Beats' Iovine: I talked to Steve Jobs about music subscriptions

The famed record company giant says that he tried to sell Jobs on launching a music-subscription business for three years to no avail.

Jimmy Iovine with singer Pharrell (left) and Dr. Dre (right).
Jimmy Iovine with singer Pharrell (left) and Dr. Dre (right). Interscope Records

Jimmy Iovine, a bigwig at Universal Music Group and co-founder of Beats Electronics, says he tried to sell Steve Jobs on a music-subscription service years ago but couldn't quite make it happen.

Speaking to All Things Digital in an interview posted yesterday, Iovine said he approached the late Apple co-founder in "2002, 2003" to pitch him on the idea of launching a music-subscription service. For three years, he tried to push Jobs into saying yes, but Apple's then-CEO didn't like the idea of paying record companies so much.

"And he wasn't keen on it right away," Iovine told All Things Digital. "[Beats co-founder] Luke Wood and I spent about three years trying to talk him into it. He was there, not there...he didn't want to pay the record companies enough. He felt that they would come down, eventually."

Apple, meanwhile, has remained content to simply sell music, and Jobs ostensibly believed such a strategy was best for his business. Rather than share a portion of the subscription fees collected for unlimited streaming with labels -- as Iovine pitched to Jobs -- Apple has stuck with selling tracks and giving record companies a piece of the revenue.

Iovine's discussion on subscription services dovetails on his company's recent announcement that it's launching an offering of its own called Daisy. That music-subscription service will be "heavy on curation," according to Iovine, and give subscribers a guide that will help them find the kind of music they're interested in.

It's not clear exactly what Iovine, who is chairman of UMG unit Interscope Geffen A&M, pitched to Jobs or whether some of the ideas expressed in those meetings will make their way to Daisy. However, Apple has been rumored for years to be considering making a bigger jump into online music with a streaming service. Last year, in fact, research firm BTIG Research wrote that it believes Apple will launch a streaming service at some point this year.

Whether subscription services -- from Apple, Beats, or any other company -- can actually succeed over the long-term remains to be seen. Spotify came to the U.S. in 2011 with high hopes for transforming the music space with a subscription-based offering. Since then, the company has slowly transitioned its operation, and now offers a radio-streaming service similar to that from Pandora -- the U.S. leader in online music. Current subscription-based services, like Rhapsody, Rdio, and Deezer, have yet to match their free counterparts.

However, Iovine thinks his service will address that problem. He said in the interview that tech companies are "culturally inept," which makes them incapable of succeeding in subscription-based music.

"Subscription needs a programmer. It needs culture. And tech guys can't do that," Iovine said. "They don't even know who to hire. They're utilities."

 

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