- 5 minutes ago
Music streaming is a crowded market where platforms offer most of the same content, so how does Apple Music differentiate itself? Oliver Schusser, vp of Apple Music and international content, Apple, joins Billboard On The Record to break down how the service has transitioned from its early Beats Music roots into one of the world’s leading streaming platforms. He explains Apple Music’s focus on a curated, high-quality listening experience built around editorial expertise, artist relationships and product integration rather than scale alone. Schusser also discusses Apple’s stance on maintaining a paid-only model, how the platform uses AI in discovery and fraud prevention and the importance of its partnerships with artists and labels.
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MusicTranscript
00:00:00Music streaming services are not exactly created equal. Sure, they might look very similar on the surface in that music
00:00:07streamers largely have the same catalog of songs. But as time is going on, these competitors, Spotify, Apple Music, Amazon
00:00:14Music, Tidal, Deezer, so many more, are beginning to differentiate. This can come in the form of new features, or
00:00:20it can also come in the form of royalty rates, business plans, policies, as these things all start to diverge.
00:00:26So today we are here at Apple Music's brand new studios in Culver City to talk about the changing streaming
00:00:32service market and hear from their head honcho, Oliver Schusser, about what makes Apple Music different.
00:00:41Oliver Schusser, welcome to On The Record. Thank you so much for having us. We're at Apple Music Studios today.
00:00:46Thanks for being here. It's great to do this.
00:00:48Today we're going to be talking about kind of differentiation among streaming services, what makes Apple Music different, but I
00:00:55feel like obviously a good place to start is the fact that we're at your studios, which is a differentiating
00:00:59factor for you guys.
00:01:00So tell me about the studio and when it was built. It's brand new. So just kind of give me
00:01:06a lay of the land. When did it open? Why did you guys prioritize this? Let's start there.
00:01:11Yeah, we're here in Culver City, which is where we're headquartered as well in LA. When we started Apple Music
00:01:1711 years ago, we were worried that music streaming would be impersonal and it wouldn't allow artists to express themselves
00:01:26beyond just the music.
00:01:27The music gets delivered by a record label or a distributor. And we wanted Apple Music to be more than
00:01:33that.
00:01:33We wanted to be a platform for artists to connect with their fans in whichever way they wanted.
00:01:38And that was the original idea behind what was Beats 1, which we later rebranded to Apple Music 1, a
00:01:44radio station that's completely unformatted, where artists could come, they could do an interview, they could play some music.
00:01:51I don't know, they connect with their fans, whatever they want to do.
00:01:55And so we built these radio studios all around the world that were fairly traditional, relatively small radio studios.
00:02:03And we realized that we were right in our original idea that artists really want to do more than just
00:02:08the music on streaming services.
00:02:10And we sort of outgrew these spaces.
00:02:12And so last summer, we moved into a much bigger place.
00:02:15It's a proper campus here, if you think of it.
00:02:17Artists can come in, whether they have a new project or, I don't know, some idea.
00:02:21It doesn't actually matter. It's open all day long, seven days a week.
00:02:25And here we have radio studios here for interviews or making radio shows.
00:02:28They can come and just mix maybe a spatial audio track or a DJ mix.
00:02:33We have a soundstage where we can record live events with or without fans.
00:02:36Or we can just do photography or social media.
00:02:39And that has always been the vision.
00:02:41We wanted Apple Music to be a service for fans.
00:02:44And we wanted it to be a platform for artists to sort of express themselves beyond just sort of their
00:02:48new releases.
00:02:49Yeah, well, OK, I think it's really interesting how much y'all have leaned into radio
00:02:53and these very bespoke shows that are so unique to Apple.
00:02:57In an age where everyone wants hyper-personalized, algorithmic, or it seems like most other services,
00:03:03whether it's social media or streaming services, are leaning more towards hyper-personalization, algorithmic recommendations,
00:03:08why do you guys like the kind of immovable format of a radio show?
00:03:14Well, we believe in both.
00:03:16Yes, people want a very personalized experience.
00:03:19But at the same time, they also want recommendations from experts.
00:03:22And human curation was always sort of one of the number one core propositions of Apple Music.
00:03:27That's why we ended up hiring real music experts across the whole company,
00:03:32not just sort of our radio hosts like Zane Lowe.
00:03:34So we wanted it to feel like there's music experts curating our playlist, writing our editorial,
00:03:43or making sort of merchandising decisions.
00:03:46And we do believe customers want both.
00:03:48They want a very personalized experience, yes.
00:03:50But they also really want recommendations from people who are like, you know,
00:03:55that's existed as long as music existed, where you go in a record store and it's like,
00:03:58recommend me a great new album.
00:04:00I'm interested in jazz or blues, but I'm not an expert.
00:04:03And that has always been the philosophy of Apple Music, to combine the both.
00:04:07And we always say at Apple, we sort of live at the intersection of the liberal arts and technology.
00:04:11That is actually a true expression of that.
00:04:15You want the liberal arts represented by music experts and by fans,
00:04:20but you also want the technology to make that a personalized experience.
00:04:23Now, you mentioned radio before.
00:04:25Actually, we don't even call it radio internally anymore.
00:04:27Sure, we have now six radio stations worldwide with radio students around the world.
00:04:33But when an artist comes in, whether they want to be on radio or want to do something else on
00:04:38the service,
00:04:38we don't actually really care.
00:04:40We just want to work with artists.
00:04:42That has always been sort of our number one proposition.
00:04:44Yeah, yeah.
00:04:45Radio being a very loose term because obviously most people are probably consuming this online on Apple Music.
00:04:50Correct, yeah.
00:04:51Yeah, okay.
00:04:52Yeah, so one of the things I think is really interesting about music streaming services specifically,
00:04:58and you're also across Apple TV and all these other verticals.
00:05:01So I know you know this well, but streaming video on demand, the video side of streaming,
00:05:06all of those services are super differentiated.
00:05:09They have totally different libraries.
00:05:10You know, you can't get Euphoria unless you get HBO or whatever they're calling their streaming service right now.
00:05:17You can't get Severance without getting Apple TV+.
00:05:19But music streaming is really interesting to me because the library is essentially the same.
00:05:25There are some small differences.
00:05:26Not just essentially, yeah.
00:05:27Yeah, it's basically the same.
00:05:29And so how do streaming services differentiate each other when the library and the product,
00:05:36I guess, that you are offering is kind of the same?
00:05:39So tell me a little bit about how you guys think of it.
00:05:42Yeah, well, first of all, digital music, any digital music that's been around,
00:05:47we sort of started it in 2003 with iTunes.
00:05:49It's really awesome for fans around the world.
00:05:51And I think music streaming, the services are some of the best products ever invented
00:05:57because you get all the music ever recorded in your pocket.
00:06:00It works anywhere in the world.
00:06:02It works on any device, in any car, wherever you go.
00:06:07And you pay, I don't know, Apple Music is $10.99 for that.
00:06:11I think that's a great product.
00:06:12And it's been a wonderful opportunity for the industry to grow and the market to grow
00:06:16and everyone sort of being compensated.
00:06:18So check.
00:06:19That's great.
00:06:21The music industry, in fact, the labels have made a decision that they didn't want to do exclusives
00:06:25and they want everyone to have the same catalog.
00:06:28I'm not going to comment on that.
00:06:30That's their decision.
00:06:30That's the way they run the business.
00:06:31It is what it is.
00:06:32But you're right.
00:06:33There's a bunch of services and they all look from a content perspective kind of different.
00:06:37In fact, what we're doing with our artist relations and Apple Music Radio and our studios
00:06:43is probably the most unique and the most bespoke and the most exclusive of anyone.
00:06:49But I agree with you.
00:06:50Everyone has like the same 150 million, 200 million songs.
00:06:53I think Apple Music is really different in three aspects.
00:06:56First of all, we're all about music.
00:06:59We have no interest in making Apple Music an audio supermarket where there's like podcasts
00:07:04and tutorials and other audio products.
00:07:08We think a music fan wants a pure music experience.
00:07:12And we put our heart and soul into, I don't know, working with artists on making more than
00:07:17just the music as I just described.
00:07:19And obviously, we have Apple Podcasts and we're proud of that.
00:07:22And it has hundreds of millions of users.
00:07:25And it's been a great success.
00:07:26But we keep those worlds separate.
00:07:28The second thing is we're all about quality.
00:07:32If you line every service up, we want to be the service that's the quality service.
00:07:35And it starts with the audio quality.
00:07:37We sort of came out with spatial audio with Dolby Atmos in 2022.
00:07:41That's been a huge hit.
00:07:42And 90% plus of our customers are consuming music in spatial audio.
00:07:47We have lossless as well.
00:07:49And we take really great care and pride in the overall audio experience on our platform,
00:07:55pushing the envelope, got personalized, like spatial audio.
00:07:58So there's more technical work happening there to make the audio experience just the best
00:08:02of the best.
00:08:03And that's something only Apple can do because we were able to work with our hardware team,
00:08:07our software team, our services team on creating a new industry standard that you really needed
00:08:13all those three components.
00:08:15But it's not just audio quality.
00:08:17We think that the curation by people is always going to be higher quality than if you leave
00:08:21it up to, I don't know, robots or machines.
00:08:24And so we hired quality people to make the experience.
00:08:27And that's all the way down to like design, look and feel.
00:08:33We believe in actually we're not really, we don't really have many or any features that
00:08:39are out in beta that we're just throwing out there and testing.
00:08:41We want our features to be high quality features when we launch them.
00:08:44That's actually really interesting.
00:08:45I've never noticed that you guys really never launch anything.
00:08:48I wouldn't say never.
00:08:50That's not the case.
00:08:51Like the last time you did it.
00:08:52That's right.
00:08:52I think a really good example, by the way, in quality that what we do is lyrics.
00:08:56Lyrics is one of our most popular feature.
00:08:58More than 60% of our subscribers use lyrics every month.
00:09:02And by the way, other services have lyrics.
00:09:04I mean, we started it, but it's not.
00:09:06But the way we treat lyrics is really different.
00:09:08We're not crowdsourcing them from the internet.
00:09:11We have a team of people in my ops team that takes really great care and pride in making
00:09:17sure that it's the exact right lyrics and that they're time synced word by word exactly right
00:09:22and we have a design team that makes them look beautiful.
00:09:25Well, wait.
00:09:25So do the labels not just provide you with lyrics?
00:09:29They, some do a little bit.
00:09:31Okay.
00:09:32It's a little complicated because technically the rights sit with the publishers, but they
00:09:36don't have the lyrics.
00:09:37Yes.
00:09:37The labels, you know, some do.
00:09:41Yeah.
00:09:42So do you have to pay like a lyric licensing fee even though you're doing the legwork?
00:09:46Absolutely.
00:09:46Yeah.
00:09:47Okay.
00:09:47Interesting.
00:09:48And when I say quality, and I'm sure we'll talk about this, for us, it's also quality in
00:09:51the relationships we have with artists, with songwriters, with our partners.
00:09:56And we're very proud of that.
00:09:57We're in the music business because we like music, not because we can make a ton of money
00:10:02in streaming.
00:10:03So for us, the relationship with artists is way more important than others.
00:10:07And then the third thing, as I just mentioned, artists and songwriters is for us, it's all
00:10:11about, we make every decision when we wake up in the morning or when we go to bed in
00:10:15the evening, what's good for artists and songwriters.
00:10:18And so we have, there's so many things we haven't done and so many things we have done
00:10:21because we think it's the right thing for them to do.
00:10:23And that's why we are in the music business.
00:10:25And if you look at Apple, you realize between we've got Logic, we've got Garage, we've got
00:10:30all these other artist services.
00:10:31And so between our focus on music and our focus on quality and our focus on artists
00:10:36and songwriters, I think those are the three things.
00:10:38And you can feel that.
00:10:39You can ask artists around, it's like, how much do they work with us versus anyone else?
00:10:42I think you get a very clear answer.
00:10:44Yeah.
00:10:45I mean, I feel like that actually sums up all the different things that we should talk
00:10:48about in this conversation.
00:10:50But I'll start by throwing it back to one of the first points you made in that, which
00:10:54was about exclusives.
00:10:55Because that was once a thing in early streaming, which is so fascinating to me.
00:10:59This was before I was in the industry, but obviously I was a consumer at that point.
00:11:03And so I was seeing it play out in real time.
00:11:05I mean, throwing it back to early exclusives, like Jay-Z was doing a lot of that with Tidal
00:11:10as he was trying to prop that up and make people sign up for Tidal.
00:11:13We've done exclusives.
00:11:14Y'all have done a lot of exclusives.
00:11:16I mean, well, okay.
00:11:16So correct me if I'm wrong, did exclusives kind of end after Frank Ocean dropped the
00:11:23Endless music video?
00:11:25Or, I mean, it's not a music video, it was a visual album.
00:11:27And then 24 hours later, he followed it up with Blonde with Apple Music.
00:11:31Is that kind of the time period when it started to shift away from exclusives?
00:11:35I don't actually know the exact time because I was actually, I've been at Apple 22 years,
00:11:39but I was actually in London at that time.
00:11:41I spent the first 14 years in London.
00:11:43So I don't know what the exact sequencing is.
00:11:44But at some point, the labels decided not to do exclusives anymore.
00:11:48The reason why I regret that, by the way, is because I think there's a real danger that
00:11:52an album release these days isn't as special anymore as it used to be.
00:11:59And you have a few artists, like Taylor Swift or Harry Styles, who can make it special because
00:12:04of who they are.
00:12:06But in general, I think sort of the Friday being a new release day, it doesn't really
00:12:12have the same magic like a new release day, I don't know, 10 or 20 years ago.
00:12:16And I do actually think that when some services, it doesn't have to be hard, have something
00:12:20exclusively, they'll go the extra mile to shout from the rooftop about this particular
00:12:26release.
00:12:27And anyway, but it is what it is.
00:12:29I can't change it.
00:12:30There's a lot of things I don't like in the industry.
00:12:31Yeah, fair enough.
00:12:33So I can't really change it.
00:12:34So fair enough.
00:12:35What's another thing you don't like in the industry?
00:12:37Oh, I'm sure you heard me say that I think free was a terrible idea.
00:12:41Oh, yeah.
00:12:41It was probably the...
00:12:42We can get into that.
00:12:44We need to get into that.
00:12:45Yeah.
00:12:46Well, OK.
00:12:46I mean, yeah, let's actually get into it.
00:12:48So Apple Music does not have a free tier.
00:12:50We're the only service that doesn't have a free tier.
00:12:52And we're actually, believe it or not, really proud of that.
00:12:54OK, so I do imagine this is tough with like maybe customer acquisition in certain markets
00:13:00where there's not a lot of consumer buying power.
00:13:02But tell me about like the philosophy behind that and why you guys don't want a free tier.
00:13:08Well, I think there's two things.
00:13:09And this is my personal view.
00:13:10First of all, we really look at music like art.
00:13:13I talked to you before about the intersection of liberal arts and technology.
00:13:16I mean, we think when an artist spends nine months in a studio to make a piece of and
00:13:21a body of work, no one in the world should think it's OK to give that away for free.
00:13:25And if you look at like, I don't know if you watch Pluribus, it's one of our shows
00:13:29on Apple TV.
00:13:30And it was like in the beginning of the year, it was the biggest and the hottest TV show
00:13:34on the planet.
00:13:35The only way to watch Pluribus was you had to sign up to Apple TV.
00:13:39I mean, we have a free trial, so you can binge it in the first week, technically.
00:13:44But you can't just go anywhere on the Internet and consume all those shows for free.
00:13:48And the same is true, by the way.
00:13:50I could have picked any Netflix show, any Disney show or so.
00:13:53I think it's not the right thing for songwriters and artists to just say, you know what?
00:13:57I'm going to take this and give it away for free, especially with the very little monetization
00:14:06that artists and songwriters get in return from the free service.
00:14:08Yeah, yeah, yeah.
00:14:09I mean, the free tier, to explain if there's someone who's listening that doesn't really
00:14:12understand this, those are usually ad-supported.
00:14:14And they do have royalty rates, but the royalty rates are lower.
00:14:17Yeah, and it's widely reported what the ad revenues are on the free tier.
00:14:21So I think that's the first problem.
00:14:23The second problem is more of a business problem, in my view, is the fact that all
00:14:28paid services have to compete with free means, at the end of the day, not enough people
00:14:33are paying because they can get it for free.
00:14:36And the paid services can't actually charge the correct price for the service because
00:14:41they're always competing with free.
00:14:43Let me tell you what I mean by that.
00:14:45There's about, and don't quote me on the numbers.
00:14:47You're better with the industry numbers than I am.
00:14:48But there's about, call it, 850 million music subscribers in the world-ish.
00:14:53Yeah.
00:14:53I think there's about 2.8 billion video subscribers in the world, or people who have subscribed
00:14:58to any of the video services, whether the local service in India and China, Netflix,
00:15:02Disney+, us, and so on and so on.
00:15:04So you wonder, well, wait a minute.
00:15:05Why do so many more people subscribe to a video streaming service than to a music streaming
00:15:11service?
00:15:13And then the other thing you notice is that the video streaming services are all more expensive.
00:15:16Well, you know what?
00:15:17Because you can't get any of their content for free.
00:15:20They're not competing with free.
00:15:21They're offered for free.
00:15:22And in fact, when they have an ad service, they actually charge money for the ad service.
00:15:26Yeah.
00:15:27But the music industry thought, which by the way, in the early days when, you know, we
00:15:31were coming out of file sharing and iTunes was a hit, we were building up a digital,
00:15:34that might've been a good idea.
00:15:36But 15 years later, do we still need to give away art for free?
00:15:41I think that's a bad business decision.
00:15:43But anyway, we've said this, we say this all the time.
00:15:46We've completely made our peace with it.
00:15:48It is an industry decision.
00:15:50There are some people who just simply can't afford to get a streaming subscription.
00:15:55And so, you know.
00:15:56But they all, maybe they all have a video service.
00:15:58I mean, I mean.
00:16:00Some of them.
00:16:01Sure.
00:16:02Yeah.
00:16:02I think if you do the math and it's hard, obviously, I understand it.
00:16:06It's hard to put the genie back in the bottle.
00:16:07I get that.
00:16:08But I actually think it's the wrong thing for artists and songwriters.
00:16:12If you, like us, if you look at music like a piece of art, it should not be free.
00:16:16I can't think of any other piece of art that is free.
00:16:20And secondly, I actually think it's not good for business.
00:16:22But anyway, we have, our focus on not having a free service was mostly for the first argument.
00:16:29We were like, look, we're, Apple has been, I always say, like, we have music in our DNA.
00:16:35We've been in the music business for 50 years.
00:16:36Because if you go back, when Steve built his first products, he always had the creatives in mind.
00:16:43Whether it's musicians or filmmakers or photographers.
00:16:48I mean, that was sort of our lane, has been our lane for 50 years.
00:16:52And so, we look at life as a marathon, not a sprint.
00:16:57And we can't imagine, oh, wait a minute, like for a decade now, let's give away art for free.
00:17:02So, anyway, that's our view.
00:17:04Yeah, no, I hear you.
00:17:05I mean, I feel like Apple Music is in such an incredible position because there's so many other facets to
00:17:11Apple.
00:17:11And so, it makes it so you guys have a lot of freedom to play with Apple Music.
00:17:15Because it's just one part of an overall huge company.
00:17:19Apple Music can't afford to not make music, not make a free tier to their music service.
00:17:25But maybe something like a Spotify that's just relying on streaming as its only source of income might not be
00:17:32able to do that.
00:17:33Well, I don't want to comment on any of our competitors.
00:17:35But if you look at them in aggregate, the monetization of the free service is so poor and so little.
00:17:40It's not like it's paying the bills for them.
00:17:42It's, I would argue, it's the cheapest marketing mechanism in the world where the labels have given everyone the right
00:17:51just to basically do free marketing.
00:17:53I was like, take all our content and use it for marketing and then upsell.
00:17:57But it is what it is.
00:17:58I think we made our point.
00:18:01I've been, as I said, I've been at Apple for 22 years and been part of iTunes and Apple Music
00:18:06from the beginning.
00:18:07And we've not really ever had a meeting where we were like, let's build a free service.
00:18:12I mean, obviously, we talked about what it means not having one and everything.
00:18:15But we don't think it's right for artists and songwriters, full stop.
00:18:19Yeah.
00:18:19Yeah.
00:18:20Well, okay.
00:18:20So, moving on to high-fidelity listening.
00:18:23That's been a really big trend in streaming over the last five years or so.
00:18:27And we kind of saw a couple of years ago that every streaming service was creating their own version of
00:18:33a high-fidelity listening service to up the quality.
00:18:36I mean, Spotify has ended up only debuting this year, but they announced plans around the time as Apple, Amazon,
00:18:42etc. did.
00:18:43Going back to what I was saying about how Apple Music is one part of such a larger company, obviously,
00:18:48you guys are selling great headphones.
00:18:50How often do the conversations about your hardware products come into play with your Apple Music products?
00:18:56Apple is a functional organization.
00:18:58So, there's a lot of teams in the company that sort of sit side by side.
00:19:03But to the consumer, the magic really happens when the hardware, the software, and services talk to each other and
00:19:09build great experiences.
00:19:12And I actually think that spatial audio and the work we did with Dolby Atmos is almost one of the
00:19:17best examples for it that I can remember in my time at Apple.
00:19:21Because if you look at audio, audio standards are hard.
00:19:24And if you look back over, like, I don't know, 60 years, there's only really been mono for, I don't
00:19:30know, parents or grandparents.
00:19:31And then that went to stereo, and that was a thing.
00:19:33And, you know, the music came from two sides.
00:19:34In fact, it was just from one side.
00:19:35That was great.
00:19:37But then there was really nothing.
00:19:38Some people, especially sort of in Asia and Japan, have tried to establish another format.
00:19:43But we wanted to really, and this was a long time ago.
00:19:48We launched it in 2022, but we started years before that.
00:19:51We wanted to create a new standard that had really two distinctive sort of criteria.
00:19:58One is we thought it was important that people, general people, fans, can notice a difference.
00:20:06And number two, we wanted it to work on as many, if not all, devices possible, if not all devices.
00:20:11Not just Apple devices, but just in general.
00:20:14And so here's here.
00:20:15So lots of people said, lossless is the answer.
00:20:17And I heard this from record labels, like, you've got to do lossless.
00:20:20What they didn't notice is that lossless actually doesn't work over Bluetooth.
00:20:24So when you have an unwired connection, lossless doesn't actually work.
00:20:29And so there were lots of people, and you know, in the days of AirPods and wireless headphones, the vast
00:20:35majority of people didn't have wires.
00:20:37And so there were lots of people using lossless services or listening to lossless music out there, not even noticing
00:20:43that they weren't actually listening to lossless.
00:20:45Yeah, I was going to say that.
00:20:46I feel like the thing about hi-fi that I find to be a little bit tricky is that your
00:20:50average person really isn't that attuned.
00:20:53Correct.
00:20:53Well, and that's my second point.
00:20:55My second point is if I did, honestly, if we did an anonymous lossless test here on just an iPhone
00:21:00with headphones, I'm not sure you and I, and you and I work in the industry, and I assume you
00:21:04like sound as much as I do.
00:21:06But I can tell you most fans wouldn't immediately notice a difference.
00:21:09Yeah, I don't think so.
00:21:10But that's what we did with Spatial Audio, and this required really collaboration.
00:21:14By the way, not just with an Apple, but with lots of people.
00:21:16We worked with Dolby on creating a sound where it's not just from two sides, but it really comes from
00:21:19everywhere.
00:21:21And it actually worked on pretty much all devices, all headphones, all of our stuff, but on iPhone, on Mac,
00:21:27but also on pretty much any other device.
00:21:29It only had one downside.
00:21:31There were only like roughly 5,000 songs in the world that had already been mixed and mastered in sort
00:21:37of Spatial Audio.
00:21:38And so we needed to go and upgrade all the studios in the world and also educate the sound engineers
00:21:45of what this new canvas would look like.
00:21:47But the good thing is for the sound engineers, this is way better than what they had before.
00:21:52Before, they had a restriction.
00:21:53It was like, does it come from this or does it come from there?
00:21:54Now they have the music can come from here, from there.
00:21:57And I remember my meetings at Abbey Road with the team there, and they were like so excited about having
00:22:03this opportunity.
00:22:04Well, it's like more jobs for them, too.
00:22:06That's right.
00:22:06Yeah, yeah, yeah.
00:22:07Well, but I don't look at it that way.
00:22:09I look at it more like more creative freedom.
00:22:11Okay.
00:22:12And the great thing is with Spatial Audio is you immediately, everyone notices the difference.
00:22:17Yeah.
00:22:18Because the music just doesn't come from two sides, it comes from all over.
00:22:21And the vast majority of people, I'm not saying 100% of the people, but I mean, we've had very,
00:22:25very few sort of negative comments.
00:22:27The vast majority of people think it's better.
00:22:29Just like when we went from monitor stereo, the vast majority of people thought that was better.
00:22:34And so we had to do the work to get the catalog updated.
00:22:39But we're now getting, I think it's in the 90s or so of our top songs, top albums that are
00:22:44delivered in Spatial Audio.
00:22:46Customers are loving it.
00:22:47We still get emails and comments about it.
00:22:49The customer satisfaction is super high.
00:22:52And we also gave it to everyone.
00:22:54We didn't force people to test it and sign up to a higher tier.
00:22:58So we made it super simple.
00:23:00I'm very proud of that.
00:23:01That does create a lot of new jobs for engineers, but that also does kind of create more work for
00:23:06the labels.
00:23:06I imagine that's maybe why they liked the idea of Lossless.
00:23:09Isn't that probably an easier step for them to take than moving all the way to Spatial?
00:23:13Yeah, but easier isn't always the right answer.
00:23:16Sure, we had everything in Lossless, probably from day one.
00:23:22I give a huge thank you and an applause to the labels for supporting us on this journey.
00:23:28But remember, they're also creatives.
00:23:31And they like the idea of giving the artists better tools for the music just to sound better.
00:23:38And I don't know, we have a spatial audio listening room here, which you probably have seen before.
00:23:43And you sit in there and you hear some of the great work in there.
00:23:46It just is mind-blowing.
00:23:48And it sounds absolutely incredible.
00:23:49And there's no way any of our customers or we would ever want to go back.
00:23:53And the labels feel the same about that, too.
00:23:55Yeah, yeah.
00:23:56I do feel like that is one of those instances where it has built upon all of the pillars that
00:24:02Apple is succeeding in.
00:24:03And, I mean, I use my AirPods every day, being able to use...
00:24:07Yeah, great product.
00:24:08I have...
00:24:09Well, the only thing about the product that is not great is that I keep losing them.
00:24:13And then I have to buy new ones.
00:24:15But that's more of a personal issue.
00:24:17But, yeah, that makes sense.
00:24:18You can just find mine.
00:24:18Yeah.
00:24:19Also a great product.
00:24:20I know.
00:24:20Also a great product.
00:24:21You know what?
00:24:21My problem is that I will leave them on airplanes.
00:24:24That's a big thing.
00:24:25In the back pocket, you don't see it.
00:24:27That's a problem.
00:24:29Well, I mean, not to advertise here, but one of the businesses I run is Beats.
00:24:33And we make beautiful colors, so I don't know.
00:24:35Well, okay, so why keep Beats when you also have the AirPods?
00:24:40Because they're very similar, like what you're showing right here.
00:24:43Yeah.
00:24:44So Beats has been around for about 20 years.
00:24:46It's been a part of Apple for 10 years.
00:24:48And we bought Beats, actually sort of 11 years.
00:24:50We bought Beats at the time iTunes was incredibly successful, but it was a transactional business.
00:24:56And we knew that streaming was going to be very different.
00:24:58They had just sort of announced and launched Beats Music.
00:25:02We loved the team.
00:25:03We had a great relationship with Dre and with Jimmy and everyone there.
00:25:07And we thought it was a good idea to bring Beats Music in to help us build Apple Music.
00:25:13But also we were excited about the opportunity to build Beats headphones into the Apple system and make them more
00:25:23successful.
00:25:24Especially at the time, they were very much a U.S. or an Anglo sort of American business.
00:25:28Yeah.
00:25:29And it's been wonderful.
00:25:30I've been working with the Beats team for the last six, seven years.
00:25:35It's a great business.
00:25:36It's doing incredibly well, growing.
00:25:38We have a totally complementary product to AirPods.
00:25:43We have over-ear, in-ear products.
00:25:45We have them in multiple colors.
00:25:48We're actually, interesting enough, you don't know this, we're optimized for both operating systems.
00:25:54So we work on iOS with all the features just as great as we work on Android.
00:25:57You know, Beats has always been on that fitness and music and sports lane.
00:26:01So I think, to me, it's the brand that has found the intersection between sort of sports and music and
00:26:10has always been.
00:26:11Absolutely.
00:26:13And has always pushed the envelope, supported the underdog, great marketing.
00:26:16Such good marketing.
00:26:17And I'm super proud of the work that the team does.
00:26:20And it's another sort of company in our music portfolio that most people probably don't actually ever really think about.
00:26:30Yeah.
00:26:30They sort of forget that Beats is part of Apple.
00:26:34And they sit in the Apple Music building as well.
00:26:36Yeah.
00:26:36So, I mean, yeah, you see them as very branded in different ways towards different consumers.
00:26:41100%.
00:26:42Yeah, yeah, yeah.
00:26:42That makes sense.
00:26:43Yeah.
00:26:44Okay.
00:26:44So did you catch this recent interview that Jimmy Iovine did with David Senra?
00:26:49I caught some of it, I think.
00:26:51Okay.
00:26:52So I wanted to get your take.
00:26:53Definitely caught some headlines, I think.
00:26:53Yeah.
00:26:54It got some headlines.
00:26:55It was also like two hours long.
00:26:57So there was a lot to sift through in there.
00:26:59There were a lot of things you could pick out.
00:27:01But he had some really hot takes on streaming.
00:27:04And I just wanted to get your take on it.
00:27:06I have it written down here because I didn't want to have it wrong.
00:27:09But he said, streaming services are minutes away from being obsolete.
00:27:12It's one dimensional.
00:27:14It's an ATM machine.
00:27:14You put your money in and you get your music.
00:27:17They don't do anything for the artist.
00:27:19The artist wants to communicate with their fans, period.
00:27:21That's what they want.
00:27:22They want to communicate.
00:27:23They want to market themselves.
00:27:24And streaming services are saying, we'll put you on our list if you're nice to us or if you like
00:27:28us.
00:27:28That's bullshit.
00:27:30What do you think?
00:27:31Well, first of all, Jimmy is the greatest.
00:27:33We have a great relationship.
00:27:35I see him as often as I can.
00:27:37I'm co-located between the Bay Area and here.
00:27:40And, you know, we worked with him very closely for all those years before he retired on Apple Music.
00:27:46And I think he sort of summed up in Jimmy's words what kind of what I said before is like,
00:27:51artists want more from streaming than just, you know, a jukebox in the sky.
00:27:57That's anonymous where you press the button.
00:27:59Oh, I knew this album.
00:28:01And so that is the reason why we built our studios.
00:28:06That's the reason why we think artist relations and working with artists on more than just the music is so
00:28:14incredibly important.
00:28:15And, you know, Jimmy likes to be provocative.
00:28:17I think that's great.
00:28:18He wants to push the envelope.
00:28:20And that's awesome.
00:28:20Obviously, we've got some challenges.
00:28:22And he was referring to AI for those people who didn't hear the full interview.
00:28:25That's very Jimmy.
00:28:25But I think he's an incredible supporter of the creatives, of artists.
00:28:31And this is when we partnered with him on building Apple Music, the number one thing that I personally, we
00:28:38all learned from him.
00:28:39Yeah.
00:28:40And, I mean, you've been in the music tech world for a long time.
00:28:43You've been at Apple for a long time working on music and music products.
00:28:46I mean, back in the day, the idea even when iTunes was out is people could conceive of streaming.
00:28:53They could imagine that it's possible in the future.
00:28:55There were a lot of logistical challenges.
00:28:57This is such a huge paradigm shift in the music industry.
00:28:59I think maybe fans underestimate just how big of a challenge it was for the record labels and the publishers
00:29:04and everyone to get aligned on how streaming could work and how that business model could work.
00:29:10Even back in the day, in like the early 2000s, you could conceive of streaming being the next wave.
00:29:14I kind of can't conceive of what is after streaming.
00:29:19Can you conceive of anything?
00:29:20Is there anything that you see behind the sky?
00:29:22By the way, let me add to that.
00:29:23You might not know this, but before I joined Apple, I was actually at Napster.
00:29:26I did know that.
00:29:27I was here in San Francisco.
00:29:29It had just been sort of the service had just been shut down and we were working on a subscription
00:29:33service.
00:29:34I don't remember what price points we had in mind.
00:29:36It was probably a little lower, but the idea was to charge one price and you have access to all
00:29:40the music ever recorded in a service.
00:29:43Why do you think that didn't work out?
00:29:46Oh, we probably would have to add another hour to this.
00:29:50Probably a little distrust from labels.
00:29:52I think for three reasons.
00:29:54Number one, what really started the Ditcher music revolution, in my view, was the iPod.
00:30:02It was the idea that you can take your music with you, like in the old days of Walkman or
00:30:09so.
00:30:09And sure, there were other MP3 players out there, but they were all terrible.
00:30:14And the iPod was amazing.
00:30:15And this idea of putting a thousand songs in your pocket really started the whole thing.
00:30:19And when Napster was out, there was really no hardware.
00:30:23I mean, no hardware that was working really well.
00:30:25And imagine today if all your music was on a computer at home in one of the rooms.
00:30:31It wouldn't be the same.
00:30:32I think that's the first thing.
00:30:33The second thing is I truly believe the industry wasn't ready.
00:30:36There was no licensing model.
00:30:39There was no catalog.
00:30:40There was no...
00:30:41We started iTunes.
00:30:43I was in London in 2004 when we launched in the UK, Germany, and France.
00:30:47We started with 400,000 songs.
00:30:50And, you know, now everyone has like hundreds of millions.
00:30:53A hundred million plus?
00:30:54Yeah.
00:30:54And so it took the industry actually quite a moment to even get to the 400,000 songs.
00:30:59All cleared, all licensed.
00:31:00And, you know, and so that wasn't available in the Napsters.
00:31:03And thirdly, the company had so many legal issues.
00:31:05Yeah.
00:31:06Whether they were right or wrong.
00:31:07I don't want to comment.
00:31:07It doesn't matter.
00:31:08But forget about that.
00:31:10The idea of creating a service where you'd have access to all the music in the world, I agree with
00:31:17you, was not actually a new idea.
00:31:19Yeah.
00:31:19To your question, one of the things I'm really proud of is how we have developed the product, especially over
00:31:26the last sort of 18 months, two years.
00:31:28We're laser-focused, as I told you, we're laser-focused on just the music experience and Apple Music.
00:31:34And you can go on Reddit and they're all like, wow, you guys have shipped more features in the last
00:31:37six months than, I don't know, in the time, whatever time before.
00:31:40And it includes great AI features like automix or Playlist Playground or doubling down on listening experience or lyrics or
00:31:47improvements to library, like library pins and so on.
00:31:50So we're concerts, all these things.
00:31:52We need to continue to make our product better and better.
00:31:58There's new technologies and we need to obviously play with them.
00:32:03There's immersive experiences.
00:32:04We looked at NFTs originally.
00:32:06Now there's AI.
00:32:07There's always something.
00:32:09And I think I go back to having access to every song ever recorded on your fingertips, on your iPhone,
00:32:19anywhere in the world.
00:32:20There's no blackout windows.
00:32:22It works.
00:32:22You can rent a car.
00:32:23It's not even your own car.
00:32:24You plug it in, you go Bluetooth, and it works.
00:32:27It's an amazing product.
00:32:28I think our responsibility is to continue to double down.
00:32:33And, you know, we're a product company.
00:32:35We're all about innovating.
00:32:37We've got an incredible roadmap ahead for the sort of next few years.
00:32:40And we're super excited about the future.
00:32:42Yeah.
00:32:42I mean, I just kind of don't see how it gets better for the consumer than streaming.
00:32:46And I do think in music, the consumer kind of always wins.
00:32:49It's like whatever they want.
00:32:50I mean, that's kind of how people started adopting Napster back when it was just file sharing.
00:32:55Because they were like, okay, free music?
00:32:57Hell yeah.
00:32:58Let's do it.
00:32:58I mean, CDs were $20.
00:33:00I actually disagree with you on that.
00:33:03Sure.
00:33:04I don't think people use Napster because it was free.
00:33:06Sure.
00:33:07That was an incredible job.
00:33:08But wait a minute.
00:33:09It was also having the access to the music at the time was impossible.
00:33:13You had to go to like Times Square during opening hours.
00:33:16And they only had like 20,000 records in the store.
00:33:18And I think at the time, it was the largest record store in the world.
00:33:21I used to work in that building on top of that at BMG.
00:33:24Oh, wow.
00:33:24And so, but if you weren't close to a record store like this, you wouldn't even have access
00:33:28to it.
00:33:28And so, it was the access.
00:33:31Sure, it helped a ton that it was free.
00:33:32It started as a student movement.
00:33:34So, I get all of that.
00:33:35Yeah.
00:33:35But it became mass marked very quickly because you could go to a show and the next day you
00:33:41could, you would have access to, maybe I was at a Bruce Springsteen show last night
00:33:44and I don't know, you have all of a sudden you have access to these recordings, which
00:33:48is kind of what maybe you get on YouTube today.
00:33:50Yeah.
00:33:51But I think it was access as much as it was free.
00:33:55And the access we've solved, which is great.
00:33:57Totally.
00:33:57I mean, now everyone has access to all this great content.
00:34:00Yeah.
00:34:00Yeah.
00:34:00Well, okay.
00:34:01So, way back in the day when Steve Jobs was announcing iTunes, he did talk about how he
00:34:05didn't believe in streaming as the idea.
00:34:08He didn't think that people wanted to like rent music was basically the quote at the time.
00:34:12I'm wondering when do you feel like at Apple there was a shift when people started to get
00:34:18more interested in streaming as the next frontier for music?
00:34:21I don't know the answer to that.
00:34:23So, my journey at Apple was I moved for Apple to London in 2024 and was part of like a
00:34:30three
00:34:30man startup team.
00:34:32And our goal was to launch iTunes, the music store.
00:34:34And that's what I thought we were doing all along.
00:34:38And as many countries as possible.
00:34:40Okay.
00:34:40And believe it or not, when I started at Apple at that time, Apple didn't even have an office
00:34:46in central London.
00:34:47I mean, it's kind of wild.
00:34:48It was before we had rolled out the retail stores.
00:34:51Apple Europe was run out of Paris.
00:34:53And the sales office for Apple England was like far outside of central London.
00:34:57And so, the first thing we had to do is find office space.
00:34:59And then I spent 14 years traveling around the world to expand iTunes into as many countries
00:35:05as possible.
00:35:06We're now in 175 countries with our services, with most of them, including China and Australia,
00:35:14Japan.
00:35:14And I remember all these launches.
00:35:15And as you remember, we didn't start with music.
00:35:18A year later, it was podcasts.
00:35:20Then it was TV and movies and books.
00:35:22And we launched the App Store and news and so on.
00:35:26So, I think that was at a time when I was running around in the world trying to, I don't
00:35:30know, launch new countries or so.
00:35:31Did you ever meet Steve?
00:35:33I did.
00:35:33Yeah.
00:35:33Has he ever said any sage words of wisdom that have stepped in you?
00:35:38No.
00:35:39There's obviously many books written about him and the people that I work with have worked
00:35:43with him.
00:35:44And I think you look at Apple today and you see his handwriting and he'd be very proud
00:35:50because his focus was always on products, innovation and excellence.
00:35:56He always taught everyone to focus on a few things and do them really, really well.
00:36:00And I think that's what we're doing in Apple Music.
00:36:03We try to focus on a number of features and execute at the highest level and, I don't
00:36:09know, have the best product in the market and treat everyone with respect.
00:36:13Yeah.
00:36:14Well, you mentioned earlier Automix, which is one of your new features.
00:36:18It is AI-powered.
00:36:19So, not generative AI, but it's AI-powered.
00:36:22And it seems like all of the streaming services are trying to find at least small ways to integrate
00:36:28AI into the platform to make things more customizable.
00:36:31That seems to be a really big movement.
00:36:34I've heard the quote before, you know, the first part of streaming is getting your music
00:36:39to play.
00:36:40And then the second part is getting to play with your music.
00:36:42I am curious, though, what your roadmap is for using AI for customization of songs on
00:36:49the platform.
00:36:49I know Spotify is trying to work with the music industry to create some sort of remixing tool.
00:36:55I don't know what you guys have in mind.
00:36:57What's the roadmap for AI at Apple Music?
00:37:01Unfortunately, I can't tell you that because...
00:37:03I got to try.
00:37:04That would give away some secrets.
00:37:06You know, AI isn't exactly brand new.
00:37:08There's AI, machine learning.
00:37:09It's really a technology development that allows you to do things or allows you to do
00:37:16things faster or cheaper that weren't possible before.
00:37:19Automix is actually a great example.
00:37:20We shipped it last fall.
00:37:22It mixes songs together in a playlist like a DJ.
00:37:26That's not new.
00:37:27DJs do that.
00:37:28But it's just not scalable.
00:37:29Now we can give it to all of our subscribers around the world.
00:37:33And the feedback is actually...
00:37:35We've been overwhelmed.
00:37:35The feedback has been fantastic.
00:37:37And we, you know, again, we set some guardrails.
00:37:39We decided not to do it for albums because we look at that as a body of work.
00:37:42And we didn't want to...
00:37:44We thought artists have been very thoughtful about, you know, how the songs go in and out
00:37:49and how they start.
00:37:50But we decided for playlists and everywhere else.
00:37:53And I think our customers are loving it.
00:37:56Making a playlist is incredibly important in any streaming services.
00:37:59And it's hugely popular on Apple Music.
00:38:01We just launched a feature called Playlist Playground, which makes it super simple to make a playlist.
00:38:06You just put in a prompt.
00:38:07You can say, I don't know, make me a playlist for, I don't know, Sunday morning or a club night.
00:38:15Or I'm going to Coachella.
00:38:16Make me a Coachella playlist and so on.
00:38:18Those things were possible before.
00:38:19But this is now way easier, way faster.
00:38:23Hyper-personalized, to use your words.
00:38:25We don't call it that way.
00:38:26But if we personalize for you, you can even edit.
00:38:28It's like, you know what?
00:38:29I don't like this artist, but add this artist.
00:38:31And so we'll continue to use AI as a technology to improve Apple Music and the Apple Music listening experience.
00:38:43And sure, the idea of providing customers more lean-forward tools is a wonderful idea.
00:38:49Remember, most customers are pretty lean-back, though.
00:38:53I wouldn't say they're lazy, because that sounds negative, but they like their music to be lean-backed.
00:38:58That gives them the joy.
00:39:00You press a button, it plays music, it's personalized, it's your thing.
00:39:03Good.
00:39:04Yeah, I mean, that's like the whole benefit of a great editorial playlist.
00:39:08If I find a dinner party playlist or something, or a workout playlist, then I don't have to think about
00:39:13it that hard.
00:39:13I mean, that's actually one interesting development over the course of streaming, as it's become the dominant platform of music
00:39:20consumption, is that people really loved playlists.
00:39:24People were discovering stuff on streaming services.
00:39:26And then as TikTok took hold, there was a lot of discovery that started shifting over to social media and
00:39:31to TikTok specifically.
00:39:33And I'm wondering how you guys think about that.
00:39:36I mean, obviously, streaming services are still just as important, but they're more so the final destination for listening, rather
00:39:43than the discovery point.
00:39:45How are you guys thinking about that?
00:39:46And do you feel like that is an issue to lose discovery more towards social media?
00:39:51I personally think, I mean, social media is awesome.
00:39:54And I think the opportunity to discover music there is wonderful, and that's great.
00:40:02And especially because it's very much focused out to a younger audience.
00:40:06Given how huge social media is, though, I actually think that they could do even better at really discovering and
00:40:13pushing music forwards.
00:40:15It's not like you look at our top 100 and be like, oh, I mean, sure, there's always some TikTok
00:40:18songs in there and so on.
00:40:19Yeah, it's not always the stuff that goes viral online that actually ends up getting straight.
00:40:24So I think, again, we're all about the creatives.
00:40:27And so if other people are pushing trends and music, and what I love today is that, I mean, for
00:40:34kids, there's no difference between an old and a new song.
00:40:37Whether it's a Fleetwood Mac song or a brand new, I don't know, Harry Styles song, it's just music for
00:40:42them.
00:40:42So I love that.
00:40:43And if social media can help surface that, that's wonderful.
00:40:46And, you know, we work with TikTok.
00:40:47We've announced a partnership with them.
00:40:50And we have a lot of other ideas what we could do with them.
00:40:53And so we love that.
00:40:54I do think they could probably do more for Discovery than they're already doing.
00:40:57Yeah.
00:40:58Well, I mean, what would you have in mind?
00:40:59I don't know.
00:41:00Now you're speculating.
00:41:01We're not talking about the future.
00:41:02We're here to talk about today.
00:41:03Apple Music also has recently become the title sponsor.
00:41:06Not recently.
00:41:07Last couple of years.
00:41:08Four years ago.
00:41:09I think I know where you're going.
00:41:11Oh, my gosh.
00:41:12You talking about the Super Bowl?
00:41:14Yeah, yeah, yeah.
00:41:14Yes.
00:41:15Wait, wow.
00:41:16Okay, that's been four years now.
00:41:17It's been four years.
00:41:18We started with Rihanna.
00:41:19Then we had Usher, Kendrick, and Bad Bunny this year.
00:41:22I mean, that's a huge decision to make.
00:41:25This is obviously like the biggest advertising stage possible.
00:41:27So it's like a huge, wonderful look.
00:41:29But it is an expensive look.
00:41:31So how did you guys decide that this was the right opportunity and that Apple Music did want to be
00:41:36that title sponsor?
00:41:37Well, we've been doing live events for a very long time.
00:41:43Most people don't really know that.
00:41:46But we used to run actually a festival in the iTunes days called the iTunes Festival in London at a
00:41:51venue called The Rounders for 10 years.
00:41:53It ran for a month every year.
00:41:55So we had more than 660 artists on stage between opener and headliners.
00:42:02All recorded, all made available worldwide, all streamed worldwide.
00:42:05And we put the festival on pause because we wanted to just do other things.
00:42:10And so we have a monthly concert series that's called Apple Music Live, which are exclusive.
00:42:14Sorry, it's not quite monthly.
00:42:15It's sort of, I would say, maybe eight a year or so.
00:42:18Where we have live events that either we organize ourselves or we go to an existing live event that we
00:42:26shoot for our customers.
00:42:27And it's our own team producing these events.
00:42:31And this is a muscle of working with artists and producing live events that we've developed literally over two decades.
00:42:40And we can talk a little bit about Apple's 50th anniversary in a second because a lot of it was
00:42:44music.
00:42:44And so we were looking around and it's like, okay, what are the biggest live music events in the world?
00:42:50And there really is only one.
00:42:52The Super Bowl has like 200 million plus viewers.
00:42:56Look at the Grammys and the ratings.
00:42:58It's somewhere below 20 million.
00:42:59I don't want to quote, but it's like a tenth of that.
00:43:02And that would be the second biggest music moment in the year, leaving the festivals aside, which I think is
00:43:07a difference.
00:43:07And so we like operating at the highest level and working with the best of the best.
00:43:12And we think the NFL are an incredible organization and Roc Nation and Jay-Z's team are incredible.
00:43:18And so when we saw that opportunity, we thought we could come in and help to make the Super Bowl
00:43:25bigger, make it better, and make it more global.
00:43:28Those were our three goals.
00:43:29You know, we've broken the record ever since and every year.
00:43:34And it's been phenomenal to work with them.
00:43:38And I'm looking forward to next year.
00:43:39Yeah.
00:43:40Okay.
00:43:40So one of our episodes of the show, we did kind of try to get into Super Bowl halftime show,
00:43:44how that comes together.
00:43:45I heard that one.
00:43:45Oh, yeah.
00:43:46Well, there you go.
00:43:47There you go.
00:43:48We'll have to have someone from Apple Music on next time to talk about it.
00:43:50I definitely want to make that an annual thing because it's so much fun to talk about that event.
00:43:55I am wondering, I don't quite understand this.
00:43:58What is the division of roles between Roc Nation and Apple Music in booking the act and putting it on?
00:44:06Well, first of all, we have a very long relationship and partnership with them, with Jay, with Desiree.
00:44:11They're fantastic people.
00:44:13I think they're the best of the best.
00:44:14We love working with them.
00:44:15And so we have an ongoing dialogue that actually includes myself most of the time to talk about what would
00:44:22be a great short list.
00:44:23Ironically, and I would encourage you to that, that would be a great dinner conversation to just see, hey, who
00:44:28would you all book?
00:44:29The list is actually not very long.
00:44:31It's actually super short.
00:44:32This is the greatest, biggest stage on the planet.
00:44:35It is too big for some artists.
00:44:39And some artists have already performed.
00:44:41Some of the artists have already performed twice.
00:44:43Yeah, I know, like Bruno Mars is one of them.
00:44:45Yeah.
00:44:45Beyonce.
00:44:46Beyonce.
00:44:47Coldplay.
00:44:48Yeah.
00:44:48It's a fun dinner conversation.
00:44:50But we work with them in collaboration.
00:44:53Ultimately, they produce the show.
00:44:56Our team is fully involved in everything.
00:44:58So ultimately, I would say they have the last call to say, this is the artist.
00:45:03Okay.
00:45:03But we are in full alignment with them.
00:45:06And it's a great partnership.
00:45:08And I love the work that the team is doing.
00:45:11We had more than 4 billion total views for Bad Bunny this year.
00:45:15It was a total smash.
00:45:16Yeah.
00:45:17Worldwide, you know, it broke every record there is.
00:45:21And it was a beautiful show.
00:45:22And the views were fantastic.
00:45:25Yeah.
00:45:25And it's not just that.
00:45:26We really work very closely with the artists.
00:45:28We do, for example, the press conference.
00:45:31And this year's press conference, the press conference is always on Thursday morning at
00:45:3410 a.m.
00:45:35It's with the headliner, but also some of the support artists.
00:45:38We had 75 million viewers of the press conference this year.
00:45:42And this is sort of a production that we do.
00:45:44And Zane and Ibro were sort of the interviewers.
00:45:47We love the work.
00:45:49We look at it as a partnership.
00:45:52And we do it because we like operating at that level with the best of the best people.
00:45:59Yeah.
00:45:59I mean, I feel like it is undoubtedly the biggest stage in music.
00:46:05The only thing, though, is that the Super Bowl is such like an American thing.
00:46:08As a non-American, you probably get that.
00:46:10It's like football is so America.
00:46:13Well, you say that, but I go back to...
00:46:15Sorry, I didn't mean to interrupt you.
00:46:16No, you go.
00:46:16You go.
00:46:16No, you look at what the NFL does.
00:46:18I'm from Germany.
00:46:19And so they play games now in Germany and Ireland and the UK and Spain and Brazil and Mexico,
00:46:25Australia.
00:46:26Yeah, they're trying.
00:46:26And one of the things that Roger Goodell, he's the commissioner of the NFL, has done
00:46:29is really push the international roadmap.
00:46:31And you know that in most years, certainly in the years we've been involved, the halftime
00:46:36show gets more viewers than the actual game.
00:46:38Totally.
00:46:38And by the way, internationally, most people just watch the halftime show.
00:46:43And Bad Bunny, and remember Bad Bunny, he was an interesting choice.
00:46:46As much as he's the biggest streaming artist and has been for the last few years, he's
00:46:50actually not toured most parts of the world.
00:46:53He's never really had a proper European tour, for example.
00:46:55He's in Europe this year, right now.
00:46:58And so for him, this was a huge moment.
00:47:02And for international, it was a huge moment.
00:47:03And the viewership numbers, if you look at it, I mean, the viewership numbers in international
00:47:07were like crushing anything we've ever seen.
00:47:09It's amazing.
00:47:10One question that I have, it pertains to y'all's new policies around AI.
00:47:15Yeah.
00:47:16So you guys have recently announced a new policy.
00:47:18Do you mind explaining it?
00:47:19Because I feel like most people probably still don't know about what...
00:47:23Yeah, no, I can talk a little bit about AI, and then I can talk about the policy.
00:47:28Again, AI is a technology that our responsibility as Apple is to use it to make our products better,
00:47:35faster, whatever it is.
00:47:37And secondly, also allow people to use it in a responsible way.
00:47:42And, you know, technology has for the music industry, I know Michael Nash has said this
00:47:45recently, has always actually been good for the music business in all the various waves
00:47:51over the last 50, 60 years.
00:47:53And I really do believe AI has a ton of opportunities as well.
00:47:58The reality is today, what it does is allows anyone to make music because it's super simple
00:48:04and super fast.
00:48:06And there's nothing wrong with that.
00:48:07And what happens is people take the music and deliver it to streaming services.
00:48:11So when you look at our sort of monthly sort of intake, more than a third of what we get
00:48:18today is actually, what we would say is music that's 100% AI.
00:48:23We have developed, we've never talked about this, we've developed technology in-house that
00:48:27would allow us to exactly see what music people are delivering us, what AI it is, and this
00:48:32and that.
00:48:33And that's obviously important to know, so you can analyze when something's come in.
00:48:38Now, the reality is the usage of the AI music on Apple Music is really tiny.
00:48:43I'm going to say really tiny, it's like, and by the way, I'm rounding like to the lowest
00:48:47thing, it's like below like 0.5% of usage.
00:48:50And by the way, it's much lower than that.
00:48:52Wow.
00:48:52So usage is low.
00:48:54But by the way, we're just at the beginning.
00:48:56You could see a world where that grows.
00:48:57You never know.
00:48:59Where it gets really tricky is when fraud comes to play.
00:49:03Totally.
00:49:03And remember, I talked to you about, for us, the quality of the experience.
00:49:07We're obsessed about the quality of Apple Music.
00:49:09We have very high customer satisfaction.
00:49:11We've got the lowest churn in the industry.
00:49:13People love, people are subscribed to, love the product, and we want to get rid of fraud.
00:49:17And by the way, this has been a 20-year journey because there was fraud, obviously, in iTunes
00:49:21already.
00:49:22Totally.
00:49:23And so we have, we're investing way more than anyone else in reducing and eliminating fraud.
00:49:28And our fraud in Apple Music is like tiny, literally tiny.
00:49:31And so we have implemented a fraud penalty four years ago where if we catch someone, then
00:49:38we actually take the money and put it back in the pool.
00:49:40So it goes from fraudulent artists or labels to honest artists and labels.
00:49:45And so what's important is we need to monitor.
00:49:49There's a correlation between AI and fraud that needs to be monitored.
00:49:53That's one of the reasons why we just doubled the fraud penalty.
00:49:55First of all.
00:49:56Oh, so you doubled it.
00:49:57We've doubled it February 1 this year.
00:49:59Okay, wow.
00:49:59First of all, we don't like fraud full stop.
00:50:02Forget about AI for a second.
00:50:03But secondly, we were worried that maybe there could be more fraud with AI.
00:50:06And again, it doesn't have to be.
00:50:08We're assuming that.
00:50:09We've seen some.
00:50:10There is a correlation.
00:50:11There is some correlation.
00:50:12Yeah.
00:50:14But the good news is our fraud program and the fraud penalty works incredibly well.
00:50:21We've seen a 60% reduction sort of over time in fraud just because of the penalty.
00:50:25So we feel like that's totally under control.
00:50:30Okay.
00:50:31And now, which brings me to the last point is, okay, what is actually AI?
00:50:36And I've said repeatedly to all the CEOs and presidents of the labels, there needs to be an industry consortium
00:50:42where they come together and discuss what is AI.
00:50:46And by the way, that can't just be corporates.
00:50:48You need to have artists and songwriters in the room as well because there's nothing wrong with artists and songwriters
00:50:53using AI.
00:50:55Even 100%.
00:50:56But someone needs to then decide, well, what is AI, what's not AI?
00:51:01What we have done is we've – and this is really just an early step.
00:51:05We have put it on the content providers, labels, and distributors to say, hey, we want you to tell us
00:51:11when you're using AI.
00:51:12And we've created sort of basically AI flags.
00:51:15And we've said it's for the music, it's for the art, it's for the songwriting, and it's for the video.
00:51:22So there are four flags when you deliver content, and labels have started to actually use the flags.
00:51:26Have they really?
00:51:27They have, yes.
00:51:27I feel like that's the one thing that I was concerned about when I saw that is just, does that
00:51:31incentivize people to lie?
00:51:33Well, first of all, you should know every label in the world is delivering AI.
00:51:36They might not know about it because they themselves also need to develop tools to understand what's AI or not.
00:51:44Some of these labels deliver us a ton of content that's coming from all over the world.
00:51:49Luckily, we have – and we pushed on this really early.
00:51:52We have – our technology is really solid.
00:51:53We see exactly what's coming in.
00:51:55And so we have these flags.
00:51:57Right now, it's an honor model.
00:51:59There's no penalty or anything yet, but at least it gives us a foundation to say, then we know, and
00:52:04then we can figure out what do we want to do with it.
00:52:06But I really need that answer.
00:52:09I don't think we should make that answer.
00:52:11I don't think one of the major labels should give that answer.
00:52:13I think it needs to be a broader conversation that includes the creatives and that – I mean, artists and
00:52:20songwriters to define what is a reasonable and fair way to treat AI.
00:52:25Because overall, there's nothing wrong with AI.
00:52:28You and I could make a song here right now.
00:52:30That's great.
00:52:31It would be a really fun moment for us to make a song in AI.
00:52:34Anyway, so it's a journey.
00:52:36Yeah.
00:52:36That's very interesting.
00:52:37I didn't really realize that you guys had a detector kind of in-house that y'all were looking at.
00:52:43Well, so why not just use that to make the flags?
00:52:45Why ask people to disclose?
00:52:47Well, what are we flagging then?
00:52:49Well, I mean, also –
00:52:51And by the way, who's to say that we're not going to do that at some point?
00:52:54But I think we're at the beginning of something that the industry needs to figure out.
00:52:59And I strongly urge everyone that we need to come together because this has – this is not a particular
00:53:05label issue.
00:53:06This is sort of an industry issue.
00:53:08No, totally.
00:53:09And it's a responsibility for the music business.
00:53:12I don't even need to have a seat at the table.
00:53:14We'd like to have a seat at the table.
00:53:15But I think it's more important that the creatives have a seat at the table to me.
00:53:18Yeah.
00:53:19Well, I hear what you're saying because, I mean, you know, it starts with the artists making things however they
00:53:24make it, wherever they make it.
00:53:25Then it goes to the label or distributor.
00:53:27Then it goes to you guys.
00:53:28So, you know, you're kind of like three steps removed from the creation of the music.
00:53:31So, asking the streaming services to come up with that plan alone would be, I mean, kind of missing a
00:53:37lot of other parties in that conversation.
00:53:41But, yeah, it's going to be interesting to see what happens because I think AI-assisted music will be much
00:53:47bigger than fully AI-generated music.
00:53:50That's right.
00:53:50Correct.
00:53:51By the way, people have used technology for decades.
00:53:56GarageBand.
00:53:56And GarageBand.
00:53:58William is a great friend.
00:54:00He's very technology forward.
00:54:02And there's nothing wrong with that.
00:54:05But who am I to say, oh, this is right, this is wrong.
00:54:08That's not how it works.
00:54:10And maybe, by the way, maybe everything is okay.
00:54:12I don't really know.
00:54:13We'll need to see.
00:54:13For us, as I said, the number of songs delivered in AI is growing.
00:54:18And it's already a third of what's delivered.
00:54:23For us, the usage is very small.
00:54:26It's really important that it doesn't correlate with fraud.
00:54:29And I think we got that covered on our end thanks to the great work that our engineers and our
00:54:33business teams are doing.
00:54:35And then, yeah, on AI, we start with the flags.
00:54:38We have a bunch of other things that we're going to do over the course of the near future.
00:54:44But I really need the content providers and the labels to take responsibility here.
00:54:48Well, thank you so much for letting me ask you a million questions.
00:54:51Oh, my.
00:54:51Okay.
00:54:52To end things off here, I always play a game with our guests.
00:54:57I heard on the podcast.
00:54:58Yes.
00:54:58Yes.
00:54:59Thank you for listening, by the way.
00:55:00That's very nice.
00:55:02I'm glad you checked out the Super Bowl episode, the Michael Nash episode.
00:55:05Okay.
00:55:05So it's called What Would You Cue?
00:55:06Yeah.
00:55:06You know the drill, but so you need to pick one song per prompt.
00:55:11Okay.
00:55:11So the first prompt is, what would you cue to take you back to your childhood?
00:55:16I tell you a story that's actually very recent.
00:55:18Okay.
00:55:19I grew up in Munich, wonderful city.
00:55:22I'm very proud.
00:55:23I go back a number of times.
00:55:25And, you know, in Germany, you get to learn English in school relatively early.
00:55:30One of the, and everyone's really small and young and has no sense of learning a language.
00:55:35One of the early things I remember, like literally in the first month or so, what teachers do is they
00:55:41teach you a song, an English song, and they want to teach you a little culture.
00:55:46So the song that my teacher taught us as a class to actually to write, then learn by heart, and
00:55:51then sing, was helped by the Beatles.
00:55:53Oh, wow.
00:55:55And I actually totally forgot about that.
00:55:57We did, as part of Apple's 50th anniversary, we had Apple turn 50 April 1, just a couple of weeks
00:56:03ago.
00:56:03We did, I don't know, events all around the world.
00:56:06Many of them were music events because we love music.
00:56:09The final one we did was a show with Paul McCartney at Apple Park.
00:56:13And it was 15,000 people.
00:56:14It was beautiful, great weather, great lights, amazing stage.
00:56:17He played for two and a half hours.
00:56:18And the first song he played was Help.
00:56:20And for whatever reason, I remembered it at the time that I was sitting there, like writing down Help, the
00:56:26lyrics, and didn't understand a word.
00:56:28I mean, we didn't, this was like literally in the first month of me learning English.
00:56:32So most of the words, like obviously Help was easy to translate.
00:56:35But it was fun.
00:56:36And that brought back some good childhood memories.
00:56:38I love that.
00:56:39Oh, man, to actually see Paul McCartney himself perform it.
00:56:42That's a fun thing.
00:56:43Yeah, it was a huge honor.
00:56:44We had done things with Paul before.
00:56:46And you remember, Steve was a huge fan of the Beatles.
00:56:49And in 2010, I worked on, because it was run out of London mostly, I worked on the campaign when
00:56:54the Beatles did an exclusive release on iTunes.
00:56:57I don't know whether you remember that.
00:56:58Wait, what was the exclusive release?
00:56:59Well, the Beatles were a holdout in digital for the longest time.
00:57:04They were, with the very few exceptions, that still exist today.
00:57:07They were sort of the last to come to iTunes.
00:57:10And we did a huge campaign all around the world with a beautiful ad campaign.
00:57:14You should look it up.
00:57:15I was really proud of the work.
00:57:17And we launched the entire catalog on iTunes.
00:57:20And we've been working with them ever since.
00:57:22And to have Paul McCartney celebrate with Tim Cook and our executives team and 15,000 people at Apple Park,
00:57:29what was Apple's 50th birthday, was amazing.
00:57:31And, you know, he kept on playing and playing, playing.
00:57:33But he did open with help.
00:57:34I love it.
00:57:35Which is amazing.
00:57:36I love it.
00:57:36Okay.
00:57:37What would you cue to remember your favorite era of music?
00:57:40I don't really have a favorite era.
00:57:42Let me tell you why.
00:57:43Okay.
00:57:44I lived in Germany for about 20-plus years of my life.
00:57:48I was in England for 15, in the U.S. for, I don't know, 10, 12 or so.
00:57:52And it's interesting.
00:57:54When I look at someone's 80s and 90s playlist here, I was like, that's not my 80s and 90s.
00:58:04My music was way more, like, European and different.
00:58:08So, I actually, it's sort of all a bit of a blend.
00:58:12I would probably say the 80s and the 90s if I had to sort of say.
00:58:17And probably it's late 80s, early 90s, probably 85 to 95.
00:58:21So, is there like a German 80s or 90s song that you're...
00:58:24Well, not really, but I'm a huge dance and EDM fan.
00:58:28So, I go to, like, Ibiza and Tomorrowland and places like that.
00:58:32So, and that's probably my European sort of DNA and roots.
00:58:36I love it.
00:58:37I love it.
00:58:38Okay.
00:58:38So, what would you cue to remember the best concert you've ever been to?
00:58:42That would be Michael Jackson.
00:58:43Oh, wow.
00:58:44Yes.
00:58:44And I'll tell you why.
00:58:45I saw two big Michael Jackson shows in the 90s, 92 and 97.
00:58:50He was close friends.
00:58:51His tour promoter was a guy called Marcel Avram, I think.
00:58:55That was his name.
00:58:56And he was a German guy.
00:58:57It was sort of mostly based in Munich.
00:58:59And so, he used to open his tours in Munich.
00:59:03And he spent a lot of time in Munich.
00:59:04There's actually a statue and a shrine for Michael Jackson in the center of Munich, which makes no sense because...
00:59:10But he did, I went to the Dangerous tour and the History tour.
00:59:14And it was something I'd never, actually, I was really young.
00:59:18It was something I'd never experienced a scene before.
00:59:20It was the most incredible thing.
00:59:22You probably didn't even know what you were exactly seeing.
00:59:24No.
00:59:24It's only in hindsight.
00:59:25It's like, one of them, the History tour from the show from Munich is actually on the internet.
00:59:31I've seen, I've been lucky.
00:59:33I mean, I went to, Zane Lowe and I went to see Bruce Springsteen last night.
00:59:37Oh, wow.
00:59:37It was one of the five, ten, pick any number, best music moments we've ever had.
00:59:43I mean, there's 18 people on stage and everyone's a wizard and a magician.
00:59:47It's incredible.
00:59:48Yeah.
00:59:48So, I've been lucky.
00:59:49I go to a ton of shows.
00:59:51We see a lot of great live music.
00:59:52But I, there was, I think the world hadn't seen anything like Michael Jackson in the 90s.
00:59:57True.
00:59:58And there's been so many.
00:59:59I've seen Prince.
01:00:00I've seen so many other great shows.
01:00:01I typically hate to call something out, but I would say those were my two biggest, best concert moments in
01:00:06my life.
01:00:06I think that's fair.
01:00:07It's kind of hard to be Michael Jackson.
01:00:09That's right.
01:00:10Okay.
01:00:10Final one.
01:00:11What would you cue to recall a core memory at Apple Music?
01:00:15So, maybe a big campaign you did around a certain song.
01:00:18Anything that kind of stands out to you?
01:00:20There's so many.
01:00:22I'm sort of flip-flopping between two.
01:00:24Okay.
01:00:24I think the work we've done with Coldplay on Viva La Vida for the silhouette campaign, as we call it.
01:00:32You remember sort of dancing.
01:00:33That was fun.
01:00:33But, no, I would say, going back to what it means to me personally, and also my path here, is
01:00:41the first ever show I did in my life, and we did actually worldwide for iTunes, was a show with
01:00:48the stereophonics at the Apple store on Regent Street in London.
01:00:53And it was a toll experiment.
01:00:55We were like, well, what if when the store closes in the evening, what if we did a show afterwards
01:00:59for a couple of hundred people in between, like, all the – there was no iPhone at the time.
01:01:04It was like 2005, literally.
01:01:06And it was such an incredible moment that we actually decided to immediately do this monthly.
01:01:12So, we created a series called iTunes Live from London.
01:01:14It was every month.
01:01:16And then we liked it so much that within a year, we had iTunes Live from New York and from
01:01:21Paris and wherever we had Apple stores.
01:01:23And it led us to do the festival and let us do all the live events.
01:01:25I actually think it's sort of the origin of the DNA that led us to do the Super Bowl as
01:01:29well.
01:01:30It's sort of us being in the business of, like, producing events and working with artists directly.
01:01:34And, you know, I love the stereophonics.
01:01:36It was a – that was a fun band.
01:01:38So, I would say it was that.
01:01:39That's a good shout.
01:01:40Okay.
01:01:40Well, Oliver, thank you so much for coming to On The Record.
01:01:43Thank you very much.
01:01:44All right.
01:01:44Thank you so much to Oliver for joining me to talk about all things Apple Music.
01:01:48And thank you for listening to this week's episode of On The Record.
01:01:51If you liked today's show, give us a follow on Instagram and on our brand-new TikTok page, at BillboardOnTheRecord,
01:01:56where you can see new clips of this show every single week.
01:01:59We'd also appreciate it if you rated us on your favorite podcast platform,
01:02:02because all of these things help On The Record grow bigger and better than ever.
01:02:06Again, I'm your host, Kristen Robinson, and tune in next week for another peek behind the curtain of the music
01:02:11business.
01:02:12I'll see you then.
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