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Why did Apple spend $3 billion to buy Beats? If Beats co-founder (and legendary record producer) Jimmy Iovine is to be believed, it's to save the entire music industry.
"It's a simple problem," Iovine told the crowd at the Code Conference in Los Angeles, where he took the stage with Apple's Eddy Cue. "The album is going away." An entire generation of music listeners is growing up without understanding the pacing and feel of music, which is what the human curators of the Beats streaming service hope to solve with custom playlists. "You have to have the feel of one song leading into the other."
There might be a simpler reason, though: Iovine and his fellow co-founder Dr. Dre are exactly the kind of passionate, fiery advocates for the connection of art and technology that Apple's lacked since Steve Jobs died in 2011. Iovine at his best is a captivating, emotional figure, and he repeatedly emphasized the message that artists and human curators need to be on equal footing with the recommendation engines and personalization algorithms favored by most music services. "Most tech companies are culturally inept," he said. "The record industry is technically inept."
And the gap between northern and southern California is growing as streaming services teach consumers to expect an endless supply of music and movies instantly on demand. "People will pay for service. They'll pay for an experience," said Iovine. "They're not going to pay for access." That means media companies have to find new ways of delivering content to consumers, but innovation has been slow as cultures clash. "A lot of what happens is that Silicon Valley looks at what Hollywood does and they think it's easy," said Cue. "They don't appreciate the artistic achievements because they do it so well." Cue added that media companies have taken advances in tech for granted. "There's been a lack of appreciation for the work that each side does."
Iovine summed it up more bluntly. "The entertainment industry is desperately insecure, but the guys in Silicon Valley seem a little overconfident."
Apple, of course, managed to successfully bridge the gap between music and tech once before with the iPod and iTunes — the beginnings of a massive ecosystem that now encompasses movies, TV shows, and the iPhone's App Store. But Apple's star has faded in recent years as the world waits for the company's first major post-Jobs product, all while other services like Spotify, YouTube, and Netflix have reinvented media consumption. $3 billion isn't a lot if Apple can gain a big chunk of cool by hiring Dr. Dre and Jimmy Iovine and giving them offices and money and freedom to try and change the music industry for a second time.
Cue rejected that interpretation, although not quite as strongly as you'd expect. "I don't think you can buy cool," said Cue. "You make the best products in the world and customers love them. I think Beats is really cool, and people love them." Iovine said he'd been working with Apple for a decade, and it was his idea to finally sell. "How do you go from dating for 10 years to getting married? It just happens," he said.
There's still a lot of work to be done, of course — Beats Music has just 250,000 subscribers in the US compared to Spotify's 10 million worldwide, but Iovine brushed those concerns aside. "We don't think about competition. I'm talking about the creative process," he said. "A lot of what I see in consumer electronics is that you copy what somebody successful did, and that goes against everything the creative process is. It's embarrassing to copy." Of course, that didn't stop him from taking a small shot at his competitor. "Spotify is a good service and great people, but they need to push for curation as well," he said. "We're in America. Spotify should have 10 million people in America, not worldwide."
These are the sorts of snap judgments and strong opinions that have been missing from Apple's public presence since Jobs died. Apple has one of the strongest and deepest executive benches in any industry, but the company has seemed guarded and cautious for the past several year, with perfectly-rehearsed messaging standing in for Jobs' raw emotional genius. Products like the iPhone 5S and the iPad Air are terrific, but thinner shapes and bigger screens aren't magic — they're just what we all expect now. They're the formula. The algorithm.
Iovine and Dre bring the promise of surprise back to Apple — the promise of real people who bring the strength of their real experiences to new kinds of products. "Dre and I come from similar backgrounds," said Iovine. "We shared something; it wasn't music. It was the dream of music changing our lives."
It's not clear whether consumers really are dying for human beings to program their streaming music playlists for them — Spotify is doing fine, and most teenagers are getting their music from YouTube anyway. But tech companies have long starved for human connection; for an understanding of emotion. Jobs loved to declare that Apple stood at the intersection of the liberal arts and technology; that his company alone understood it was making art with every new smartphone. Other companies might have chafed at the bravado, but it created an unmistakable aura around Apple.
"I've always wanted to work for them," said Iovine, describing his decade-long courtship of Apple. "We got lucky."
It might be the other way around.
