Does Jimmy Iovine Think Spotify is in Trouble?
Jimmy Iovine, the recording engineer who rose to become the billionaire head of Apple Music, has a few things to say about the state of the music streaming industry.
“The streaming services have a bad situation, there’s no margins, they’re not making any money,” he told Billboard.
“Amazon sells Prime; Apple sells telephones and iPads; Spotify, they’re going to have to figure out a way to get that audience to buy something else. If tomorrow morning [Amazon CEO] Jeff Bezos wakes up and says, ‘You know what? I heard the word “$7.99″ I don’t know what it means, and someone says, ‘Why don’t we try $7.99 for music?’ Woah, guess what happens?”
The short answer is it would rattle the entire streaming business ecosystem and probably most of all the industry-leading Spotify, which nine years after launching is still unable to turn a profit.
“The streaming business is not a great business,” he continued. “It’s fine with the big companies: Amazon, Apple, Google… Of course it’s a small piece of their business, very cool, but Spotify is the only standalone, right? So they have to figure out a way to show the road to making this a real business.”
Jimmy’s words carry weight. The Motley Fool financial site took his comments to mean that Spotify is in trouble. Meanwhile, he also had something to say about the state of today’s music.
No one’s expressing how they feel,” said Iovine, lamenting a lack of outspoken musicians willing to take a righteous stand. “People are telling us to dance, they’re telling us to love, they’re telling us to have sex … but most people aren’t talking about how we feel.”
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