Jimmy Iovine, the longtime recording industry mogul currently heading up Apple Music, hates free music—an idea to which Spotify, Apple’s biggest music streaming competitor, is stubbornly clinging.
Spotify, founded in Stockholm in 2006, has for a decade now offered its millions of songs via a free, advertising-supported tier as well as a paid subscription tier. Apple Music only has the latter. Why? Iovine pared it down in an interview this week with Music Business Worldwide.
I’ve put my money where my mouth is: Beats Music didn’t have a free tier. Apple Music doesn’t have a free tier. I’m not just talking it; I’m walking it. That’s why I aligned with Eddy [Cue] and Tim [Cook] and Steve [Jobs]. They thought the same way. I think what’s going on [with free music] is wrong. I just do. I don’t care if saying that makes me seem behind-the-times, up-with-the-times, young, old… I don’t care! Because, whatever it is, it’s wrong.
The latest figures show Spotify boasting 50 million paying subscribers compared to Apple Million’s 20-30 million. By conservative estimate, there are at least 50 million other people on Spotify’s free tier. But consider that Spotify’s free tier brings in substantially less revenue than its paid tier—which means that more than half of its user base is not pulling its weight in terms of generating money for either Spotify or its artists. Iovine emphasized that free ad-supported streaming services generate very little money, adding:
If Apple Music had a free tier, we would have 400 million people on it. That would make my job real easy. But we believe artists should get paid. That’s why I went to Apple.
That’s the reason Taylor Swift and several other artists made a dramatic exit from Spotify in 2015. Critics of Spotify’s so-called “freemium” model also say the existence of the free tier is dragging down the number of people who would otherwise be enticed to join the premium tier. Spotify—which is slouching toward either a direct listing or an IPO while still not turning a profit—seems to recognize this problem itself. The company recently caved and made a deal with Universal Music Group to offer exclusive album releases on the premium subscription tier, in a clear attempt to tug people away from the free one.
Iovine, in his recent interview, repeatedly bashed the existence of free music but suggested that if paid services simply get better, people may be finally turn toward the latter. “You’ve got to put everything into making the experience for people who are paying feel special,” he said.
Apple Music is making original content and striking record deals left and right to try and do exactly that. And even if it’s got fewer subscribers than Spotify at the moment, the fact that the platform requires every user to pay for music means the rate of its growth, at least, will always surpass Spotify’s.