Iovine helped Apple launch its streaming service back in 2015. Since then, Apple Music has grown dramatically, acquiring 30 million paying customers, second in the world behind streaming powerhouse Spotify, who yesterday announced making 70 million subscribers.
The music site Hits Daily Double first reported that Iovine’s departure will happen afterward this year, and Billboard followed by reporting Iovine will leave when his inventories become vested( agreed upon time for Iovine to get rights to his Apple inventories ).
Iovine didn’t have have a formal title while contributing Apple Music, but the co-founder of both Interscope Records and Beats( a streaming and headphone company Apple acquired during 2014) brought virtually unmatched industry savvy to Apple’s new streaming service. It’s unknown what the 64 -year-old music mogul will do next.
“The streaming services “ve got some bad” situation, there’s no margins, they’re not making any money.”
An Apple Music subscription, like Spotify, expenditure $9.99 per month and plays ad-free music. Apple says it has 40 million anthems in its catalog — while Spotify has about 30 million.
But while these subscriptions numbers are impressive, Iovine wasn’t remain convinced that streaming corporations, in their current form, could be profitable. At a dinner event in September 2017, Iovine took questions from reporters about the state of the streaming service, and he answered candidly.
As Billboard reports, Iovine was skeptical about how streaming corporations( or divisions within a company) can be profitable on their own — without the backing of massive tech firms that sell other tangible products 😛 TAGEND
The streaming business is not a great business. 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 lane to prove the road to making this a real business.”
Indeed Spotify, while having produced billions of dollars, reported a $601 million dollar loss in 2016. Its sales in 2016 did double — but there are still questions about longer term profitability. In 2017, the still-private company’s losings are assumed to have continued, although it was had recorded an impressive $2.2 billion in merely the first half of 2017.
While Spotify’s growth hasn’t been hampered by a slew of copyright infringement lawsuits, Iovine proposed last year that the streaming business is generally in a precarious place — though hardware giants like Apple can weather the losses. Perhaps, mused Iovine, Amazon might simply come along with its own cheaper streaming service, and dominant the streaming industry — perhaps without making such a money.
“The streaming services have a bad situation, there’s no margins, they’re not making any fund, ” he said. “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 intends, and someone says, ‘Why don’t “were trying to” $7.99 for music? ‘ Woah, guess what happens? “