Jimmy Iovine vs streaming services: "They are not making any money”

Jimmy Iovine (head of Apple Music), according to a report published by "Billboard", talking at a dinner in LA outlined in tough terms the reality of working in a thin-margin business for some of his rivals.

He explained:

The streaming services have a bad situation, there's no margins, they're not making any money.

He then pointed out that Apple has hardware and Amazon has Prime to help them along. But talking about Spotify he commented:

They're going to have to figure out a way to get that audience to buy something else [...] 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.

Then he talked about Netflix as a sign of what could be achieved in the subscription stream space, investing heavily in original content in a way that music services cannot or will not:

So Netflix has all that original stuff and it's $11.99. Music, everybody has everything, plus the free tiers, every song is on YouTube, so how can they charge $11.99 to a consumer? I'm like, no. I'm gonna buy this and get the music for free.... It's a massive problem.

And added:

Put yourself in Kansas without a job and YouTube is free, Pandora is free, Spotify is free. If there's a restaurant down the street with the exact same food as this restaurant that's on a mountain with a view, only this one's for free, a lot of people are gonna eat there. They'll use paper towels, they don't give a shit about napkins.