Apple Music Talks Future Of Streaming, Spotify IPO

Since its launch in 2015, Apple Music has been a strong performer for the hardware giant. In a new interview via Billboard, Apple Music executives Jimmy Iovine, Zane Lowe and Larry Jackson talked on topics ranging from the future of Apple Music to the streaming music industry at large.

Among the biggest takeaways, Lowe suggested that streaming music services like Apple Music will need to evolve beyond a standard library-like resource into a way to add more connects between fans and bands. Apple previously experimented with social network-like music features via the short-lived iTunes Ping in 2010.

Lowe: We need to put context and stories around music. The song itself is obviously the primary passion point -- it’s a key that opens the door. But what’s inside the room that is going to make a fan a super fan? Music has become quicker, faster, and there’s more of it. That doesn't mean you shouldn't create a story around something that is beautiful and that lives and breathes.

Elsewhere, Apple Music’s long-time focus has been on standard streaming service investments like artist exclusives and building its catalog, but in recent months, the company has made noise about original video exclusives. Apple Music has launched original shows like “Carpool Karaoke” and with a rumored development budget of $1 billion, it’s potentially on the hunt for its own prestige television show.

Video might seem like a stretch for a streaming music service, but Iovine considers Apple Music to be medium-agnostic and wants it to be a space where artists “can do creative content.”

Iovine also briefly talked about Spotify’s growth and its long-rumored initial public offering, which could potentially occur later this year or early in 2018. The streaming music industry has seen massive changes in the past year, as Apple Music and Spotify have increasingly turned the field into a two-company race and as streaming music has become a primary revenue driver for the music industry at large.

A Goldman Sachs report via Billboard estimates that the music industry will hit $41 billion in revenue by 2030 driven heavily by streaming revenue. But at the same time, the profitability of streaming music remain difficult to wrangle, thanks to increasing licensing and operation costs.

Iovine: I think [Spotify CEO] Daniel [Ek] is a talented guy and smart as all hell, but the margins are too tight. The costs are extraordinary. It’s going to get bigger and bigger and bigger, and the costs are going to get higher, not lower. Going into new countries means localizing everything. It’s going to cost a lot of money. They have a problem that [a diversified company like] Amazon doesn't have.