Spotify is in for a rough future, according to Apple’s Jimmy Iovine, who is warning the music industry not to place too much faith in the tech industry.
Iovine sat down for a new interview where he discussed the future of the music industry. According to the Apple Music boss, record labels are “100 percent” overly optimistic about where things are headed with technology.
During his interview with Billboard, Iovine was asked what happens as music labels rely more and more on streaming services for their revenues. While companies like Apple, Google and Amazon are able to help artists out for now, Iovine warned that Spotify is in a vulnerable position.
“The streaming services have a bad situation, there are no margins, they’re not making any money,” Iovine said. “Amazon sells Prime; Apple sells telephones and iPads; Spotify, they’re going to have to figure out a way to get that audience to buy something else.”
Iovine then went on to hypothesize about what would happen if Jeff Bezos wakes up and decides to price Amazon Prime Music at $7.99 to undercut Apple, Google and Spotify. The two tech giants would be fine, but Spotify would have to find a way to recoup the costs. That might be impossible considering Spotify still isn’t even profitable.
The Apple Music boss reiterated his stance that the price point is the problem for streaming services. Free alternatives like YouTube are the issue because they undermine the system in a way that television and movie streaming platforms don’t have to compete with.
Despite facing some tough problems on how to continue making money for and off artists, Iovine doesn’t sound too concerned with what they plan to do.
“These are issues that the record industry has to deal with and I don’t know if they’re dealing with it,” Iovine said. “It’s not my job.”