1/16/13: Iovine: It'll be "guys who know music and culture" who create viable music streaming

Paul Maloney
January 16, 2013 - 12:25pm

Beats Electronics CEO (and Universal Music exec and record industry legend) Jimmy Iovine thinks that when it comes to creating a music service that fans will embrace, the tech guys don't stand a chance.

"I was shocked at how culturally inept most consumer electronics companies are... You can build Facebook, you can build YouTube, you can build Twitter — you can be a tech company and do that," he told AllThingsDigital's Peter Kafka at CES. "Subscription [music] needs a programmer. It needs culture. And tech guys can’t do that. They don’t even know who to hire. They’re utilities."

Obviously, Iovine has faith that his company, with "guys who know music and culture" like himself, Dr. Dre, and Trent Reznor at the helm, is far more suited to creating the killer streaming music experience.

"[Other music subscription] companies, these services, all lack curation... There’s no curation. That’s what we did as a record label, we curated," he said. "We are heavy on curation, and we believe it’s a combination of human and math... Right now, somebody’s giving you 12 million songs, and you give them your credit card, and they tell you 'good luck.' You need to have some kind of help. I’m going to offer you a guide... a trusted voice, and it’s going to be really good."

Interestingly, Iovine says he'd long been trying to push the late Apple founder Steve Jobs towards creating a streaming music subscription service.

"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 didn’t want to pay the record companies enough. He felt that they would come down, eventually... I think in the end Steve was feeling it, but the economics... he wanted to pay the labels [for subscriptions], but [the fees were] not going to be acceptable to them."

At CES, Iovine and his company named former Yahoo! Music and Topspin CEO Ian Rogers (RAIN coverage here) CEO of Beats' music subscription service, codenamed "Daisy" (which will likely be a repurposed MOG, which Beats owns). More on Daisy in RAIN here.

Read the AllThingsDigital interview with Beats' Iovine here.

Paul Maloney
January 16, 2013 - 12:25pm

Rhapsody Intl. president Jon Irwin told Inc. magazine he doesn't think Pandora's and Spotify's "freemium" model  (that's when a basic version of a service is available free, but a subscription is charged for the full-feature version) is the way to go.

Inc. reports Irwin believes Spotify's (and Pandora's) strategy is to "build a big name and a big user base by giving away the store, then do an IPO and leave the shareholders to figure out if the service can make money." He says his company's strategy is in building partnerships with automakers, mobile providers, and consumer electronics manufacturers (which, of course, Spotify and Pandora have done with wider success). Rhapsody did, in fact, launch its app for the Roku set-top device this week (more here).

Spotify has 5 million paying subscribers, plus 15 million more who use the service free. Pandora says in December it had 67.1 million "active listeners" (the vast majority of whom listen free). Rhapsody, which doesn't offer free usage, has 1 million paying customers.

Irwin reportedly revealed to GigaOm his company's plans to expand into 16 more European countries (see RAIN here) in the coming months (Rhapsody is available in the UK and Germany under the Napster brand name).

Read more from Inc. here.

Paul Maloney
January 16, 2013 - 12:25pm

Cox Enterprises, the parent company of Cox Media and Cox Communications, has announced its launch of a $250 million investment fund to back "directly and exclusively in companies created by" board member and serial entrepreneur Tripp Rackley.

According to TechCrunch, "Rackley has a track record in building tech startups that have had successful exits. The most notable ones have been in the enterprise sector, specifically in financial services — nFront, now part of Intuit; and Firethorn, now part of Qualcomm."

Experience, a Rackley startup, is the partnership's first investment. It's a mobile app sporting event or concert attendees can use to upgrade their seats. TechCrunch suggests this may be a clue that the new fund could "be dedicated to startups that are in some way adjacent to the media business for which Cox is already known."

Read TechCrunch here, and the Cox press release here.