Jimmy Iovine, the head of Apple Music who has spoke about the New Beats Electronics’ Project, has recently stated that music streaming services have their limits as the revenue as they “aren’t making money”.
Even with the increase of the music industry with 50% of paid streaming subscriptions being responsible for the 17% growth to the industry, the companies that have streaming music also have other selling props that allow them to make profit. There are statistics that have stated that the streaming business is decreasing with digital album sale revenue, which was down 26 percent.
According to Consequence of Sound, “The streaming services have a bad situation, there’s no margins, they’re not making any money,” he told Billboard. “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. If tomorrow morning [Amazon CEO] Jeff Bezos wakes up and says, ‘You know what? I heard the word “$7.99″ I don’t know what it means, and someone says, ‘Why don’t we try $7.99 for music?’ Woah, guess what happens?”
He continues by saying “The streaming business is not a great business. It’s fine with the big companies: Amazon, Apple, Google… Of course it’s a small piece of their business, very cool, but Spotify is the only standalone, right? So they have to figure out a way to show the road to making this a real business.”
Iovine has stated that streaming music has also been a struggle because there has been problems with artists such as Taylor Swift. This problems surround the dealing with contracts and artists wanting higher paying deals.