Jimmy Iovine and Trent Reznor make the case for Beats Music

By Kyle Anderson
Updated January 17, 2014 at 05:00 AM EST

He already helped turn headphones into a $450 fashion statement — and a reported $1 billion-per-year business. Now Interscope chairman Jimmy Iovine, who famously partnered with Dr. Dre to create Beats by Dre in 2008, is looking to reinvent the streaming-music market. “We don’t need another utility,” Iovine — who in four decades has gone from engineering Bruce Springsteen albums to moving the music business’ biggest chess pieces as the mastermind of a market-dominating record label — says of joining the crowded streaming scene. “People aren’t gonna pay just for access [to music]. Access is not the problem. The service has to be of service.” So on Jan. 21 he’s launching Beats Music (available on iOS, Android, and Windows Phone), which he promises will combine the music-suggesting algorithm of a service like iTunes Radio, the catalog breadth and depth of Spotify, the potential for discovering new artists offered by Pandora, and the editorial voice of your favorite music blog.

To help carry out his vision, Iovine brought in Nine Inch Nails frontman Trent Reznor to serve as Beats Music’s chief creative officer. (Ian Rogers, who spent five years running Yahoo’s music service, will serve as CEO; Dre remains a financial backer.) For the industry-standard $10 a month, Beats Music’s mobile app will provide an exhaustive supply of complete albums. Want to listen to every Aretha Franklin track? Go nuts. But Reznor is most excited about the way the service will introduce you to other music, which he hopes will re-create the kind of thrill that used to be found in brick-and-mortar record stores. “When I heard about Pandora, I thought it was the greatest thing that mankind has ever created,” he says. “For the first hour, it was. Hour two, something doesn’t feel quite as magic. Week two, it was ‘Oh, I see, there’s a handful of songs that gets shuffled around.’ You start to hear a machine in there somewhere. Our goal was everything you see in the app, a human being said, ‘That’s a f—ing good song.'”

Beats Music’s secret weapon is its editorial squad, led by former iHeartRadio programmer Julie Pilat. A computer program will still do some of the heavy lifting, but users will also be reaping the benefits of human endorsement, especially when they indulge in the app’s “Right Now” option, which asks for a place (In the Car, for example), an activity (Chilling Out), a person (With My Girls), and a genre (Hardcore Hip-Hop) in order to construct a context-specific playlist. (In this case, it offered in-the-cut bangers from Ice Cube, Jay Z, and E-40.) “The most important thing, outside of the song that you’re listening to, is what song comes next,” says Iovine. “An algorithm is a piece of the puzzle, but it doesn’t solve it. It’s a mathematical solution to an emotional problem. [We think] you need the interaction of technology and humanity to really get off, because an algorithm doesn’t know that Aretha’s ‘Rock Steady’ can follow ‘Start Me Up’ by The Rolling Stones.”

Melding tech and heart has been the result of a long quest for both Iovine and Reznor, who have spent the better part of the 21st century trying to solve the digital-distribution riddle. “I saw Napster in 2000 and said, ‘The music industry is in trouble,'” explains Iovine, who by then was installed as the chairman of Interscope Geffen A&M. “Even then, subscription was the only thing that made sense to me.” Meanwhile, Reznor used Nine Inch Nails’ mid-aughts independence to toy with distribution options, from giving away music for nothing to crafting tiered-pricing models for limited-edition books and special-edition vinyl. “It was good research, but after a few years those started to feel like stunts,” he admits.

Even though he’s in the streaming game, Reznor insists he’s still sensitive to the financial needs of artists, some of whom — including Radiohead frontman Thom Yorke and David Byrne — have railed against the paltry royalties paid out by services like Spotify and Pandora. “I don’t think music should be free,” says Reznor. “In a perfect world, the royalties would be [higher], but they’re not. And when you make the comparison ‘I would make this much selling a CD, compared to this much when you listen to it over a streaming system,’ that isn’t a fair comparison of things.” (It would be more akin to terrestrial radio airplay, because there’s no physical product.) In addition to pledging royalties transparency — musicians will be able to know how much they’re being paid for how many streams, and no special deals will be made with individual artists — Reznor says future updates to Beats Music will include a series of tools allowing performers to interact more directly with the subscribers who are spinning their tunes. “The ability to communicate and have tools that you need to reach your audience has real value,” he says. “I’ve spent a lot of sleepless nights thinking, ‘Am I throwing a log on the fire that burns down the music business?’ But being able to turn all kinds of people on to the power of music and get them as excited as I am about hearing a ton of great stuff — and I can’t find a great way to do that in today’s climate — that, to me, is worth it.”