But the 64-year-old Iovine, whose expansive career was chronicled in HBO’s recent four-part documentary series The Defiant Ones, is an unlikely bear in a bull market -- he says the Goldman Sachs report “just doesn't work for me.” The forecast, he claims, fails to properly account for the easy money that older catalog music currently pulls in, not to mention the competition from free platforms like YouTube, a problem that video subscription service Netflix doesn't face. (Apple also has big plans for video apart from Apple Music: It will be investing $1 billion annually in it.) 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.
To do it, he’s relying on BBC Radio 1 veteran Zane Lowe, now creative director and L.A. anchor for Apple Music’s free radio service Beats 1, and Apple Music head of content Larry Jackson, a former A&R executive at Interscope and other labels. All three are focused on creating exclusive content, from films and ads to radio shows and glossy magazines, to help artists tell the stories behind their music in an age of shrinking attention spans and fast-changing playlists. Drake alone has created TV ads, a short film and his own Beats 1 station, OVO Radio, where he debuts new songs.
“What’s really going to make you want to go on this journey with these artists?” asks Lowe, whose hundreds of lengthy, revealing interviews with superstar artists represent one potential answer (though marketing those interviews remains one of the many challenges facing Apple Music).
Apple, which has about 800 million iTunes customers around the world, has more levers to pull: The company recently started promoting Apple Music subscriptions more heavily through ads (one coming in October will feature Lena Dunham) and on its iTunes Store, where it began selling 99-cent singles in 2003. (Music downloads have been plummeting steadily since 2013, down 24 percent in the first half of this year in the United States, according to the RIAA.) It has been spending seven-figure sums to secure exclusive rights to more than a dozen documentaries on artists from Harry Styles to Diddy, some of which have garnered more than 500,000 first-week views, on par with HBO’s premiere of Beyoncé’s Lemonade, a source tells Billboard. And Iovine, Lowe and Jackson are hoping to funnel more paying fans in through Beats 1, a live feed that’s free because it doesn’t offer songs on demand. The trio is also hoping for changes to the way Billboard calculates its charts -- where a free stream on YouTube counts equally to a paid stream on Apple Music -- which could incentivize artists and labels to promote their music on higher-paying platforms, rather than racking up free streams to win the No. 1 slot. The three men spoke with Billboard last week about, as Iovine puts it, “what streaming has to become.”
How must streaming change?
Jimmy Iovine: There has to be much more engagement between the artists and the audience. We have big plans and a long way to go. It’s just impossible to do it all in two years.