Jimmy Iovine explains some of the problems that the world of streaming music faces.
In the three years since he left Interscope to helm Apple Music, legendary record exec Jimmy Iovine has been pretty vocal about the ups and downs that the music business has seen not just from the vantage point of streaming services, but labels as well. During a dinner that was covered by Billboard, Iovine was supposed to be celebrating the release of his documentary The Defiant Ones on Blu Ray. However, the conversation quickly turned into a bluntly realistic and, in some cases, bleak summary of the current streaming service landscape.
In short, Iovine doesn't seem to be impressed with the business model. “The streaming services have a bad situation, there's no margins, they're not making any money,” he explained. “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.” The last point in the most interesting, because Iovine thinks that, since streaming is their whole business, they might be the most vulnerable party in the end.
“It's fine with the big companies," he added. "Amazon, Apple, Google... Of course, it's a small piece of their business, very cool, but Spotify is the only standalone, right? So they have to figure out a way to show the road to making this a real business.” While Spotify can potentially equate themselves to Netflix in how their model is set up, it's clear, at least for Apple Music's head honcho, that there isn't nearly as much financial benefit for them to reap.
Is Iovine fair in his comments or do you think he's being too harsh? Have your say in the comments.