Music producer Jimmy Iovine, who became part of Apple when the company bought streaming music service Beats Music last year for $3 billion, announces the company’s revamped Music app and its intention to compete for the growing number of streaming music fans.(Photo: Jefferson Graham, USA TODAY)
SAN FRANCISCO – Here’s a throwback move. Apple is looking to reinvent radio.
In a much anticipated announcement Monday, new Apple employee Jimmy Iovine told attendees at its Worldwide Developer’s Conference here that the new Apple Music app will mesh elements of existing on-demand services with a decidedly retro feature.
Apple Music takes the human-curation element of Beats Music, the subscription service Apple got in its $3 billion Beats Electronics purchase last year, and adds Beats1, a live DJ-helmed radio station aimed at giving music a cultural center that has been diluted since the digital revolution rocked the music industry landscape.
“It’s all the ways you love music, all in one place,” Iovine said. “Algorithms can’t do it all. You need the human touch.”
Apple is coming from behind and late to the streaming scene, which is a typical approach for the company that was late to digital music players and smartphones but managed to crush both categories with the iPod and iPhone. Apple’s iTunes Radio, launched in the fall of 2013, never captured the mass attention of listeners.
Although revenue from music sales generally has been declining, streaming subscription sales have seen steady growth, today representing roughly $1 billion of a total $15 billion music-sales pie.
The new service, which launches later this month, will retain Beats Music’s $10 a month fee. The DJs helming radio duties include Zane Lowe of the BBC in London and Ebro Darden in New York.
Other features of Apple Music include For You (curated suggestions based on your listening habits) and Connect (a forum for musicians to reach out to fans with new songs and other media).
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There’s no mistaking the game plan: Leverage the huge reach of iTunes to court subscribers with a destination that hosts everything back catalogues to the latest remixes plus a global radio station schooling listeners on what’s hot around the world. The mission: Stand out from the streaming leaders providing similar music content, ranging from Spotify to YouTube.
“Today, there are too many places people have to go to experience music, and that’s the problem we wanted to solve,” iTunes chief Eddy Cue told USA TODAY. “We’re got a revolutionary music service with human curation. We’ve got live radio that’s not the Internet radio people are use to. And we have the ability to connect fans with artists.”
Apple’s entry into the space has been long anticipated, not just because of its Beats Music purchase but also due to the longtime importance of music to Apple.
Jimmy Iovine, left, and Dr. Dre, were the founding forces behind Beats Electronics. (Photo: Andy Kropa, AP, Invision,)
In January of 2001, Apple CEO Steve Jobs introduced the iTunes store, and later that year he unveiled the first iPod, with its then-staggering claim of giving consumers “1,000 songs in your pocket.”
But after growing the store to mammoth proportions – today Apple claims some 80% of global download sales – the company has been faced with a consumer shift away from buying music (song sales are down 12% over last year) and towards streaming (up 54% in 2014, according to Nielsen SoundScan). A move was inevitable.
“Apple can coast for the next few quarters on iPhone 6 sales and growth in China, but the stock will be in neutral until investors can see what (CEO) Tim Cook 2.0 looks like,” says analyst Daniel Ives of FBR Capital Markets. “A lot of people are talking about augmented reality, but streaming (music) plays a key role, especially if they can integrate it effectively into the Apple ecosystem.”
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For Cue, Apple Music isn’t a new venture, but the realization of 15 years of conversations that began when he and Jobs invited record producer Jimmy Iovine – who went on to found Beats Electronics with rapper Dr. Dre – to see the first iteration of iTunes.
“It all goes back to that beginning,” Cue explains, holding court in Cupertino headquarters conference room last week with Iovine and musician Trent Reznor, who was integral to the creation of Beats Music. “And I can tell you, we are as excited now as we were when Steve and I launched that first store. Back then, we saw a problem and came up with a solution. And we think we’re doing that now.”
Both Iovine and Reznor, who rose to fame as the force behind Nine Inch Nails, have spent much of the past few months in Silicon Valley fine-tuning Apple Music. While Iovine remains a fast-talking creature of the hard-charging music world, Reznor’s quiet demeanor meshes with the campus tech culture. He calls himself a “fanboy who can’t believe he’s working here.”
Trent Reznor is a musician and Oscar-winning composer whose involvement in Apple’s streaming music project stems from his passion to keep music relevant. (Photo: Andrew Chin, FilmMagic)
The three sketch out a new service that has its roots in the desire to simplify the streaming experience for both consumers and musicians, whose options today include Spotify, Pandora, SoundCloud, YouTube and the new Jay Z-backed service, Tidal.
“If you love music, there are a job a ton of places and apps, whether that’s streaming, radio, social, music videos, but it’s messy,” says Cue. “It’s hard for the consumer, and they miss out on things. That’s the problem we want to solve.”
Iovine, who is passionate, intense and sporting a gold Apple Watch Edition, leans forward at the table.
“In my opinion, we have failed if we don’t change music (with Apple Music). We’re like (’60s British pirate radio station) Radio Caroline, we’re offshore and pushing out content,” he says, going into a history lesson about how albums brought fame to eclectic long-form rockers such as Pink Floyd, while MTV led directly to Michael Jackson’s ascent.
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“We serve no master but music,” he says. “We don’t want to send anyone to Disneyland (through a radio promotion). It’s about being of service to music lovers, about delivering something convenient that’s also better.”
For Reznor, who rose to fame as frontman for Nine Inch Nails and won an Oscar for The Social Network‘s soundtrack, working on Apple Music wasn’t an option.
“I had to be a part of this, it wasn’t a choice,” he says in a soft voice that belies his aggressive stage demeanor. “I care about music deeply, and I got tired of hearing (from executives) ‘We’re in between business models.’ Rather than sit back and complain, I thought, hey, I can help fix this from the inside.”
Reznor laments how the “act of listening to music has been demoted, and we can help elevate it again to being treated like art. Music isn’t just digital assets, something to buy online like auto parts. It should be far more special.”
Cue is insistent that Apple Music isn’t as much a business proposition as it is an opportunity to reinvent a delivery platform that reflects both the pros (endless choice, often for free) and cons (context-less listening and fragmented destinations) of today’s digital music scene.
iTunes chief Eddy Cue is a guiding force behind the new Apple Music streaming platform. (Photo: Eric Risberg, AP)
“I know it’s hard for people to understand this, but we don’t look at this from the money point of view, that it’ll help us sell more devices,” he says, laughing. “We’re selling a lot of devices as it is.” (Apple’s iPhone success has led to a cash pile of $180 million and current valuation pushing $800 billion.)
“This is about making music more relevant,” says Cue.
Then he says something that has his colleagues nodding: “I think more music is consumed today than ever before, but it’s also less important than it’s ever been.”
Reznor is first to add his thoughts. “I’ve spent my whole life as an artist, supporting what that means as that has slipped away in significance,” he says. “If what we can do (with Apple Music) is make being an artist something that my kids would aspire to, then it matters.”
Iovine can’t help but interject.
“The first time an unsigned artist uploads his song to Connect, and then Zane notices it and plays it and puts it on iTunes, and then the world knows about it, well then the world is different,” he says. “We want to be able to create a beautiful noise.”
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