his partner, Dr. Dre, sold their company, Beats Electronics, to Apple for $3 billion in 2014 and helped launch Apple Music, the tech giant’s late entry to the streaming market, which now has more than 60 million subscribers.

In a series of conversations in December, Iovine spoke about his career transition from the studio to the halls of Cupertino, and the tangled relationship between music and tech in the 2010s…

The streaming business has a problem on the horizon, and so does the music business. That doesn’t mean they can’t figure it out. [What’s the streaming business’s problem on the horizon?] Margin. It doesn’t scale. At Netflix, the more subscribers you have, the less your costs are. In streaming music, the costs follow you.

And the streaming music services are utilities — they’re all the same. Look at what’s working in video. Disney has nothing but original stuff. Netflix has tons of original stuff. But the music streaming services are all the same, and that’s a problem.

What happens when something is commoditized is that it becomes a war of price. If you can get the exact same thing next door cheaper, somebody is going to enter this game and just lower the price.

MacDailyNews Take: Exclusives are one way to differentiate, but there is also one very large point of differentiation between the U.S.’s No.1 streaming service, Apple Music, and the world’s leading streaming service, Spotify. Apple Music boasts a library of over 60 million songs, 10 million more than Spotify. You’d have to be stupid to pay the same amount for a library that offers 10 million fewer tracks. Another issue for Spotify is that audio streaming is their business. Apple could afford to give Apple Music away for virtually forever if they wanted to do so. Spotify is stuck trying to survive on razor-thin margins. In the end, as we’ve already seen in the United States, Apple wins again.

17 Comments

  1. In every music genre, whether it’s Classical or Folk or Rock or whatever, 90% lies between garbage and tolerable. Only 10% at the most is truly exceptional.

    In the case of Apple Music, 10% of 60 million tracks is 6 million tracks.

    I’d say that’s worthwhile – it’ll take me a lifetime to listen to those….

    1. Problem is that the 10% you want to listen to in the future might not be popular with the next generation, and it will disappear from the “service”. Gaga and Swift will get at least one billion times the free marketing than any niche genre musician you enjoy, all others are literally turning into starving artists. What’s wrong with the music industry is the same thing that has always been wrong with the industry: snakes like Iovine are in it. Dipshits like Iovine don’t want to teach people to seek great music, or empower emerging artists. They want to corral the sheep and get them on a payment plan. Apple, like most others, proves every day that its music rental service is narrow-minded rubbish pushing trash to the masses.

      That one special song that means a lot to you, well, it will fall out of favor. The average Apple Music kid today couldn’t tell you what instrument Eddie Van Halen played, if unlike pop tarts today they have any idea how to make music without a computer. Brilliant guitarists like say, Rik Emmett or gods like Ritchie Blackmore — nope, they don’t care about analog work. So even top selling artists like these will fall away and become footnotes in the bottom of Apple’s curated “for you” playlist.

      Of course these guys were aided by the invention of the CD, which was a huge revolution prompting the prior generation of analog recordings to be properly digitally archived. Their retirements are safe. Unfortunately, I predict that’s as far back as Apple has interest in going. If it hasn’t been issued by a major label yet in digital format, you know very well Apple won’t go out of their way to remaster it now. They are chasing Bieber fans’ money instead. Heaven help young kids learning music trying to locate complex acoustic music from 2 or more generations ago. Artie Shaw oboe solos from live performances — keep those old records, folks. The cheap mainstream is all fake digital now, they can’t be bothered using the huge variety of actual instruments to make music, let alone include liner notes and proper dates, genres, bpm, composers, and other important data that is essential in truly knowing your music. Eddie Van Halen’s dad played oboe on “Big Bad Bill” (Diver Down, 1982 if my memory serves) — now that would be faked with keyboards today. That’s assuming some new artist would even consider learning a tune written in the 1920’s. Apple never bothered to get any of that data tagged correctly to anything they sell, and they aren’t ever going to make the attempt.

      And then there is the problem of formats. Do you honestly believe that the rapidly consolidating media companies are going to bother archiving old out-of-fashion works that were made by hand? No, because there is no incentive to upsell to a better physical media anymore. Apple invented ALAC and then turned around and did everything possible to avoid using it. What do kids hear now through their overpriced bluetooth earbuds? “The Cloud” is designed to push what is new and popular via low bitrate DRM tracks that sound horrible on any decent home stereo system. Profit is key. But even if the input media was FREE – you know, like old stuff where the copyright has expired and is now in the public domain, does Apple highlight any of that? Nope, too expensive, no new audience knows or cares. Great jazz standards from Gershwin or Porter? Sorry, you’ll have to make due with a recent movie soundtrack featuring their music instead. There is little interest from mega giants like Apple Music in resurrecting what old unique special things were captured decades ago in any new format, let alone in a lossless format.

      Yes, there are niche record companies and individual artists pouring their hearts into remastering great works into lossless formats, or recording new music using no computers, but they aren’t making hardly any money doing it. Apple Music subscriptions are sucking away the disposable income that the poorest generation in a long time has to work with. Support them while you can, because uncaring outfits like Apple Music are trying to kill them off. Billions of tracks of junk “Exclusive content” by top corporate marketing names is key on the Cloud, so bye bye little guys.

      The only good curator for your collection is you. Someday kids will learn the downside or renting — and then it will be too late. The tracks they loved growing up will disappear under a pile of electronica and hip hop garbage. They won’t own any special things as in past generations, many of them would rather use disposable plastic landfill fodder dinner ware than to use the beautiful china they inherited from their grandparents. So when it comes to music, they will have no choice but to rent what the algorithm attempts to push to the corralled herd. In the internet era, clicks (crude popularity metrics) are what is substituted for “good” — or now even “true”. And you wonder why so much music today is formulaic computerized rubbish routinely stealing/”sampling” previously recorded work — because it’s cheap and easy. If that’s all that the services push, that’s all the better the mainstream listeners will know. As an artist, why invest the time to be a great musician when the computer can fix the bollocks? As a lazy consumer, why attempt to understand what made old deep cuts unique and unparalleled?

      1. @Mike:
        Your points are all valid but relate more to the current culture of rubbish music.

        I am a professional musician and mainly use Apple Music to listen to Classical music. I constantly find wonderful “new” tracks that I would never have access to without actually buying hundreds or thousands of CD’s. I already own hundreds of CD’s and LP’s which I rarely listen to. I have added them to iTunes and they sync between all my devices which is very useful.

        I often only want 1 or 2 tracks from an album and it would be unlikely that I would spend the money for the entire CD.

        The article quoted above related to streaming – not the quality or lack thereof of popular music.

        Anyone with taste – and you are clearly such a person – will be able to ignore the fodder and find the real jewels among the 60 million….

      2. Uh, what instrument DID Eddie Van Halen play?
        I’m not a kid though.. in my 50s’. Just never listened to Van Halen.
        My guess would be guitar, but that’s probably wrong – seems to easy. And, I did not look it up (yet), that’s also too easy.

      1. I am an old fart who has resisted the streaming services, partly because I don’t think that the artists (remember them??) get a fair shake. Unlike most old farts, I know that there is plenty of good new music out there. I enjoy the hunt for good music in mags like UK’s Uncut and MOJO. It is fun to search out and sample the various artists mentioned there and then build my own library. Yes, I can afford more than most teens to support artists and I do. The end result of my efforts is a very eclectic but great range of tunes.

        1. There is actually great new music being made- you just don’t see or hear it on TV or on awards shows. It’s under the radar, and you have to look for it, or stumble upon it- the more access, the better. I read articles, reviews, check the library, too.

        1. Finding new music: Several months ago I was “somewhere” on the internet and I don’t remember where when I heard a catchy tune. I found the tune on Pandora and from there have been exposed to quite a bit of new stuff that I find enjoyable. The “similar music” algorithms are effective in exposing me to new music that I would have never found.
          I will sometimes put in one of my various “weird” songs just to see what else is out there. Using the thumbs up/down moves the music in different direction. Some music is good, most is poor.
          My employees make little comments on wanting to listen to “good” music (current pop) but I try to expose them to new horizons (Phillip Glass/Ravi Shankar, Accoustic Alchemy (older stuff), Angela McCluskey, Bon Iver, Enigma, Scott Huckabay, and lots more older rock music.) Pandora finds me new music similar to these and all gets better. Though, until recently, I used to buy all my music via iTunes.

  2. I also think it unusual and a sort of challenge to “study” music when delivered in streamed format. It’s much more likely to be background sound that come/goes and by the end of the day, there’s a good chance one really “knows” none of it. Of course there are exceptions.

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