Apple executive Jimmy Iovine is afraid for the future of music.
Iovine, who joined Apple through its $2 billion acquisition of his company Beats Music last year, railed against music services like Spotify that use a “freemium” model on stage at the Vanity Fair New Establishment Summit.
Spotify’s model lets people use the service for free, as long as they listen to ads, while charging a monthly fee to those who want to ditch the advertisements and get access to premium features, like offline listening.
Apple’s new music streaming service, Apple Music, has no free tier.
“Free is a real issue,” he said. “This whole thing about ‘freemium’ – maybe at one time you needed it, but right now it’s a shell game.”
Freemium music services, he said, are building their audience size, and thus their success, “on the back of the artists.”
The biggest negative effect he’s seen is the amount of time artists now spend on touring, versus making new albums. Artists get convinced to put their albums on streaming services, because they’re told no one will pay for the music otherwise. Then they don’t feel like they can make enough money on streaming services, so they put more reliance on making money when they go on tour.
As a result, they have less time off the road to work on their next album. But the best albums take more time to produce.
It’s a dangerous cycle, Iovine said.
“The records are taking a back-seat to all the touring,” he said. “They should at least be equal, but they’re not right now. And that makes me really T’d off.”
This isn’t a new conversation for Iovine, or Apple. Taylor Swift made huge waves last year when she pulled all her music from Spotify because she didn’t feel like the freemium model respected her work as art.
“If Apple had a free tier, we’d have 500 million people, but we don’t want to do that,” Iovine said. “We believe that we built something powerful enough and strong enough to work.”
Iovine has deep roots in the music industry. He founded Interscope Records in 1989, and worked with huge names like Eminem, Lady Gaga, and, of course, Beats cofounder Dr. Dre.
On stage, he also called out Instagram for sometimes ruining the mystique of big artists, proclaiming that he didn’t want to know when Jim Morrison went shopping.
“Music used to be No. 1 or No. 2 in most people’s hearts,” he said. “But if you said to a teen today, ‘Okay, you can only have two apps on your phone,’ neither one of them would be music. And that makes me scared. I have no research for that, but I can feel that from living everyday.”