The culture-collide of old-school record business and new technology was no more evident than in a private room following Apple’s announcement of its new music service on June 8. There, on perpendicular couches, Jimmy Iovine draped his legs over the arms of the sofa while twisting his body 90-degrees and lounging back into the pillows -- a child’s pose, of sorts, for the 62-year-old. Eddy Cue, Apple’s svp of internet software, on the other hand, sat upright and leaned in, taking to heart the Silicon Valley ethos popularized by Facebook chief operating officer Sheryl Sandberg. Both, however, proudly sported their Apple Watches, as if to say: it’s about time.
Apple Music, which launches on June 30 with an arsenal of 30 million songs, has been in the works for more than a decade, says Iovine, who first started talking to the Cupertino-based giant on the heels of the iTunes launch in 2003. Now, it's a reality, boasting on-demand streaming (with an offline component, to help stem the decline of downloads), a 24-hour human-curated radio station (helmed by former BBC DJ Zane Lowe) and a connect function that facilitates direct-to-fan engagement.
It’s a massive undertaking whose impact is sure to be felt almost instantaneously thanks to the 800 million credit cards Apple already has on file. With a click, users can sign up for $9.99 a month -- or $14.99 for the family plan, which allows up to six accounts -- price points that, Cue says, took much deliberation.
Below are excerpts from our sit-down:
How far back do these conversations go?
Jimmy Iovine: A long time. I first went to Apple because the record business had a problem. I could have met with a bunch of tech companies. I remember sitting down with the CEO of a major carrier once who said, “I can't believe you dressed like this to my meeting!” Then I met with Steve Jobs and Eddy and I'm like, “OK, I'm holding on because I can relate to this.” I’ve believed in streaming and subscriptions for a very long time and I believe that the ecosystem is messed up so we built an ecosystem.
Explain the thinking behind having a radio station…
Iovine: What’s gone on in the last 15 years in radio is that it's really become manufactured. It's either genre-based or beat-driven or research-driven. So I said, let's build something that's got none of that that just plays music because it's great. So we got Zane, someone who's very progressive about young, upcoming artists who want to push it by establishing great records. But don't play it just because it's a [particular] artist. Like The War on Drugs -- they should be gigantic. I think they're fantastic. This is the kind of place where a band like that can really thrive.
Did Tidal's rollout have any impact on how you decided to launch Apple Music?
Eddy Cue: You can never be concerned or spend your time worrying about what somebody else is doing. That doesn't mean I don't pay attention to it. We couldn’t have [switched directions] that quickly anyway, because Tidal shipped long enough ago, but we didn't change our vision of what we were trying to accomplish. It was very clear all along the path and we still believe we went down the right path.
Iovine: I like Jay. We have a great deal of respect for Jay as an artist and the artists that are behind it. Beyond that, I wouldn’t comment.
How much deliberation went into the price point?
Cue: A lot on the $14.99 -- not so much the $9.99. I think the cost of an album for a month of subscription is fair. Could you argue, $7.99 or $8.99? Who cares. I think where subscription is missing the boat is on the family -- you have a spouse, boyfriend, girlfriend kids … the concept of signing up for these individual subscription plans multiple times is just not going to happen so we spent a lot of time with the labels to convince them that the real opportunity here is to get the whole family. With that, all boats rise.
Jimmy, you had been taking meetings with labels…
Iovine: I stopped taking meetings. It was better for Eddy to do it because I'm, like, from there.
Cue: The great thing about the labels is we go back a long time now. More than a decade and I think over the years we've learned a lot about each other and we built a trust factor. When we started, everybody said no one 's going to buy a song for 99 cents, but they did. Did we always agree on everything? No, but I think it allows for some great discussions. Part of the challenge that you have with labels -- it's much easier for me to sit across from you and we can negotiate and get something done, but you can't do that with labels. Because there's many of them and then there's publishers and collecting societies so you're having to convince a vast number pf people to a common cause because all of them have a different opinion and a different priority. So that's the challenge and it’s the piece where we've got a lot of experience and it helps that we know each other but it's always difficult to get those things done.
Jimmy, it feels like the very survival of the music industry is on your shoulders, do you feel that pressure?
Iovine: I feel the pressure of getting something right. If we get it right, none of this matters. If we get it right, everything is smooth. I think Daniel Ek has done an incredible job so far [with Spotify] -- having to make those deals like he did in those early days. There's a lot of people doing good work. And now we're doing this and it's very musical. We get to move the needle of popular culture, which is the holy grail. When you do that — and who's done that more than these guys -- it's a rush. Having a hit is nice, having some success but when you move popular culture, that's a high.
What happens to downloads?
Cue: They'll go on for a long, long time. Music downloads have gone down a little bit, not a lot, so this is not a crater. There are lots of people who are very happy downloading and I think they'll continue to. Will people now subscribe? Of course, and some of our customer base will stop downloading in general. But if you're a downloader today, you’ve got a new music app that's got a great set of features for you.
Are the labels greedy?
Iovine: When I was a label head, I didn't think I was greedy I've always run my own race. There are all different kinds of people running labels. You are in an economic crisis in the music industry right now.
Cue: I don't think it's true. I think that's a mistake to put that on a label across the board. … We've always felt that if you gave people a great service, people would pay for it and that's what we're trying to do. I don't get to determine that $14.99 is the right price, society determined that in a way, and we'll see if it is or not.
Iovine: You can't just have a utility. To get people to pay for something that you built, it has to be of service. It has to make somebody's life better. That's why I came to Apple. Because they have a tradition of making lives easier, simpler, better -- I think people do pay for that.