Music: The "Twin Towers" of the Record Biz

- from Quartz

Lyor Cohen and Jimmy Iovine.

Cohen, who’s about to take over a crucial part of YouTube’s business, and Iovine, now Apple’s music guru, by all accounts should have crashed to the ground alongside the music industry’s antiquated business model—the way the executives who ran Nokia and Blackberry have been tossed aside by the smartphone revolution. But they did the opposite. So who are these two men, and how’d they pull off the near-impossible?

Apple’s true music genius

“Pharrell even told me go with the safest bet, Jimmy Iovine offered a safety net.” (Reuters/Lucy Nicholson)

Jimmy Iovine’s name is instantly recognizable to most hardcore music fans—and not just for its oddly off-beat catchiness.

The record-producer-turned-executive began his career as a recording engineer back in the 1970s, occasionally getting to work with acts like Bruce Springsteen, Patti Smith, and John Lennon. He collected enough cred to eventually found the label Interscope Records in 1990, which was about to go under until it decided to release an album by a small-time producer named Dr. Dre. Soon, Interscope would have acts like Snoop Doggy Dogg and Tupac Shakur on its books.

Along the way, the words “Jimmy Iovine” became somewhat synonymous with the music industry itself. (In 2012, Macklemore and Ryan Lewis recorded a song about record labels and artist exploitation that was literally titled “Jimmy Iovine.”)

But Iovine didn’t sit contently as the head of Interscope, watching the traditional industry’s profits crumble. In 2008, Iovine made his next big move—forming the designer headphones brand Beats with Dr. Dre, selling oversized headphones when minimal earphones were the trend.

Beats, by selling its products as trendy fashion statements, promptly took over nearly half of the entire headphone industry’s market share, and it also pushed into the online music space in 2013. Then, the company—headphones and nascent streaming service and all—was swallowed up by Apple in 2014 in its biggest-ever acquisition.

And that’s when Iovine took his most significant career leap.

Apple didn’t just snag a headphones business; the tech giant scored Iovine’s special knack for making smart bets in the business as a whole. For it was years prior—way before Beats was even put together—that Iovine had already started trying to convince Apple founder Steve Jobs to move into the relatively new field of all-you-can-eat music streaming, where players like Swedish service Spotify (but not many others) had nestled in. Said Iovine in a 2013 interview:

I was always trying to push Steve into subscription. And he wasn’t keen on it right away. [Beats co-founder] Luke Wood and I spent about three years trying to talk him into it.

Iovine’s hunch proved solid. Streaming is now the biggest revenue-driver in the US music industry, and globally, profits from digital platforms have officially overtaken physical ones for the first time. It was last summer that Apple finally took Iovine’s long-nagging advice, unveiling its own subscription streaming service Apple Music–headed, of course, by Iovine, who is now one of the company’s top executives.