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Universal Music Chief Says Industry Needs More Experimentation, Not More Ads (Video)

Free, ad-funded music services won't sustain artists or labels, says Lucian Grainge.

Asa Mathat

After successfully moving from analog to digital distribution, the music industry’s future health depends on being able to convince more people to pay up, says Universal Music Group CEO Lucian Grainge.

Free and ad-funded services such as the standard offerings from YouTube, Pandora and Spotify alone won’t get the job done.

“We want to accelerate paid subscription,” Grainge said, speaking Wednesday at the Code/Media conference at The Ritz-Carlton in Laguna Niguel, Calif.

Part of that means experimentation, Grainge added, pointing to a deal announced earlier in the day that will give Jason Kilar’s Vessel a three-day exclusive window on some music videos as part of that startup’s subscription service, currently in beta.

Finding businesses that customers want to pay for is the key to the next phase for the industry, Grainge said.

“Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors,” Grainge said, repeating a thesis he has made before.

As for what Apple may be up to, Grainge said he doesn’t fully know, and couldn’t say if he did. That said, he is positive about what Apple and former Interscope head Jimmy Iovine can accomplish.

“I think Apple has been a fantastic partner to all of the content industries,” Grainge said. “They have been around for a long time. They have done phenomenally well with music. They ended up with a tremendous share of the pie.”

Here are some video highlights from the conversation:

This article originally appeared on Recode.net.