Streaming companies, even Spotify, don't seem to be great at generating revenue. How does Apple change that equation? Or does it absorb the business as loss leader?
Iovine: Well, first you have to scale it. And if 80 percent of it is free, it's hard to have a business model like that.
A lot of artists complain about their compensation from streaming services.
Iovine: A lot of artists are confused. If you get 100 million streams on a song and you're only being paid on 20 percent, the check's not going to look good. The money's not going to look fair.
So how does Apple Music improve that?
Cue: We've always thought about that...People will pay for great services. They said they wouldn't pay 99 cents for a song but they did. We've always believed that. When you go to work, you don't work for free; nobody works for free. Nobody can say, "I want to work for free." Nobody says that.
Can you be more specific about the economics? Other services spell out how much they pay to rightsholders in detail.
Cue: We won't. We've always been very clear — the vast majority of the revenue we collect goes to the labels. The economics have always been the same. We have paid out many, many millions of dollars. What we've done and continued to do is hopefully get people to pay for these services that we think are great and we'll collect that money and pay the labels.
