MBW recently interviewed music industry legend Jimmy Iovine for our World’s Greatest Producers series (supported by Hipgnosis Songs Fund).
It was a fascinating insight into how Iovine’s time in the studio influenced his attitude and strategy for the rest of his career. We couldn’t leave it at that, though.
So we also asked Iovine for a few of his thoughts on the music industry today (and tomorrow), about the future for major labels, about the challenges faced by streaming companies – and what it’s like being out of the game after being at the top of it for so long…
What would your priorities be if you were running a major label?
As a start, I would bring in true entrepreneurs, give them the ball and let them go for it. I had that relationship with Universal and some great things came out of it.
I would definitely concentrate on trying to gain access to the customer, to own my customer, not let third parties control the customer.
Throughout history, be it record stores, or MTV, or iTunes, or streaming services, for some reason the record industry has always been comfortable having someone else [own] the relationship with the customer.
Is there a problem at the moment with the way and the amount that artists and songwriters are being remunerated in this streaming-dominated world?
I’m not trying to over-simplify a very complicated issue, but the basic dynamic between streaming services, artists and labels is still not what it needs to be.
Technology and the shift of culture has led the process of artists wanting to own more of their rights. That in turn forces changes to the economic relationship with labels in general, but that doesn’t mean there isn’t room for everyone – it just means [the] balance will shift.
“Technology is enhancing the ability of the artist to communicate directly with their audience. That’s very powerful. From that, the entire ecosystem will change – and benefit.”
Technology is enhancing the ability of the artist to communicate directly with their audience. That’s very powerful. From that, the entire ecosystem will change – and benefit.
I always felt that we needed to do more to keep our value in the chain when I was running a label myself in the early 2000s. Interscope needed to do more, labels in general needed to do more, to keep their relevance.
Would you be optimistic if you were still in the major label system, or would you be fearful?
I wouldn’t be fearful; I’m always optimistic. I would be aggressive; I’d be playing offense.
What I mean by that is, I would be looking at what’s going on in technology, at the attitudes within the artist community, at the realities of distribution, and that would determine what to do, how I structured my business, and my relationship with the artist going forward.
That touches on a very popular question in industry these days: what is the role of a modern record company?
I don’t think that way. I would just say, ‘Okay, this is what the zeitgeist is telling me and how are we going to adapt?’
I don’t want to ask or answer a question like, ‘What does a record company do?’ I believe that it is the labels’ responsibility to get out in front of anything like that.
Or, put it another way, I would ask it – and answer it – before anybody else.
What do you think the future looks like for streaming companies?
I don’t think just as utilities they maximize the potential [of their platforms].
How do you improve the margins of streaming services as a utility? Because the fixed the costs stay fixed, so something’s got to give, right? They have to create new forms of revenue.
“The music streaming services don’t own their content, and that’s a big problem. They’ve got to figure that out.”
The music streaming services don’t own their content, and that’s a big problem. They’ve got to figure that out.
How do you scale the thing? Not in terms of subscribers, but how do you scale it monetarily? How do you make it make business sense? The labels and streaming services obviously have an issue here. But it has to be sorted – or a perhaps a third party with a new model will figure it . Someone will. Either way, vacuums get filled.
What do you think are the points of difference between the music streaming services out there today?
From 30,000ft, there aren’t any, really. They’re all very similar. All great services but, to me, to scale it, they need real differentiation.
For one, Trent [Reznor] and I always felt that streaming services should have a social aspect to them. We both still feel strongly about that.
What impact, if any, do you think Universal’s potential public listing will make to the industry?
It means some people will make a lot of money. I don’t think it matters at all.
What do you think of the trend for songwriters – some very famous songwriters – to sell their catalogs, when the golden rule used to be to never sell?
Well, when you get to these prices, golden rules change.
They obviously think this is a time in their life and career when they can make an extraordinary amount of money.
And the motivation of the companies collecting these catalogs?
They’re… very bullish [laughs].
What’s the main reason to look to the future of the music business with optimism?
I think the artists have really blue sky ahead. The direct relationship between the artist and the consumer, the stronger it gets, I think that’s going to be really, really positive for the artist.
And if the streaming services and labels sees [that] as an opportunity, I believe it’ll be great for everyone.
what’s the main reason to be pessimistic?
If no one does anything, if they try to protect the past, if everyone just says, ‘I like this model and I’m gonna do everything I can to keep this model’, nothing goes forward.
“If there’s a desire to keep things the way they are, then I wouldn’t be optimistic; that’s not gonna work.”
If there’s a desire to keep things the way they are, then I wouldn’t be optimistic; that’s not gonna work.
Finally, how are you enjoying retirement?
Honestly, I can’t tell you how much I love it.
Really? I didn’t think you would.
None of my family thought so either. I did a lot of work; I got ready for it. I realized that I just wanted to stop. I’ve always tried to do what felt right to me, and what felt right to me at that point of my career was to pull up.
There must be things you miss about being in the music business?
No, there really isn’t. I’m not averse to investing in music, I’m just not doing it myself.
Truly, you don’t miss anything?
I was fortunate enough to try a lot of different things in my career: producing recordings, having a label, starting a headphone company with Dre, building a streaming service at Apple. I try to never look back.
Dre told me something a long time ago, and it goes for me in work as it does socially. He said, ‘Jimmy, you don’t want to be the old guy at the club.’
Right now, I’m enjoying being the old guy in life [laughs].Music Business Worldwide