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Report: Cook, Cue met with Beats' Iovine, talk music service

updated 01:30 am EST, Wed March 6, 2013

Iovine's 'Project Daisy' subscription service may dovetail with Apple's plans

Legendary music producer, label head and Beats Audio CEO Jimmy Iovine has allegedly met with Apple CEO Tim Cook and media services chief Eddy Cue in a "wide-ranging" discussion of the music industry and related topics, including Iovine's "Project Daisy" proposed music service that he had previously pitched to Apple co-founder Steve Jobs. The meeting has renewed talk of alleged Apple plans for a subscription or premium music service.

The iPad maker has supposedly been planning some kind of subscription streaming service for iTunes (or perhaps a related spin-off), and was said to be in negotiations with the record labels negotiating rights to such a project. It was originally seen as perhaps a "Pandora-like" streaming radio service that intelligently noted what listeners did and didn't like and customized programming accordingly, though no confirmed details have ever emerged.

Iovine, meanwhile, has been pursuing a similar idea he refers to as "Project Daisy" that, as he describes it, is modelled more on "curated" radio stations designed to compete with existing streaming services like Rdio and Spotify, but with intelligent user interaction rather than just presenting a large library of available streaming music. Iovine is the head of the Universal Music Group, one of the big three major labels and home to the combined Interscope-Geffen-A&M label, and thus already has access to a large quantity of music -- but would strike deals with independent labels and the other two majors, Sony Music Entertainment and Warner Music Group.

Jobs and Iovine, who became friends when Apple entered the music business with iTunes, had discussed such a subscription or premium-based service before. Iovine, in a talk at last year's AllThingsD, said that while Jobs had been interested in the proposal he felt that royalties demanded by the labels were "too high" and that over time Apple would have sufficient influence to negotiate rates to an acceptable level.

It's possible that that time is now. Rumors have floated for months that Apple intended to add some kind of subscription-based music service to iTunes, and might wish to bring Iovine on board both as an early champion (just as he was of iTunes, making one of the first deals with the then-fledgling store) and advisor or even architect that could help the company win better licensing deals or secure new content.

Most current subscription music services, though often referred to as the "second highest" source of digital revenue behind download sales, generally pay very little in artist royalties, far less than "radio" type streaming companies. Record companies mostly value the exposure to targeted demographics and believe the services help spur digital or physical music sales -- which have risen slightly for the first time in years this year. Royalties for broadcast media such as literal and Internet-only "radio" stations are set to rise again this year, however.

Artist, however, generally take a dim view of subscription services, feeling underpaid for their contribution and occasionally withholding permission to use their music. Labels appear to have relented on percentages of the money that go directly to the artist somewhat, though ironically Apple's own iTunes Match service (which pays artists for plays of cloud-stored songs out of the $25 annual fee) is often cited as a better deal from the artists' perspective.

Iovine had mentioned during his AllThingsD talk that he was planning to meet with Cue at some point in the future. According to reports from the meeting, Cook and Cue expressed interest in Iovine's ideas and the possibility of future plans but did not (nor intend to) arrive at any type of official deal, AppleInsider reports. Apple is speculated to launch its alleged music service by the end of the year, if it can get the clearances it will need for music content.

by MacNN Staff



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