RadioTimes:
“Right now, music streaming is a utility,” Iovine says. “All the services are exactly the same, they do the same trick. If one of them lowered their price the rest are toast, because there’s no unique offering.”
He suggests that Apple Music will have to look at the frontrunner in the film and TV streaming game, Netflix, and try to replicate its model in order to scale in any meaningful way.
And:
“Netflix has tons of original catalogue, six billion dollars worth of original content every year. That’s a value. All of the [music] streaming services have exactly the same catalogue and exactly the same music. And that’s partially due to the labels; they want it that way. But it’s not smart, and it will show in the end. Unless the streaming services become platforms and have something unique about them, they will not scale. Period.”
And:
“When Shawn Fanning started [music sharing site] Napster, he said, ‘I want to trade songs’,” Iovine says. “He didn’t say, ‘I want to destroy the record business’. So, right now, what engineers are saying – because I work with a lot of them – they’re saying, ‘This bit of communication between artist and audience is still flawed.”
Reading this article, I felt a great sense of deja vu. The reference to The Defiant Ones as new had me searching for a date, sure that this was an old interview. But this was posted yesterday, and Jimmy does point out moving to a consulting gig at Apple, which is certainly current news.
No matter, I thought Iovine’s comments are insightful. Apple clearly sees the value in a music business social network, having tried any number of kicks at the can with no big wins. But I’d like to see them try this again, both because I would love a more powerful way to share music, and because I know if Apple finally gets social right, that solution will respect my privacy.
He makes a great point about Netflix. Netflix is killing it with original content. They are the new TV network. They are draining so much talent from Hollywood, pretty much the only thing left on broadcast stations is news and game shows. Somebody in the music space is going to do that eventually, go out and sign a few hundred up and comers and offer them on their service exclusively. Apple is probably in the best position to do it.
I’m not certain how he can pull a Netflix with an industry as granular as music. There’s a difference in scale between an original Netflix tv show and an exclusive Apple Music recording artist. You’d need a lot more of the latter to amount to the kind of differentiation he’s seeking, no?
I can certainly understand the logic of wanting to hire him in the first place, especially given the stories we heard from back when Apple was first negotiating with record labels for iTunes coverage.
I imagine that book you’re describing will need more, similar first-hand stories of the sorts of meetings held in later decades.
Agree. JI has deep industry experience, knowledge and contacts. He also is/was a heavy advocate for human-curated streaming services, all of which seems ideal on paper. I think the reality is different however.
He’s talking specifically about Music. Being a great platform to watch Netflix etc on is important… for Apple TV which is a device and in a different market.
He’s right – having a critical mass of original content is the only way to set Music apart. It gives a platform the “want to see X? Only here” advantage. For Netflix that was House of Cards and Orange is the New Black. If you wanted to see those, you had to sub to Netflix. Amazon might have the same movies but those series were only on Netflix.
This does NOT mean that Apple needs to produce the content. Look at, for example, the Marvel TV series on Netflix – Jessica Jones, Luke Cage, etc. Netflix pays for them but doesn’t produce them… Marvel TV does.
Obviously, it’s not just music streaming that isn’t paying the creator. Content in seemingly every category is struggling to find a profitable business model, online and off.
Differentiation among the streaming services is not the answer. It seems that diversification, or reimagining the revenue streams is closer to the mark.
Hey, at least he’s no Bozoma.
I must be missing something. I’m still not convinced that Apple will gain advantage from investing in original content rather than continuing to be the best platform to consume content from partners like Netflix, et al.
Events like the now defunct Apple Music Festival seems to me a far more direct – and less risky, image-wise – way to promote Apple’s content services.
Bring back the AMF and add events like an Apple Film Festival.
“And Apple certainly has a “critical mass of content.” ”
Not in music they don’t. Virtually everything they have, Spotify has. I’m not talking about limited time exclusives but about things you can only get on AM. For example… say Chance The Rapper was only available on AM. Or Pentatonix. Or any other emerging artist. Not for 4 weeks or for this album but all their stuff. THAT’S what Orange is the New Black, Jessica Jones, etc gives Netflix.
“This does NOT mean that Apple needs to produce the content.
That’s exactly what Apple’s been doing.”
And my point is that they don’t need to. They can and it’s fine. But they need to have the equivalent of TV production house deals. TV networks and Netflix and Amazon don’t directly produce everything they air. Some, yes, but some is also done by others and merely funded by them.
On video – I disagree with JI and it’s not really what I’m talking about here but the same principles apply, with the twist that because the dynamics of that market are different they can’t make the Apple TV only show Apple sourced content or they fail on that front. But if my Apple TV shows Netflix, Hulu, Amazon Video, HBO, Showtime *and* Apple Video? More quality TV is better.
There’ll eventually be a book written about Iovine’s influence on Apple.
Whether right or wrong, I commented immediately that I didn’t think his mega industry expertise was a good fit for Apple, because – leap of judgement here – I don’t think he understands the company, not because he isn’t fantastic at what he does.
Dave, The Defiant Ones is being pushed now (today) (23rd march 2018) via Netflix. Hence the need to talk about Jimmy Iovine and The Defiant Ones, even tho we saw the mini-series a few months ago elsewhere.
I disagree that it’s the only way to set AM apart. And Apple certainly has a “critical mass of content.” The only company that comes close is Amazon, yet few are arguing with their strategy.
That’s exactly what Apple’s been doing. I happen to disagree, but making a case against original content is pretty much a dead end; how does one prove that it ultimately succeeded or failed?
As you know, JI has been involved in Apple’s move into original content, and that includes video. There’s been reporting on this for a long time. When JI talks about differentiation, that’s what he’s referring to:
“At Apple Music, what we’re trying to create is an entire cultural, pop cultural experience, and that happens to include audio and video,” he said.
And by “video,” he didn’t just mean music videos and those that fit within the broader musical genre, as with Apple’s earlier purchase of James Corden’s “Carpool Karaoke” or Dr. Dre’s “Vital Signs, ” [source: techcrunch 1.16.17]
And AM has a critical mass of unique original content… where? Point me to the 5 outstanding artists that can only be found on AM and not Spotify.
Do they have a critical mass of content period? Yes. But you’re persistently ignoring the bit about it being original and exclusive. THAT, they don’t have. They don’t have it in podcasts (which aren’t Apple content), they don’t have it in movies (same). They don’t have it in TV really. ALL of those have a LOT of content, but very little to no EXCLUSIVE content.
Virtually any movie you name (or podcast or album etc) I can find on competing services so there’s no competitive advantage in that content for Apple (or for Spotify, etc). Competitive advantage comes from price, quality, features, or exclusiveness. Pricing is more or less set. Quality has been Tidal’s play and they’re not doing that well because most people aren’t audiophiles. So if someone says “Why AM vs Spotify” it comes down to features (which mostly can be replicated and thus is only a temporary advantage) or exclusive content. Netflix really took off when they produce high quality content that got buzz and which was only available on Netflix. HBO did this earlier of course.
I think we’re talking past each other. Here’s what critical mass means:
Critical Mass: 2 the minimum size or amount of something required to start or maintain a venture: a communication system is of no value unless there is a critical mass of users.
Apple Music fits this description, and so does its overall content inventory: music, movies, TV, podcasts, etc.
We can agree to disagree on Apple’s original content strategy.