Beats Electronics has done a very good job at making expensive headphones a mass-market item. And that’s what makes them a good candidate to crack open the music subscription business, says CEO Jimmy Iovine.
Iovine’s pitch: It took guys who know music and culture to sell high-end headphones to the mainstream. And it’s going to take the same skill set for music subscriptions, which have been around for about a decade but are only now getting some traction.
Iovine and his team aren’t talking about details yet, but he is more than happy to talk about the history behind his next venture — he says he wanted to get into music subscriptions before he got into headphones — and why he thinks he can do better than Rhapsody, MOG, Rdio, Spotify, Deezer and the other competitors on their way.
Once I went to see [Intel executive] Les Vadasz. I was running Interscope at time. He was a very nice man and he listened to me. I said, “You know, we could really help you guys.” He said, “You know, Jimmy, it’s a really wonderful story. But not every industry was made to last forever.”
So I was like “wow,” and I called [former Universal head] Doug Morris, and I said, “We’re fucked. These guys don’t want to take over our land — they want to come over and take our water and go back. They like where they are.” So from that point on, I was like, “You know what, this is going to cave. We need subscription. We really do.” I’ve just been single-minded about it since then.
In 2002, 2003, Doug asked me to go up to Apple and see Steve. So I met him and we hit it off right away. We were really close. We did some great marketing stuff together: 50 Cent, Bono, Jagger, stuff for the iPod — we did a lot of stuff together.
But I was always trying to push Steve into subscription. And he wasn’t keen on it right away. [Beats co-founder] Luke Wood and I spent about three years trying to talk him into it. He was there, not there … he didn’t want to pay the record companies enough. He felt that they would come down, eventually.
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