Music mogul Jimmy Iovine shot down rumors that he plans to exit Apple in August telling Variety that he’s committed to staying on the team and helping the company get music streaming right. “I am almost 65, have been with Apple for four years and in 2 1/2 years the [Apple Music] service has gotten to well over 30 million subscribers and Beats has continued its successful run. But there’s still a lot more we’d like to do. I am committed to doing whatever Eddy [Cue], Tim [Cook] and Apple need me to do, to help wherever and however I can, to take this all the way. I am in the band.”
Iovine, who became an Apple “executive” in 2014 when the company purchased Beats Electronics from him and artist and producer Dr. Dre for a reported $2.6 billion in cash and $400 million in stock, appeared on Monday night at the Grammy Museum for a screening and Q&A to promote the Grammy-nominated HBO documentary “The Defiant Ones.” Iovine said that, as is common with stock swaps, his Apple stock has been vesting in stages since he sold Beats, and while he confirmed the last of it will vest in August, he was displeased at the mercenary tone of recent speculation.
“All this stuff you’re seeing in the newspapers, let me tell you, my stock vested a long time ago. We need Donald Trump here to call it ‘fake news’,” he said, getting a laugh from the sold-out crowd of 200 (Executive Director of the Grammy Museum L.A. Live Scott Goldman conducted the interview with Iovine and “Defiant Ones” director Allen Hughes). “There is a tiny portion of stock that vests in August, but that’s not what I think about,” Iovine added. “My contract is up in August, but the funny thing is, I don’t have a contract. I have a deal, and certain things happen along that deal. The bottom line is I’m loyal to the guys at Apple. I love Apple, and I really love musicians. That’s why those articles annoyed me, because it had nothing to do with reality. It made it out to be all about money.”
Iovine said he turns 65 in a few months and that while eventually he’ll have to slow down, it won’t be soon. “The next chapter, whatever intensity I’m working, will be to help streaming come to scale.” Iovine lauded Apple Music’s growth to more than 30 million paid subscribers in two-and-a-half years, as compared to Spotify, which has been around for 14 years (officially for 10) and claims more than 70 million subscribers.
While streaming services have a ways to go insofar as fulfilling their mission, he cautioned that the music industry is riding the tailwind of technology, it shouldn’t be viewed as a cure-all. “The record industry right now is expecting technology to fix their problems, like they always have, and I’m not sure technology is going to fix their problems this time. It will make music better, it will make it sound better, and improve access and delivery, but I’m not sure that benefits the labels unless the labels do something to make the proposition more interesting. Everybody’s talking about the great oil gusher, but it’s not going to scale unless streaming gets more interesting.”
To help the next generation connect the dots between the tech and creative music space, Iovine and Dr. Dre (whose given name is Andre Young) founded the Iovine-Young Academy for Arts, Technology and the Business of Innovation at USC with a unique curriculum that includes not only business skills, but a fourth year “garage experience” to bring a project to fruition.
As an example of what “more interesting might be,” Iovine drew from subscription television. “Netflix has a unique catalog, because they don’t buy HBO and they have their own catalog. Then on top of that they have a little thing called $6 billion in original content. HBO has $3 billion, Amazon probably has $4 billion. Well, guess how much original content streaming has: zero! Fundamentally. All the catalogs are exactly the same,” he told the crowd.
Joining Iovine for the Q&A that followed the screening of episode one of “The Defiant Ones” was director Hughes. The four-part program, which premiere on HBO last summer, is nominated for a Grammy in the best music film category. The story chronicles the parallel rise of Iovine – a recording engineer who went on to found Interscope Records – and Dr. Dre, who went on to become Iovine’s business partner, and whose Aftermath Records wound up at Interscope, breaking acts like Eminem.
The career-spanning work made Iovine reflective. Asked about his “next chapter,” he said, “I don’t see myself at 75-years-old running around doing music. Eventually I’ll be slowing down. But right now, I’m committed to getting streaming right.”
His mind was also very much on the next generation of musicians and executives. “What’s going on with YouTube – all of us who have kids here [know] there are artists on YouTube who have 5 million views who have never had a record deal or even met a lawyer. Well guess how much leverage that artist has going in to making deals? A lot of the new deals coming out are very [favorable] to the artist, which I completely applaud. That’s a different dynamic. The old deals are being replaced by new deals.”
Old deals, pre-‘70s, “are 95-5 in the label’s favor,” while post-70s artists are benefiting from having their catalogs revert back, with many participating in the “new deals” that are “more like 70-30 or 80-20 in favor of the artist. So that will affect the math,” channeling artists with “a significant influx of money.”
Speaking of significant influx of money, on Monday, Variety estimated that Iovine and Dre’s Apple shares would pay in the vicinity of $700 million once the stock vests in its entirety.