Jimmy Iovine, an Apple executive and co-founder of Beats Electronics, rebukes freemium price strategies for killing the music industry.
During the Vanity Fair New Establishment Summit in San Francisco on Wednesday, Oct. 6, the Apple executive blamed that freemium strategies, which are adopted by music streaming services, are actually profiting on the backs of artists.
Iovine says that offering free music is a big issue in the music industry. Iovine's comments take a dig at competitors of Apple Music such as Spotify and Pandora, which are offering music streaming on paid subscription as well as a free tier with advertising.
Apple released its music streaming service called Apple Music in June and offered three months of free subscription. After three months, customers have to pay $9.99 monthly to access the music library.
Iovine also said that Apple can accumulate millions of customers if they offer free music. However, the company does not want to use a freemium strategy like Spotify.
Apple revealed that more than 11 million people subscribed to Apple Music in just over a month of the release of the service. However, Apple has not released any data on how many customers have paid for the service after the expiry of the free three-month tenure.
Iovine suggests that Apple Music is doing good and "I wouldn't be here if it weren't doing well."
According to a Spotify blog, its paid services have doubled over a 12-month period.
"What a difference a year makes! At the end of May 2014, we reached 10 million paying subscribers and 40 million active users. Today, we have reached more than 20 million subscribers and more than 75 million active users," per the Spotify blog.
The Spotify blog also highlighted that as its music streaming service is growing it is beneficial to music makers as well, as the company is also paying more royalties to them. Spotify claims that it has paid over $3 billion in royalties, including $300 million in the first quarter of 2015.
"That's good for music, good for music fans ... and good for music makers," added the Spotify blog.
The royalty figures released by Spotify seem promising. However, according to Iovine, the future of music is grim.
