Jimmy Iovine thinks the music industry is rotting and the once-great album is taking a beating, and it's all the fault of free music. The prolific record producer and Apple Music executive laid out his position in typically bombastic fashion at the Vanity Fair New Establishment Summit in San Francisco today. Iovine wants the music industry to look to Apple and the team it acquired from Beats — himself and Dr. Dre included — to help save our culture from those that want to parcel it out for no cost.
"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. It's a dig at Apple Music competitor Spotify, which offers its streaming service as both a paid subscription and a free tier with advertising. "These companies are building an audience on the back of the artist." Iovine added that Apple could easily amass hundreds of millions of users if it were willing to offer a free tier for Apple Music. But considering the service as it is now, he thinks he and the company have "built something powerful enough that it will work."
Iovine is marrying the music industry's interests with the goals of the tech sector
Iovine may think Apple Music is powerful, but everyone outside Cupertino has no idea how it's performing now that its three-month trial period ended last week. Like Apple Watch sales figures, the performance of the company's streaming service remains in the shadows, even while Apple touts its success. But, as Iovine added, "I wouldn't be here if it weren't doing well." Next to Iovine on the panel was HBO CEO Richard Pleper, who said that partnering with technology companies is what's keeping HBO at the forefront of distribution with its HBO Now subscription service, debuted exclusively on Apple TV in April.
Iovine really hates free music, and wants tech companies, artists, and record labels to agree. Panel moderator Andrew Ross Sorkin of The New York Times brought up Taylor Swift's open letter to Apple, in which she asked it to alter its pricing scheme for the streaming service to favor independent artists who would otherwise not get paid. Iovine said he watched Apple CEO Tim Cook and VP of software and services Eddie Cue handle the situation in the best way possible. "They dealt with it on the spot on a Sunday morning," he said. "They moved like lightning and they did the right thing." Apple capitulated to Taylor Swift and agreed to compensate artists for the Apple Music trial period, earning the license to stream Swift's hit album 1989 in the process.
Of course, Apple isn't exactly playing nice with the rest of the industry. The Department of Justice and the Federal Trade Commission are looking into Apple’s cutthroat business practices starting this past summer after Apple reportedly begun putting pressure on its music-label partners to drop support for Spotify's free tier. Apple has it out not only for Spotify, but YouTube as well, and agreed to cover the fee YouTube pays Universal Music Group to license its songs if Universal stopped letting the Google-owned video service use them.
Following the event, Spotify reached out to clarify its stance on Apple. "It's pretty hypocritical for Apple to talk about ending free when they have free Beats 1, free iTunes Radio, and freely use their platform to try and force competitors to charge higher prices for subscriptions," Jonathan Prince, Spotify's global head of communications and public policy, told The Verge.
"It's going to keep being the Stars Wars bar on Tatooine."
The future of music, according to Iovine, is looking pretty grim as more and more artists are forced to subsist on large-scale touring to earn money. Figuring out a way to compensate everyone is the reason he joined Apple, which "brought in 300 lunatics" capable of agreeing on a common agenda. "We always waited from somebody to come out of the woods and do distribution for us," he said of his record company days. "That doesn't work because the tech companies will come out and ask you to do it for free."
Tech companies don't have it all figured out, either. "Just because you go to Burning Man doesn't make you Hunter Thompson," he noted of the tech industry's profoundly uncultured perspective on art. "The media business needs to have tech people and give them stripes and the tech businesses needs to give media people stripes," he added. "Or it’s going to keep being the Star Wars bar in Tatooine."
Update at 4:47 p.m., Thursday, October 8: Added comment from Spotify.