Apple Music's Jimmy Iovine says services like Spotify & Pandora can't be profitable

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  • Reply 21 of 36
    While the main topic of the article has to deal with streaming services being profitable for the companies offering the services, I wish society made a bigger deal about how these services are, overall, not profitable for the artists actually creating the art being offered. To be honest, I think that the sustainability of the model rests upon finding a formula that allows artists to keep creating compelling works that people want to pay for and that elicit an emotional response within the listener.

    I was talking to someone involved in the business, and he was telling me that the model that exists now is that artists now make up the majority of their income by performing live shows (confirming what I’d read previously). People don’t buy enough music anymore to live without artists needing to tour. That can put a greater strain on their financial, professional, and personal lives, especially for the artists that don’t live for (love) giving live performances constantly to put bread on the table.

    Taking a step back, I think we’re just in a period of a grand transformation of the music industry, and we haven’t found our way yet to a new, sustainable model. Look at journalism — the industry was completely gutted financially and for over 15 years struggled to find a profitable model. But very recently, there has been a move toward people paying for subscriptions at rates that allow news outlets to operate and make money (at least enough to pay their employees and all the other expenses). With music, we just haven’t gotten to that point yet.
  • Reply 22 of 36
    ksec said:
    I have been wondering on this for quite some time. What is stopping anyone downloading 1000s CD of illegal ripped Music, and then use Music Match for it?

    Absolutely nothing.
  • Reply 23 of 36
    foggyhillfoggyhill Posts: 4,767member
    lukei said:
    Actually Chinese Tencent is the world’s most popular streaming service with over 500M users. 
    If they're using western music, they're undoubtedly stealing the IP (which wouldn't be surprising in China) cause I don't think just being registered and being a free user can "pay" for the music streamed by that number of users unless they pay nothing at all to musicians (paying something to for free users streaming is what has put Spotify in the hole).


    edited November 2017 watto_cobra
  • Reply 24 of 36
    Iovine - in his current role - has become the symbol of cross-subsidizing. If he can only live from a business model he's unable to implement, he'd better go.
    edited November 2017
  • Reply 25 of 36
    Jimmy hardly seems to have a clue what he talks about.
    Markets gets spoiled by false competition from cross-subsidized companies.
    This is essentially what Apple is doing as per Jimmy's own policy.
    So there is no problem if market regulators do what they should do: take out cross-subsidized Apple Music, Amazon Prime and guys like himself in order to re-establish and stabilize markets with healthy margins. Removing overcapitalized services and VP's like himself would offer artists their fair share of profits - instead of a race to the bottom that nobody survives.
    edited November 2017
  • Reply 26 of 36
    lukei said:
    Actually Chinese Tencent is the world’s most popular streaming service with over 500M users. 
    And nearly all of it stolen content.
    watto_cobra
  • Reply 27 of 36
    ksec said:
    I have been wondering on this for quite some time. What is stopping anyone downloading 1000s CD of illegal ripped Music, and then use Music Match for it?
    Ethics and the value of your time.  For most people $10/month for unlimited music is a much better deal than hand crafting a library of stolen music.
  • Reply 28 of 36
    Bacillus3 said:
    Jimmy hardly seems to have a clue what he talks about.
    Markets gets spoiled by false competition from cross-subsidized companies.
    This is essentially what Apple is doing as per Jimmy's own policy.
    So there is no problem if market regulators do what they should do: take out cross-subsidized Apple Music, Amazon Prime and guys like himself in order to re-establish and stabilize markets with healthy margins. Removing overcapitalized services and VP's like himself would offer artists their fair share of profits - instead of a race to the bottom that nobody survives.
    For good or ill, there are no laws (in the US) against cross-subsidizing per se.  And thankfully anti-trust regulators aren't trying to lumber into the internet economy that is much more dynamic than they can handle (the Apple ebook case as a notable exception).
  • Reply 29 of 36
    badmonkbadmonk Posts: 1,077member
    Roots522 said:
    I pay for Apple Music... its a great way to build a music collection. I also pay for Spotify premium: its a great way to immerse yourself into the best music from any new artist you discover. This is the very aspect of Apple Music that is so bad: the interface for navigating an artists back catalogue in Apple Music is atrocious. I have loved apple for a long time now (17 years) but they have had long enough to sort out the flaws of Apple Music and they have made very little progress. Parts of the Spotify interface are just superb but I would never use it to organise my music collection. But Spotify has created a special thing that cannot be defeated by trashing their business model. They will survive & they will make profit because they have created a thing that people find useful... just like twitter... just like facebook. After reading this nonsense from Jimmy Iovine I am now fully behind Spotify... just because I love music more than I could ever love a business: no matter how good their design: no matter how much I appreciate the mac. & I would add this... tying artists to exclusive contracts in a steaming service is just wrong... wrong for the art & wrong for the customers you are serving. Apple is slowly starting to get its own head up its arse... something that genuinely never would have happened under Steve Jobs.
    just ask Thom Yorke of Radiohead of what he thinks about Spotify.  I have Apple Music when I tell my Spotify friends about a certain album they are usually the ones who don’t have access to thw album...just an observation for the type of music we listen to. Another example along with the Radiohead industrial complex are the Drag City artists.
  • Reply 30 of 36
    mr omr o Posts: 1,046member
    My experience with Apple Music so far:

    1. Half of the music I own is not available on Apple Music. Even music I bought on iTunes no longer shows up in neither iTunes nor Apple Music, e.g. Sasha's involver 3.
    2. Songs and albums from Apple Music I add to the library on my iPad do not show up on my MacBook Pro, and vice versa.
    3. Connect adds artists to my list of artists I follow without my consent.
    4. I am not a fan of the playlists in Apple Music because of the fragmented individual songs. I end up going back to Soundcloud because of the amazing DJ mixes. These are hour long seamless playlists, DJ sets if you like.
    >:x
    edited November 2017
  • Reply 31 of 36
    rufworkrufwork Posts: 130member
    Roots522 said:
    I pay for Apple Music... its a great way to build a music collection.
    We may have very different definitions of what “build a music collection” means. I believe yours is analogous to, “build an Apple Music addiction.”

    I still enjoy spending that $120 a year on CDs, which actually builds a collection, where I own the tracks well beyond the month I paid for them, but also realize that makes me a dinosaur. 
    beowulfschmidt
  • Reply 32 of 36
    cgWerkscgWerks Posts: 2,840member
    darkpaw said:
    Off-topic: Apple Music ballsed-up my iTunes library. My carefully-curated, fully-ID3-tagged library started since the first version of iTunes was mangled so much I had to wipe it and start again. Thanks for that, Apple.
    While that exact thing hasn't happened to me, my music library is now a confusing mess. Some stuff has cloud symbols, but won't download. Certain tracks still ask for one of my Apple IDs. When I'm out and about, Siri refuses to play playlists where I've DL'd everything local because I have no WiFi connection. My wife and son seem happy just being able to play stuff they want though. I've found a few interesting things, but it seems the few times (we've had it for maybe 5 months) I've gone looking for something, Apple Music doesn't have it (like, even if they have the rest of the album, the track I wanted is missing for some reason).

    All I really wanted was for iTunes to manage my collection, and allow me to share it between devices. Apple took that away from me, and yet I still decided to pay them for a subscription to try and clear up the mess. Well, it didn't do that, but I guess it also provides some benefits. Win some, lose some.

    rufwork said:
    Roots522 said:
    I pay for Apple Music... its a great way to build a music collection.
    We may have very different definitions of what “build a music collection” means. I believe yours is analogous to, “build an Apple Music addiction.”

    I still enjoy spending that $120 a year on CDs, which actually builds a collection, where I own the tracks well beyond the month I paid for them, but also realize that makes me a dinosaur. 
    No doubt! More like build a *list* of music that goes away if you ever stop paying. So, now Apple has us for life (or at least till we leave the eco-system and our collection).

    The problem I ran into was that I didn't have a good way to distribute that physical collection to our various devices... and once Apple took away iTunes sharing capabilities, I lost the family battle on the physical collection debate. :(
  • Reply 33 of 36
    cgWerkscgWerks Posts: 2,840member
    I should add though that I think Iovine is essentially correct in the advantage Apple has here. Services have to make money to stay around. That's why I prefer paying a reasonable amount for things I care about.

    We're seeing this play out in the podcast space over and over again too... new 'free' podcast host pops up... goes away. Another pops up... goes away. Meanwhile, services like Libsyn have been around for over a decade, I think. But, for some reason, new podcasters still flock to failing services like SoundCloud rather than just spending $5 or $10/mo on a company with a future.
  • Reply 34 of 36
    mr omr o Posts: 1,046member
    cgWerks said:
    ...
    But, for some reason, new podcasters still flock to failing services like SoundCloud rather than just spending $5 or $10/mo on a company with a future.

    Soundcloud does Social right. It is where the crowd is. A pretty engaging one. It is what Connect ought to be.

    >:x
  • Reply 35 of 36
    cgWerkscgWerks Posts: 2,840member
    mr o said:
    cgWerks said:
    ...
    But, for some reason, new podcasters still flock to failing services like SoundCloud rather than just spending $5 or $10/mo on a company with a future.

    Soundcloud does Social right. It is where the crowd is. A pretty engaging one. It is what Connect ought to be.

    >:x
    That's an interesting point. However, be very careful about the wise saying... 'don't build on rented land.' I also think it's a really bad idea for all the people building their forum communities on Facebook (and we're seeing what happens there).

    The big problem with SoundCloud and podcasting, though, is that your audience is tied to your RSS feed. If the service goes away, it's going to be hard to bring your audience over to wherever you make your new home. If you change your RSS feed URL, you lose all your subscriptions.
  • Reply 36 of 36
    ksecksec Posts: 1,568member
    lukei said:
    Actually Chinese Tencent is the world’s most popular streaming service with over 500M users. 
    And nearly all of it stolen content.
    And I wondered why the unpopularity of China in US.

    You will be surprised they are not Stolen. In fact perfectly legal. Including Western Music.

    And since this topic bought up, when you read anything about the "World"'s most popular, it is likely the "World" means US + Canada + EU. Excluding anything from Japan, China, Korea, India etc.
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