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Interscope-Geffen-A&M Chairman Jimmy Iovine spent decades producing tracks for rock and hip-hop artists, but he’s also watched the rise of digital distribution, file-sharing and piracy dry up the record labels’ most lucrative revenue streams. So what’s a die-hard music exec to do? Find alternative sources of revenue for the label and the artists — like the new partnership between computer-maker HP and Beats Electronics, the audio technology company founded by star producer Dr. Dre.
Beats and HP have launched a line of computers that are designed to let users hear the music the way the producers and artists heard it in the studio. At the launch party for the HP Envy 15 Beats laptop, I asked Iovine (pictured) about how hyping an expensive piece of technology — it will retail for about $2,300 — fit into the overall scheme of getting people to pay for more music. He told me it was part of Interscope’s long-term view of the marketplace, which includes a plan to launch an online music distribution platform code-named “Timberland,” not to mention soon-to-launch music video site Vevo, which he called a “giant step forward” for the industry.
Tameka Kee: So what’s the strategy behind launching a $2,300 laptop to a target audience — young adults that like hip-hop — that may not be able to afford it, particularly in this economy?
Jimmy Iovine: Our target audience is anyone that uses their laptop as their primary source of music — their radio in the house — and I think that’s a majority of people, not just hip-hop fans. It definitely is a high-end product, but to change the entire ecosystem of digital music, you have to start with the sound. Producers like Dre create these tracks, but when you port them to a CD, then to an MP3, then through iTunes and play them through a PC’s horrible speakers, it sounds like crap. And people don’t want to buy music that sounds like crap.
So if we can get the sound quality improved, you get people that want to pay for music because it sounds that good. We launched the Beats headphones that initially cost $179, but there’s also a $99 version now. We’re thinking about less expensive versions of the laptop, but maintaining the sound quality is the most important factor.
What about people that say the tracks themselves aren’t worth paying for — no matter how good the laptop can make them sound?
Sometimes we do create bad records, but I don’t think millions of people would steal a track if it was that crappy. Making hits is a top priority, but in the age of 99-cent MP3s, we have to try to create value in as many ways as possible. That means getting people so connected to the artist and their music, that they understand stealing it is hurting them. Creating a better sound experience that’s endorsed by a producer like Dre is one of those connections; we’re working on other platforms.
Yes, like this stealthy digital platform supposedly named “Timberland.” Can you tell me more about that?
I can say that it’s tied to the tremendous interest we’re seeing from people that want to mix their own tracks and playlists. Games like DJ Hero are coming out that tap into it; people are talking about creating their own tracks in forums and on social networks — and so we want to give them a place where they can do things like that legally. Timbaland [another blockbuster producer] is helping us work on it; it’s code-named after him for now.
Will people be able to buy tracks or sound components and then resell them? Will they be DRM-free?
I can’t give you specifics; I can say it will be a platform though, not a game. It’s similar in vision to Vevo — which for the first time, will give labels the ability to push out our product without having to go through radio or TV stations. Before, we had to make it, ship it and pray for a hit. Now, with Vevo, we can create the content, sell the ads, and even use the data to market new music to people alongside things they already like. When Vevo launches in December, it will be a giant step forward for the industry. And Interscope is trying to create something similar with our Timberland project.