 Hey, this is Ben Popper from The Verge. Today Beats is launching a streaming music service making it the newest competitor in an increasingly competitive market. I'm talking today with Ian Rogers, CEO of Beats Music. We chat about how they plan to stand apart from the pack and why finding new songs to love is actually harder than ever. What is Beats Music? Beats Music is the first music service that's actually a service and not a server in the sense that it's of service to the listener. You open it up and you're five seconds and one hand from hearing something that makes you want to roll down the window and crank the volume to the right. So there is a lot of competition in this space. Obviously, there's established players like Spotify. There's big tech giants like Google and Apple jumping in. What do you think it is that's going to differentiate Beats? I think you were talking about it just a little bit now, but is it mostly going to be that angle of discovery and curation that's going to set it apart from the competition? Yeah. Well, I got to be honest, I don't really think there's a lot of competition for what we're doing. I mean, there are other streaming services out there, and I think the services that are out there have answered the question of what is the next format? So not to take anything away from them, I think establishing a big catalog and giving access to a big catalog of music is a great first step. The subscription services that are out there today are great if I have a copy of my favorite music magazine in my hand or if I'm also looking at pitchfork.com. The vision is really putting those two together, and you open up an app on your phone and you hit play, and you're like, oh man, that is incredible. So I'll push back on that a little bit. I mean, when I'm playing around on Spotify, a lot of times I check the Pitchfork app on there and they upload their favorite new music, so I discover new stuff through Spotify via Pitchfork. You guys will have the same kind of taste makers on there, Rolling Stone and Pitchfork and XXL. I guess one of the things that Beats was talking about with Seem Unique was having this group of 30 or 40 human curators who are going to be pushing out new playlists all the time. You know, that I might discover somebody who's really tuned into my taste or showing me new things. Who are these humans that you guys are getting in there and why do you think they work better than stuff that's algorithmically generated? Yeah, so we have a great editorial staff. There's a woman named Julie Pilot who leads our curation and music and relations staff, and then we have Scott Plagenhoff who was formerly the editor of Pitchfork who leads our editorial staff. And then to go through that whole staff, I mean, they're incredible. We have Carl Cherry, he used to be at XXL, Suzy Cole who was a program director at the last rock and roll station on the planet, the Riff in Detroit. We have Ariane Timmermans who's a pop music correspondent for CNN, Ken Tucker in Nashville, Fuzzy Fantabulous who was 17 years on Power 106 in LA. God, who am I forgetting? Mason Williams from Rhino. I mean, and I'm forgetting people, but there's more. So they lead each of their respective areas, but they have then, they reach out to the community and bring more people in. What do you think about how Beats will work in terms of the value for the label or the artist? You know, a lot of people have criticized the streaming services, Spotify in particular, but all of them, for not giving enough back to the artists who are being streamed. Are you going to have the same approach as everybody else or are you going to try something different? Well, it's different on a couple levels. First of all, because we don't have free, it's actually fundamentally different. So if you look at the services that have free streaming, the free streams pay a lot less. So since we don't have a free service, we actually pay more on a per stream basis. A lot of the services that we've been talking about who are competitors here in the States and also in Europe and maybe some of the ones from Europe who are coming here now like Deezer, have struggled to turn a profit. I guess long term, do you think that Beats, the streaming music company and Beats, the headphone are synergistic and you don't expect Beats Music to be a profitable company or do you think long term the streaming service will be able to be self-sustaining and profitable? The streaming service needs to be self-sustaining and profitable. We are a standalone company. We spun a company out of Beats Electronics last year. So we are a sister company of Beats, but it needs to have its own P&L and stand on its own two feet. It's really not a complicated business though. I think that others have made it complicated by spending hundreds of millions of dollars a year with this free feature that's really kind of a marketing feature. But the paid subscription model is pretty straightforward. There's margin in every subscriber and you've just got to scale your number of subscribers larger than your fixed cost base. It's really more about how do you scale it because if you can't scale it to millions of subscribers then the business doesn't work. But I really believe that between the product we have, the brand that we have, the partnerships we have and then what we are capable of internationally that we can invest in this business and grow to tens of millions of subscribers over the coming years. And I think that's all the question I had. One that came back to me, you said that you're planning to pay the indies and the majors the same which isn't like your competitors. Does that mean you're going to have more kind of obscure indie stuff? I find that a lot of times I'm not seeing the artists I like or the labels I like on the streaming services. It's a really great question. I think that I'm so excited about our catalog and our team for a couple of reasons. Come back to the curators that you asked me about earlier. Two things. First of all, we've actually removed millions of tracks from our catalog. I don't know if you've kept up on what's happening with the spammers in the catalog but it's a real problem. We have people that are uploading sound-alikes, cover versions, karaoke versions, trying to insert themselves and get plays and make a couple of pennies here and there. And it's just confusing for the consumer. I was doing this thing on my seven-year-old and wanted to hear Thrift Shop and here I am on Mog, our service, and it was difficult for me to tell which one was the real song. And we actually ended up listening to one that turned out not to be the right, not to actually be Macklemore. So we've gone to pains to get a lot of that bad content out. Truly it's spam. So that's one side of it. We actually care enough. We're not like, who has the most tracks? We want to have a great consumer experience. So we've gotten a lot of that spam out. On the other side of it, because we have these curators, what we're doing is that gives us a lot of direction in terms of what catalog are we missing. So we're not trying to say, oh, let's go get those guys because they've got a million tracks. When you have a curator like Decibel Magazine, which is core metal, what you find out is the metal labels you don't have really quickly. Because those guys come in and they go, these are the 40 metal records in 2013 that matter. And then you're like, okay. And then you find out, oh, we're actually missing that label, that label, that label. And they might be small labels that only have a couple of, that have a relatively small roster, but the roster's good because they're small selective labels that are to a core audience. So I think because of our curators, we actually go after catalog in a different way than our competitors do because we're not on a race to who can do a press release with the most tracks. It's who has the music that people care about. What else have you been listening to over the last year? I'll point you to my best of 2014, number 2013 list. You'll have a mix tape on there that I could probably find. Go to my profile at iancr on Beats Music. And I actually do sort of a weekly or maybe twice a monthly mix tape and you could hear what I'm into from Aretha Franklin and Sly and the Family Stone to Kurt Weill to Mastodon. Well thanks for coming and chatting with us today and I look forward to hearing it. Thanks for having me. Have a good day.
 Hey, this is Ben Popper from The Verge.
 Today Beats is launching a streaming music service making it the newest competitor in
 an increasingly competitive market.
 I'm talking today with Ian Rogers, CEO of Beats Music.
 We chat about how they plan to stand apart from the pack and why finding new songs to
 love is actually harder than ever.
 What is Beats Music?
 Beats Music is the first music service that's actually a service and not a server in the
 sense that it's of service to the listener.
 You open it up and you're five seconds and one hand from hearing something that makes
 you want to roll down the window and crank the volume to the right.
 So there is a lot of competition in this space.
 Obviously, there's established players like Spotify.
 There's big tech giants like Google and Apple jumping in.
 What do you think it is that's going to differentiate Beats?
 I think you were talking about it just a little bit now, but is it mostly going to be that
 angle of discovery and curation that's going to set it apart from the competition?
 Yeah.
 Well, I got to be honest, I don't really think there's a lot of competition for what we're
 doing.
 I mean, there are other streaming services out there, and I think the services that are
 out there have answered the question of what is the next format?
 So not to take anything away from them, I think establishing a big catalog and giving
 access to a big catalog of music is a great first step.
 The subscription services that are out there today are great if I have a copy of my favorite
 music magazine in my hand or if I'm also looking at pitchfork.com.
 The vision is really putting those two together, and you open up an app on your phone and you
 hit play, and you're like, oh man, that is incredible.
 So I'll push back on that a little bit.
 I mean, when I'm playing around on Spotify, a lot of times I check the Pitchfork app on
 there and they upload their favorite new music, so I discover new stuff through Spotify via
 Pitchfork.
 You guys will have the same kind of taste makers on there, Rolling Stone and Pitchfork
 and XXL.
 I guess one of the things that Beats was talking about with Seem Unique was having this group
 of 30 or 40 human curators who are going to be pushing out new playlists all the time.
 You know, that I might discover somebody who's really tuned into my taste or showing me new
 things.
 Who are these humans that you guys are getting in there and why do you think they work better
 than stuff that's algorithmically generated?
 Yeah, so we have a great editorial staff.
 There's a woman named Julie Pilot who leads our curation and music and relations staff,
 and then we have Scott Plagenhoff who was formerly the editor of Pitchfork who leads
 our editorial staff.
 And then to go through that whole staff, I mean, they're incredible.
 We have Carl Cherry, he used to be at XXL, Suzy Cole who was a program director at the
 last rock and roll station on the planet, the Riff in Detroit.
 We have Ariane Timmermans who's a pop music correspondent for CNN, Ken Tucker in Nashville,
 Fuzzy Fantabulous who was 17 years on Power 106 in LA.
 God, who am I forgetting?
 Mason Williams from Rhino.
 I mean, and I'm forgetting people, but there's more.
 So they lead each of their respective areas, but they have then, they reach out to the
 community and bring more people in.
 What do you think about how Beats will work in terms of the value for the label or the
 artist?
 You know, a lot of people have criticized the streaming services, Spotify in particular,
 but all of them, for not giving enough back to the artists who are being streamed.
 Are you going to have the same approach as everybody else or are you going to try something
 different?
 Well, it's different on a couple levels.
 First of all, because we don't have free, it's actually fundamentally different.
 So if you look at the services that have free streaming, the free streams pay a lot less.
 So since we don't have a free service, we actually pay more on a per stream basis.
 A lot of the services that we've been talking about who are competitors here in the States
 and also in Europe and maybe some of the ones from Europe who are coming here now like Deezer,
 have struggled to turn a profit.
 I guess long term, do you think that Beats, the streaming music company and Beats, the
 headphone are synergistic and you don't expect Beats Music to be a profitable company or
 do you think long term the streaming service will be able to be self-sustaining and profitable?
 The streaming service needs to be self-sustaining and profitable.
 We are a standalone company.
 We spun a company out of Beats Electronics last year.
 So we are a sister company of Beats, but it needs to have its own P&L and stand on its
 own two feet.
 It's really not a complicated business though.
 I think that others have made it complicated by spending hundreds of millions of dollars
 a year with this free feature that's really kind of a marketing feature.
 But the paid subscription model is pretty straightforward.
 There's margin in every subscriber and you've just got to scale your number of subscribers
 larger than your fixed cost base.
 It's really more about how do you scale it because if you can't scale it to millions
 of subscribers then the business doesn't work.
 But I really believe that between the product we have, the brand that we have, the partnerships
 we have and then what we are capable of internationally that we can invest in this business and grow
 to tens of millions of subscribers over the coming years.
 And I think that's all the question I had.
 One that came back to me, you said that you're planning to pay the indies and the majors
 the same which isn't like your competitors.
 Does that mean you're going to have more kind of obscure indie stuff?
 I find that a lot of times I'm not seeing the artists I like or the labels I like on
 the streaming services.
 It's a really great question.
 I think that I'm so excited about our catalog and our team for a couple of reasons.
 Come back to the curators that you asked me about earlier.
 Two things.
 First of all, we've actually removed millions of tracks from our catalog.
 I don't know if you've kept up on what's happening with the spammers in the catalog
 but it's a real problem.
 We have people that are uploading sound-alikes, cover versions, karaoke versions, trying to
 insert themselves and get plays and make a couple of pennies here and there.
 And it's just confusing for the consumer.
 I was doing this thing on my seven-year-old and wanted to hear Thrift Shop and here I
 am on Mog, our service, and it was difficult for me to tell which one was the real song.
 And we actually ended up listening to one that turned out not to be the right, not to
 actually be Macklemore.
 So we've gone to pains to get a lot of that bad content out.
 Truly it's spam.
 So that's one side of it.
 We actually care enough.
 We're not like, who has the most tracks?
 We want to have a great consumer experience.
 So we've gotten a lot of that spam out.
 On the other side of it, because we have these curators, what we're doing is that gives us
 a lot of direction in terms of what catalog are we missing.
 So we're not trying to say, oh, let's go get those guys because they've got a million tracks.
 When you have a curator like Decibel Magazine, which is core metal, what you find out is
 the metal labels you don't have really quickly.
 Because those guys come in and they go, these are the 40 metal records in 2013 that matter.
 And then you're like, okay.
 And then you find out, oh, we're actually missing that label, that label, that label.
 And they might be small labels that only have a couple of, that have a relatively small
 roster, but the roster's good because they're small selective labels that are to a core
 audience.
 So I think because of our curators, we actually go after catalog in a different way than our
 competitors do because we're not on a race to who can do a press release with the most
 tracks.
 It's who has the music that people care about.
 What else have you been listening to over the last year?
 I'll point you to my best of 2014, number 2013 list.
 You'll have a mix tape on there that I could probably find.
 Go to my profile at iancr on Beats Music.
 And I actually do sort of a weekly or maybe twice a monthly mix tape and you could hear
 what I'm into from Aretha Franklin and Sly and the Family Stone to Kurt Weill to Mastodon.
 Well thanks for coming and chatting with us today and I look forward to hearing it.
 Thanks for having me.
 Have a good day.