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Apple Music exec: Free music is a shell game we don't play

Jimmy Iovine, a top figure at Apple's subscription service, says Apple Music doesn't want to build a business on the backs of artists, even at the expense of hundreds of millions of listeners.

Jimmy Iovine joined Apple when the company bought Beats last year. James Martin/CNET

Apple has no desire to be a source of free tunes, according to Jimmy Iovine, a leader of the company's subscription music service.

Streaming music services supported by ads are "building an audience on the back of the artists," Iovine said Wednesday at the Vanity Fair New Establishment Summit in San Francisco. He characterized ad-supported streaming music as a "shell game."

Apple Music had 11 million users as of August, according to the Cupertino, California, tech giant. Iovine said Apple could quickly raise that number to 500 million if it offered a free, ad-supported model.

"We don't want to do that," said Iovine, a former record producer who co-founded Beats Electronics. "We believe that we've built something powerful enough and strong enough that it will work."

Iovine's comments come at an important juncture for Apple Music, which provides unlimited on-demand tunes for $10 a month. The service launched at the end of June with an offer for customers to try it free for three months. That period has begun to elapse, and Apple started charging its first members at the end of September.

Unlike rival Spotify, Apple Music doesn't allow users to listen to tunes on-demand for free in exchange for sitting through commercials.

Ad-supported streaming music has been an agonizing issue for the recording industry. Many artists and labels participate in them to reach the biggest audience possible, even though they worry the model teaches people that music isn't worth paying for.

Apple Music made headlines even before it launched when pop superstar Taylor Swift complained about its policy of withholding royalty payments on streams during free trials. Within a day, Apple capitulated and agreed to pay all artists for every stream.

The service also got unfavorable reviews when customers complained about buggy services, something Iovine touched on Wednesday. The bugs caused the music libraries of some customers to disappear, and the service was criticized for being difficult to use.

Apple is "very satisfied" with the service, Iovine said, although he acknowledged there were some aspects of it he'd like to change.

Iovine didn't disclose how many subscribers Apple Music has but characterized growth as "going really well."

He drew laughs from the audience, saying "Apple has taught me not to give out numbers."