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What Steve Jobs Said About Streaming Music Subscriptions

Would Apple s Steve Jobs Have Bought Beats Billboard


Jobs was notoriously skeptical of the streaming music business. When asked how he viewed the music subscription model in a 2004 interview with Billboardon the one year anniversary of iTunes, Jobs said:

“We have more discussions with the content owners than anyone else. This is something we’ve pursued right from day one. If for $10 a month you could put 10,000 songs on your iPod, we’d like to know about it. But you can’t, because there’s no business model that makes sense for the labels, or the subscription fees you would have to pay are ridiculous. It doesn’t matter what kind of technology we develop (…) just because you build it doesn’t mean they will come.”

Jobs echoed these thoughts in an interview with Rolling Stone in 2003, “The subscription model of buying music is bankrupt.” he said. “I think you could make available the Second Coming in a subscription model, and it might not be successful.”

Continuing, “The first record company to really understand this stuff was Warner. Next was Universal. Then we started making headway. And the reason we did, I think, is because we made predictions. And we were right. We told them the music subscription services they were pushing were going to fail. MusicNet was gonna fail. Pressplay was gonna fail. Here's why: People don't want to buy their music as a subscription. They bought 45s, then they bought LPs, they bought cassettes, they bought 8-tracks, then they bought CDs. They're going to want to buy downloads.”

And to his point, so far streaming music has had a difficult time gaining a mainstream audience in the U.S. Even with a super-bowl ad and an AT&T partnership, Label sources estimate to Billboard that the Beats Music subscriber count is in the "low six figures," others reporting around 200,000 subscribers. Spotify last reported 2 million paying subscribers in the U.S. and has yet to turn a profit. In contrast, Apple still has 800 million iTunes account holders, but digital track sales are down a staggering 12.5% in Q1 of this year.

In 2011, Hirchhorn described a meeting with Steve Jobs to Cnet, “I give him my views on the future of music, and I was always big on subscription services. He listened and then he said, "Jason, you seem like a nice guy, but your ideas are all wrong."

Iovine explained a similar experience to Inc. magazine, “I’ve been meeting with Apple about subscriptions since 2004. Every two months. I think they’re an incredible company, and I wanted them to do subscriptions.”

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I can appreciate how tough it is for the music industry.

Streaming services appear to be cannibalizing some digital track sales.

But streaming services have not demonstrated they can be profitable.

The exception is YouTube, which does video streaming instead of audio streaming.

Perhaps that has insight into the future of music and how to make money.

Isn't apple Radio a subscription service?

Yes but not really comparable: It's not playlist based like Spotify and Beats by Dre.

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