updated 10:09 pm EST, Fri January 11, 2013
Couldn't quite convince Jobs, will try again with Eddy Cue
In an interview with AllThingsD during CES, legendary Interscope Records founder, producer and Beats headphones co-creator Jimmy Iovine admitted that he had spent several years attempting to convince Apple's then-CEO Steve Jobs to adopt some form of subscription model for iTunes or a related spin-off. Iovine told reporters that he will meet with current iTunes SVP Eddy Cue, even as Apple is allegedly preparing a "Pandora-like" radio service.
Though he was ultimately unsuccessful in persuading Jobs to move to a subscription model for digital music, Iovine and Jobs did become friends and work together on some iTunes-related projects, such as the U2 iPod and other music-related marketing. According to Iovine, Jobs would periodically reconsider the model, but always felt that the record company price was too high and that they would "eventually come down" on royalties. As it turns out, he appears to have been right.
Emerging music alternatives to iTunes such as Spotify, Rdio or Pandora pay next to nothing in artist royalties, mostly on the promise of greater exposure leading to increased sales -- a model record companies have been willing to take some heat for, at least for the time being. Apple has been rumored to be working on a premium radio service, not unlike Pandora's model of intelligently noting what users like and dislike, tailoring new songs or additional music based on what they've indicated they prefer. It is also possible that the company could adopt an idea similar to Iovine's, where "stations" would be curated in what is offered rather than user- or promotion-driven.
In the course of his talk, Iovine mentioned that he would soon be meeting with present head of Apple's iTunes and other media and Internet services, Eddy Cue, presumably to re-pitch the idea to Apple. "I don't know what [Cue] would say," Iovine noted, "but I think in the end Steve was feeling it, but the economics [weren't equitable]." Iovine recalled that after the Beats headphones became the first high-priced headphones to really crack the mainstream market, Jobs told him that it was a rare ability to move from "software" (selling music) to hardware (headphones) that he should be proud of.
Though not highly-regarded by audiophiles, the Beats by Dre headphones have been prominently featured in popular culture, and are sold and often displayed on the iPod tables in Apple Stores. Though they are (intentionally) heavy on bass, for certain types of popular music this effect amplifies the power of the format, and has found a devoted following willing to pay $200 for what amounts to an accessory for an compressed-music player that probably cost around the same amount.
Iovine himself is moving ahead with a subscription music service of his own, presently called Project Daisy. As head of Universal Music Group, one of the big four music conglomerates, he will have access to a large library of music already and may be able to make deals with independents and even other big record companies to create his curated music channels.