Jimmy Iovine on AI: “The Great Artists Will Show the World How to Use It”

Up next, we have Jimmy Iovine in person.

Nice to see you.

He is the co-founder of Interscope Records.

How you doing, man?

We're doing fantastically.

How are you?

Good, good.

Yeah, thank you so much for coming on down.

Hey, it wasn't easy. You're far from my house, but it's cool.

Coming in from, uh, uh, Malibu. There we go. Oh, I do that drive. I do that drive every day too.

Are you in Malibu?

Yeah, yeah, yeah, yeah.

Wow.

Senra, me, Huberman. You know, we got a little podcast dynasty out there.

Oh, great, great. I'll give you my number. We're out there, me and my family.

Yeah, yeah, yeah. And Ben too. Ben Taft.

Really?

Yeah, yeah.

Fantastic. That's great.

We're all out there.

That's great.

How are things going at USC?

Well, you know, we started this— we started the school, you know, it's called IYA, and it's really a school of innovation. What happened was In 2014, we sold Beats headphones to— and Beats Music to Apple.

Yeah.

And at Beats, we had a similar experience where we couldn't find people that could collaborate the way Dre and I wanted them to collaborate. Collaborate the way Dre and I wanted them to collaborate. You know, so We kind of got into that and just, we would, it was very, very difficult. Either you were an engineer, design, business, it just—

Yeah.

They couldn't speak the same language. They didn't understand the why of the other person. So, when we went to Apple, it was that on steroids for us. They're a great company, the best company, but we found that at every company we went to, that everything was very siloed and communication Understanding was siloed. Not just people, but understanding. And so one day I woke up and I just called Dre. I said, Dre, you know, the problems that we're having— Dre and I really didn't go to school much. And I said, but I got a feeling that this is a problem in education. People are learning in a siloed way. You see, 19 to 25 and 26, I don't know about you guys, Yeah. But that puts a big imprint on your life. You know, it's like you learn a lot in the formative years. Those are really important. They were very important for me. And I guess that's kind of why the age of college.

And getting like varied experiences, I feel, is so important. When I think about my era from 19 to 26, I studied economics, I learned to program, I started a business, I filmed videos, did marketing. It helps to blend all these things together.

How old are you?

I'm 37.

Yeah. So, you're young enough to grow up in a really multidisciplinary environment.

But importantly, a lot of that was on my own. I just had to go learn.

That's my point. Yeah.

I had to do it myself.

That's my point. So, now, when you come out of high school, they silo you.

Yeah, totally.

Okay. You're going to go work with 60 engineers every day. You're going to go to Wharton, but you're going to be with 45 accountants every day. And there's something wrong with that. So, we stepped in, went to USC and—

How do you map that to or match that with this idea of putting on the blinders? Why does a racehorse wear blinders?

Well, because every— we live in a world now, it's worse than ever with social media. Everyone cares so much about what somebody else thinks.

Oh, that's interesting.

I mean, we have people just all day, what do they think of my post? What do they think of my orange juice? Who cares? Do you know what I mean? Would you go to a grocery store and ask everybody what they think? So anyway, I'm an older guy, so it doesn't make any sense to me. But that's the blinders. The blinders are very simple. Run your own race. But enter that race with the understanding and the empathy of other disciplines.

Yes.

We all have that problem in any company you have. The extreme tech side and the extreme design side have trouble communicating. Maybe not everyone at every company, but most people at most companies. And then when you Remember, we brought 300 people from the creative business into Apple, basically. And Apple's an incredible company, but it's— and it's the best of them, by the way. But it's all somewhat siloed. Of course.

Do you think entrepreneurial people know that they're entrepreneurial for the most part? And I ask that because do you find with the school There's people that maybe that aren't applying to be a part of the program, but you actually want to go and find those people? Or generally, are these people self-selecting and they just know they want to be a part of it?

They know that there aren't many schools that fit who they are.

Sure.

Right? And we get a lot of applicants, and that's because we fit, we're speaking their language. And think about this, we started this in 2012. Now, a lot of schools are saying, okay, we offer multidisciplinary. They say, okay, you're in an engineering school, but you could go take one course across the hall and sit. That's not the joke.

Yeah.

What it is, is what companies want. Actually, we did research at USC to find what what type of students they want. Number one came back, collaborative innovation.

Yep.

And that's the foundation. Our school is really Ivan Young Academy for Innovation. We put in the beginning tech, design, and entrepreneurship because we wanted to explain it.

Yeah.

We wanted to make it literal, like rock to the forehead kind of messaging. But now, it's fundamentally the Ivy Young Academy of Innovation. And because people can't— you need to collaborate to innovate. And look, I'll give you an example. People say, how do you know there were problems at these companies like this? Well, I've been to a lot of them, but I have proof. Here's my proof. Why is it that so few— I'm going to be generous— so few software companies have built successful commercial hardware, consumer electronics. Why is that?

No founders in the seats? They run by committee?

Because, no, they can't collaborate.

They collaborate.

They can't collaborate.

Yeah.

You know, now, you know, I mean, Meta's gotten this piece of hardware out there right now, but they went to— I mean, it looks like they went to Ray-Ban, you know? I mean, And it's cool. It'll do okay. It'll do fine, whatever. They're a great company. But none of these companies can make hardware and they all have hardware envy.

Yeah.

All of them.

Yeah.

And so, there's a reason for that. And my thesis, and mine and Dre's thesis is that this is why.

Yeah.

Because what was so great about— what is so great about Apple, because it's still in their DNA, is is they had Steve Jobs. He was the ultimate cross-disciplinary human being. That was in his DNA, where tech meets liberal arts. And when I went, the first time I went up there in 2003, I got it in 30 seconds because I had gone to 5 other companies before that and talked to them about piracy and all that stuff. I was on a kick about that. And I was— the minute at Hello, I met him and ADQ, I said, okay, this is where the party is. And I just went back. I told the people at— Doug Morris at Universal, who was in charge of the place, I said, license this guy.

Yeah.

Because they know a lot more about this than anybody in our business and they have feel. Okay? So, this school is truly designed Behind that meeting. I know it sounds simple, but look, we had an idea. I woke up one day and I called Dre. I said, Dre, what about starting a school like this? Hell yeah. By the way, he really talks like that. So, we wrote a check for $70 million in a month.

That's crazy.

Just on one line, knowing nothing about education. And we built what I consider a fabulous school.

Do you think that there is a trap to be avoided with the school around students becoming tracked? Like they've done the interdisciplinary work and they see this as the best way to get a job at Apple or the best way to get a job at a startup. And in fact, they should be sort of laying back and watching opportunity come to them during this period.

Well, first of all, they're 22 years old. They can go get a job at Apple and still go change the world.

That's true.

Steve Jobs had a job for Apple, right? So, nothing wrong with getting experience. I think it's actually good.

Yeah.

But it's more important. I mean, look, even the engineering degree, you could see is trying to expand. They get it. You know what I mean?

Yeah.

You can't just— it's really not a good environment to work where people just don't understand each other fundamentally. It's empathy.

Do you think that as technology grows and technology progresses, that is creating like a natural widening force? Because it used to be that the instrument was technology, but it was understandable by an artist. And now the technology might be 7 layers deep in some AI thing that's so abstract and so obscure that that creates—

Look, in 2012, I couldn't spell AI.

Yeah.

You know, So, I had no idea, but we built a school that's perfect for it.

Sure.

Because it makes so much common sense inside these companies if you understand the why of the other discipline. Otherwise, you're walking— it's a crash. And that's why Apple can still make great software and great hardware. That DNA is in those people. It's in Tim Cook. It's in Eddy Cue. And now, I don't know this fellow, John, but I'm sure he was brought up in the same school.

Yeah. He's been there a long time.

But that's a question that should be asked and will probably never be answered. But why do software companies fail when they go to make hardware?

Yeah, it's tricky. A lot of them have tried. A lot of them are attractive.

Are you kidding?

Yeah. Yes. Basically all of them.

But there has to be a reason, right?

Yeah.

So my reason's better than anybody else's. Maybe somebody else came up with a better idea. But my reason is very convenient for my school.

Yeah.

That's good.

Do you think more entrepreneurs should go back to the university that they graduated from and teach a course? Like something that's— there's so many lessons that I didn't learn in school, and I won't claim to be an expert on On many things, but if I even had to put together like 90 minutes, I feel like I could save my younger self a lot of time. And it's maybe not—

Of course they should. Everyone should give back. I mean, I think a lot of people do. I see it at UC all the time. I mean, they have alumni giving hundreds of millions of dollars to these schools, you know, and I'm sure they go back and talk with them and everything. I spend a lot of time at the school. I try to Be very involved. I do.

Do you think you would've dropped out of your own school? Like the younger version of yourself?

Here's the thing. If there was— I'd have to go for a lot of therapy on dealing with dyslexia first.

Sure.

I had a lot of trouble reading and paying attention. So, I don't know what they call that. There's names for them. But I don't know, maybe if there was a lot of Prozac back then, maybe I could have focused. But no, I got into— I, I, I just— what I got into is I got into— I loved music, right? So I got into music and engineering, which is sort of technology side, right? So I started as a recording engineer.

Yeah.

So you have to understand the basic principles of technology in order to run a console and—

Yeah.

fix microphones and do whatever you have to do. So, I got lucky. I didn't know I was doing that then, but I don't know that not everybody can do that. So, school is a great thing, but only if you're in an environment that's going to enhance your creativity and who you are, not take one part of it and put it in a box. Yeah.

The funny thing for me is I It took me until I was an adult to realize that I was creative because I remember my pretty formative experience was in early, early school when I'd be in an art class and I'd be told, draw this or do that or whatever. I just was not good at drawing. I never was good at drawing. And in my head, creativity and art was all about drawing.

Sure.

Right? Because that was my first time doing anything creative in a school setting. So, then I went like, almost probably 15 years thinking I'm not creative, right? And so it took me to being an adult to realize that creativity can have all these other forms, right? It's not just like, can you draw a pretty picture, right?

Well, you could also— you could learn. You could learn creativity. You could learn taste. You could learn all those things. It's somewhere in you where you could learn it.

That's cool.

Absolutely. I had no taste when I walked into the record plant in John Lennon's studio in 1973. I had zero taste. I went from 3 albums with him, 2 albums with Springsteen, and 1 album with Patti Smith, and I left with taste.

But I often find that a lot of people have great taste, but they don't have the ability to create things that meet their taste level. Like, taste can be inherent in some people.

You know what you do then? is you have an eye for people that do have the gift and you surround yourself with them.

Yeah.

I learned that at 19 years old. I was living in my mother's house in Brooklyn, in Red Hook, Brooklyn. My father was a longshoreman. And I met John Lennon and Bruce Springsteen. I did those records and I got an apartment. I said, okay, I meet people like this, my life is going to be okay. I just got to make sure that I don't get thrown out of the room.

Yeah.

So, when you're running a company, leave your ego out of it and realize somebody does something better than you. And don't defend anything. Don't defend your ignorance. Just go for it and just say, okay, this person's great. I'm going to be of service to this person. Even if they work for you. To get them loyal to your company and loyal to you. And that's what I always do. I got a pretty good eye for seeing who's gifted. And I try to make their life as great as possible.

Yeah, that resonates on a smaller scale where I knew I'm not great at design. I'm not great at drawing out a logo, for example. But I can find people that can make great logos. And I realized I could—

Headphones. Yeah, we come out of music, me and Dre, so people used to go, well, of course you guys are in the recording studio, of course you knew how to make headphones. If you gave Bruce Springsteen 2 pieces of wood, he's not coming out with a guitar.

No way.

Okay, or Keith Richards. So we had to go and learn. What we did was we found people that really were good at this. And bring them in. And we just added the idea of what was wrong. What was wrong is that everyone was listening to music, an entire generation, including yours and yours, on those little free earbuds that Apple would give out.

That's right.

So Dre said to me, man, that's— I spend all day in the studio and my kids are listening on these ridiculous things. So we said, okay. So then we decided we're going to make a headphone. Then everyone tells us you can't— they got a great headphone, they'd be like $300 at retail. They said, well, that's not going to work because Apple gives them away for free and so does Samsung.

Mm-hmm.

We said, okay, our job is to get them on people's head. Once they hear it, they're not going back. And that's what we did. So, we brought culture and we got them on people's head to try them. And then once young people started trying them, they wanted it for Christmas.

Was that expensive? I remember the story of you paying to advertise G-Thing, right?

That was a song.

It was a song. That was a song. But it was a contrarian move because I feel like pulling the trigger on a big ad spend before an artist has really broken through is risky. But how did that change your—

I don't, I don't know how to spell risk either. You know what I mean? I just, I just, I do, I wake up in the morning and I do what I feel. Yeah. And I do what makes sense. I talk to the people that are around me and I don't care about the risk. I really don't. I never did. I just do what's right for the project. And sometimes, you know, you cut a lot of flack because, you know, when you're at a big company or something, they, Budgets and things like that. But I just get myself in situations where I leave them if I can't just do what I want to do.

Sure.

I try to make a life of just doing what I want to do.

Yeah.

Over the years, how did you think about bringing in new business partners? You have some early success working with some set of people. You start meeting other great people. In your mind, how are you deciding Whether to spend time and partner with new people versus sticking with the band?

I'm very, I'm very positive person. So I always give people the benefit of the doubt and try it, you know, and you could tell pretty quick if something's going to work or it's not. And if it's not, say sorry. And if it does, go in further. I try a lot of things, you know, I'm not, it's, I'm not precious about anything. Once I figure out what I'm doing, I'm precious about that.

Yeah.

But as far as the education and learning how to get— look, we would have never done this school. I mean, if we were nervous about things, I mean, we knew nothing about what we were doing. And I think we have one of the best, if not the best school in this area in the country. So that's a good thing.

There's obviously Big technological transition in music with AI. Going back maybe before streaming, what was the first technological shift you remember in the music industry?

I mean, Napster, you mean?

Yeah, yeah. Before Napster even. Was that—

Before Napster? I mean, look, I go back a long time, you know. Stereo.

Okay.

You know, multitrack recording. You know, where do you want to start? It just— Yeah.

But what was that like? Was there a discussion about it, or was it something that just You know, was adopted behind the scenes and the consumer of music—

It's always about— it's always the— because the stuff like that, it was expensive. It was always the professionals, you know. Like, you could hear the first time, um, a phaser— one of the first times a phaser was used on a record on Jimi Hendrix. You know, you could hear when the Beatles got stereo. They walked in the studio one day because I knew those guys, and there was 2 speakers instead of one. Yeah, you And Paul will tell you, he has told people, that, okay, they thought at the beginning, oh, twice as loud.

Yeah. But there's more to it.

There's more to it. So it's gone all the way. There's drum machines. Drum machine was big.

Yeah.

I was fortunate because Roger Linn used to be a guitar player and he was playing on one of my sessions when he was creating this thing. He had the computer in there with him. He was creating a drum machine. So I got to see that really early on, but then Prince exploded it. You know, so AI is, you know, uh, it's a little different.

Do you think people thought it was a risk? I mean, I know risk is not in your vocabulary, but, uh, for Prince to adopt the drum machine?

It was bold.

Bold.

It was very bold because, uh, remember, this guy is a great, great musician. Yeah. That had the greatest musicians playing around him.

Yeah.

So he said, I'm going to simplify, I'm going to go to a drum machine.

Yeah.

That's bold and brilliant. And he, he was one of the guys that exploded it, you know, that really took it, uh, went all the way.

Yeah, the boldness that feels like that's an— they're like, when you're thinking about stereo or the drum machine or synthesizers, there's the— an opportunity for boldness on the side of the musician. Did that same opportunity for boldness exist in the streaming transition, in the social media era, in the AI era?

Okay. Let's go to streaming, right? Streaming, you have to go to iTunes first.

Yeah.

That was very bold because the record industry didn't want to license it. You know, musicians didn't want to sell their songs at a dollar a time. But out the back door, they were being given away on MP3 all day, right? So, what Steve and Eddy had was a really good idea, an elegant way to match their iPod. They had a piece of software that was really elegant. And it worked. And these guys understood the culture. Steve, my first 5 conversations with Steve Jobs was about John Lennon and Bob Dylan. He really cared and understood. Hey, he went out with Joan Baez, right?

Right.

So, he understood the, the culture.

Yeah.

And he understood, he had a feel for it, you know. So that was a big step. And then streaming was another big step. Daniel Ek was a brilliant guy, you know. Uh, we came to the market, we had Beats Music and, uh, Interscope, and we sold to Apple. And that— and then we started, we worked with the guys up there and, and made Apple Music.

How do you think streaming changed music production or the decisions that musicians make? I mean, I've heard at least anecdotal evidence that albums got longer or there's more songs because that gives you more shots to go viral in the algorithm.

I think what caused all that was social media.

Okay.

Social media, unfortunately, like a thing like TikTok, It's, it's in a lot of ways it's great because it gave artists power and a platform to market themselves, which is what artists want and need and should have. But it also made a lot of artists and record company people chase that.

Sure.

Whatever the latest TikTok thing is. And that can be pretty ridiculous at times. Right. So I think that affected music more sonically and creatively than streaming did, personally. Maybe more songs or whatever. Yeah, great. But even that more songs thing came out of SoundCloud.

Yeah.

And TikTok and Instagram, just putting stuff out.

Yeah. Jordi?

I was talking to a buddy of mine in Malibu and he's produced 20, 30 Billboard number ones, like really, really impressive career. And he's, for decades now, received— people will send him demos. And he always says he likes to listen because he wants to be working with up-and-coming talent. And he said, over the last year, it's become harder to judge who's got potential and who doesn't because of AI, because anybody can make a song that sounds At least decent, and maybe there's a thread of a good idea in there. And so, he said it's just become impossible to understand. And to me, that signals that it's gonna become even harder to break into the music business because— and suddenly, anyone can make a song, right? Like, Suno, shockingly quickly, in about— takes, in my experience, about 10 seconds to make something. And there's patterns you can— if you—

Where do you wanna start with this?

Yeah, yeah.

You just covered a lot of ground, okay?

Yeah, yeah. But, I guess, my main My main question is, like, does it become these previous technology trends in music, the professionals, the existing professionals got access to them first, they were expensive to adopt, things like that. Now with AI, anybody in the entire world can get access to it. And I'm wondering, does that mean you're going to have a lot more people breaking into the music industry or less just because competition is like—

Well, do you want to talk about the licensing of AI, the actual use of AI or the production of it? Where do you want to— where do you want to start? Right. You know, where—

Well, specifically, what is it? What do you think it means for emerging talent?

Well, let's use the word talent. If you really have talent, it'll help you. It'll help you create as a tool. You know what I mean? It's like you asked the right question. Stereo.

Yeah.

It made Sgt. Pepper better.

Yeah.

Okay.

Yeah.

Uh, the drum machine made Prince's first album fantastic, you know, or second album, whatever that was, you know. So I think as a tool, it's going to be fabulous, you know. Uh, a lot of these companies that are creating AI music right now are doing so on unlicensed music en masse, like 60 million tracks or something like that. Well, those, in my opinion, those are gonna be like the kaza of this moment. It's gotta get under control to a certain extent that there should be. I mean, in this particular case, there, there's gonna be some kind of government regulations or there should be something, right? Yeah.

For proper licensing. If you use these 3 influences in the creation of this AI song, those 3 artists get compensated.

That's right. The prompts, the prompts should get paid.

Yes.

Right. Yeah. So, but there's a lot of cowboys and they're gonna run around doing this stuff, you know, but that's not, I don't think that's where the, it's gonna shine. You know, like, can people make songs, you know, easier? Can somebody who was Instagram influencer go out and make a song cuz they know how to dance and jump around and get people's attention? Possibly. But there's crap now. There'll be crap then. There'll be crap now. Maybe the crap will get more interesting.

Who knows?

Yeah. But as far as, The great artists, Kendrick Lamar, Alicia, Olivia Dean, some great people that are— C-Math, some of these young artists that are just fantastic, St. Harrison, some of these great, great— that kid St. Harrison, there ain't no way I can sing like that kid.

Yeah.

So something like that is— You know, not, not gonna, they, they're gonna be there. 'Cause see, what AI can't do is grow up in a terrible home.

Mm-hmm.

AI can't have a broken heart.

Yeah.

You know, so, you know, AI's not gonna be Dolly Parton.

Art has always been about stories. You look at a modern art museum and there's the constant refrain, my kid could have drawn that, but you didn't. And there's not provenance and there's not a journey and a story behind it.

Yeah. I don't, I'm not afraid of AI. And I met a lot of the people that are working on it and none of them truly scare me. You know, or should scare anyone for that matter. And, you know, so I think it's a tool. I think Dre said last week on some interview that it's a tool.

Yeah.

And that's what it is. But the licensing, the artist that it's learning off of, the way this product is— look, when the Beatles came out, they were influenced by Little Richard and Buddy Holly, right?

Yeah.

They didn't get paid. But now if you're influenced by the Beatles and, um, and Dr. Dre, they will get paid.

And there's—

if the— and I gotta tell you, I, uh, everyone's always tough on the labels, but I think I'm watching the labels closely and I talk to the guys that are running it quite a bit because I've known them all for years. Yeah, I think they're handling this problem right in the beginning because they have to. The, the things that are out there just randomly Licensing— not licensing, ignoring it and thinking that they're gonna— I think that's— I don't think that works. It most certainly doesn't. I grew up for the first 18 years of my life relying on musical artists. They changed my life and a lot of people around me's life. So that music deserves to be paid.

Yep.

You don't just come in and think— I don't believe that. So, but I'm an older guy. I've been around a long time. time. So some things are good about that. Some things get a little stale.

Yeah.

But I believe that how the labels are handling those particular cases is the right way.

Yeah. Yeah. I mean, the technology should be able to help here. Of course, there needs to be legal precedent. But I mean, if you look at the way YouTube's handled it, if I upload a video with a Dr. Dre song on it, that's— that any money that I earn from that's going to route—

In the beginning, it wasn't.

Yes. Yes. So it wasn't. But But pretty quickly, and why they sold to Google was they had to pay out a bunch of money.

Well, because that's going to happen here too.

Exactly.

You know, but, but the money will flow though. But what— but the chain reaction that this causes, unfortunately, is the license— the people that are giving out licenses shrink, meaning they shrink what they're going to— they lessen what they're going to do. And it's going to cause a lot of this product that everybody's excited about to really be dumbed down. Oh yeah.

Yeah, that makes sense.

All right? So, you know, a couple of companies have gotten licensed. I guarantee you, I don't know, but I guarantee you, in my opinion, that those, um, that product would be dumbed down.

Yeah, no, that's true.

You know, so where the thing will shine is when you get producers that learn how to do this.

Yeah.

You know, when stereo first came out in extreme, there were records, a Beatle record, where the drums were on the right and the vocal was on the left. All right. But then people learn how to blend things together. So a lot of producers are using AI right now and it's really helping them.

Sure.

I mean, they— what they do is they, they even copy the AI, you know, the, the idea. What's going to break— it'll break a log. It breaks a logjam in your head.

Is that the best way that you see artists using AI as Uh, essentially pre-visualization, like what would happen?

That's what I see. The guys that I know, you know, the producers that I know, I talk to them, you know, and I, I keep in touch with a lot of producers because I was a producer and I relate in the record business. I'm— I really relate to record producers, their journey and stuff, you know. So when I was at Interscope, it was driven by record producers, you know, Swizz Beatz, Pharrell, Dre, Timbaland. You know, uh, will.i.am, uh, Polo Da Don, all these guys who were at Interscope at one time or another. I hope I didn't leave anybody out. I'm sure I did, and I'm sorry. But, um, you know, they, they are learning how to use this. It will come from them. And yeah, they'll be— look, there are, there are artists out now that can barely sing Happy Birthday.

Okay.

I'm sorry about that. Okay, so, so what's the difference if you can barely sing Happy Birthday, if you can't sing Happy Birthday at all, right? So that— there will always be boring, silly, you know, yeah, records like that, right?

Sure.

But the great artists and the great producers will maybe create real masterpieces, you know, because of this. It'll spark something. So I'm very pro-AI. I just think That in the beginning, there's always the Wild West in anything like this. You just got to— you've seen it enough, you just go, okay, it'll— but the guys that are running the labels are really trying to do the right thing here. And I think in this particular case, the artist and the labels are aligned.

Yeah, that's a good point.

Yeah. What do you think? So, knowing some of these entrepreneurs that are building in this space, They would push back and say this, and within streaming, if somebody was illegally streaming or pirating a song, they are taking a product that an artist and a label produced, and they're just consuming that product without paying. That is objectively wrong. In this situation, they are training on a bunch of music to create something entirely new off of that. And they would argue that—

That's fair use?

They would argue that that's fair use in the way that, like you said, the Beatles, you know, had their own inspiration.

I know, but that's the argument, right? Is it fair use or isn't it fair use? The artists and the labels think it's not fair use, and somebody who's making a lot of money on a new company thinks it is fair use, right?

Yeah, but here's—

That's a very convenient argument.

Yeah, yeah, and, you know, these companies are making money providing a tool. And I'm not— I'm actually not taking a side one way or another, but they're making an art— they make money from selling a tool that lets you create music. And but the— what's also happening is people are creating that music, and then they're going back to the labels, and they're going back to artists, and they're making new music that then gets listened to and monetized the normal way. So, I would argue in some ways that the music industry and artists are Yes, they, their, their music is being used to train models that, that then create other music, but they are also beneficiaries of that.

Yeah. But there are some people that are dead.

Sure. Yeah.

So, you know, Wilson Pickett is not going to go out and make a new record. So if you're learning on Wilson Pickett, I believe that his estate should make money. I believe that if you're learning on, you know, some, somebody who's around today, you know, George— not George Harrison, uh, you know, like, uh, uh, any of the artists that are around today where you're learning from their music, they should get— the prompts should get, uh, paid. Yeah, it's gonna be hard to monitor, hard to police and all that stuff, but they'll figure that out, you know. I just don't think that it's— I don't think it's fair use. I don't think it's free. Yeah, you know, I just don't.

That's why I saw this with the social media addiction trials, like big settlements can come decades down the road and be basically benchmarked to revenue, and, uh, and the money can flow. But it takes a long time to go through the court system. That's just the way things work in America. So what?

You know, it's so what? But it has to be done right. And, uh, it's a wonderful technology for music. It's fantastic. Um, but, you know, this has to be deals made.

Yeah, of course, of course. Yeah, always. Uh, what do you think about the future of live performances in the age of AI? It feels like it could be a really important proof of humanity, proof of talent. I went to the show. Sure, maybe there was some Auto-Tune in the loop, but I watched them perform. And if they can perform to a certain level, that gives me more confidence in the rest of their library.

Well, I happen to be fortunate. I have a really good friend in that business named Michael Rapinoe. He's the CEO of Live Nation. I learn a lot about the live business from him. Plus, I grew up with my friends playing live all the time. So I think live is live. Do you want to see somebody performing live, spilling their guts on the stage, or do you want to see a hologram or something? I don't know. I'd rather see the person live because they're just more exciting. So I don't know. I don't think there's any problem with that. I don't think it crosses. I just don't see it. I don't see it. I don't know the future. I have no idea. I'm not going to be here anyway. So, but it's, you know, I don't know. I have no idea.

I would just expect it to grow. I don't know. It feels like the Eras Tour was such a moment. And there's these certain moments that happen in American culture where shelling points, everyone comes together around a certain thing.

And, you know, to me it's simple. You got a new technology. It's gonna be great. It is great. And it's gonna be even better. People are gonna use it, but there's gonna be licenses and there's gonna be—

have to—

people get paid for it. And then the great talent and the great artists are going to show the world how to use it.

Yeah.

It's that simple to me.

Yeah.

It happens every time.

Yeah.

You know? So I'm not— I, I, I— it all comes down to what we talked about first, which is, which is what's great about this is it's teaching young people. That's where multidisciplinary behavior comes in. This is technology. And you're creative, right? So, when you really understand technology and you really understand the creative, you're going to really do well.

Yeah.

So, you shouldn't be siloed in school. You shouldn't go to school where all you do is play the guitar all day. You know what I mean? It's just, to me, that doesn't work. I mean, Juilliard's a nice place and I'm glad it exists, or Berklee, whatever, but it's not— It's not where I see the world going. And not if anybody cares, but me personally, since I'm on this show, at least you 2 guys care. So—

Do you think AI can help bridge that original gap that we were talking about? When I think about what it takes for a creative person to build a hardware product, for example, there's a lot of technical hurdles that can now be broken down.

Before there were things to break it down.

Yeah.

Let's put it this way. Dre and I had a record company.

Yeah.

Okay? We're creative people. We're both record producers. We built the biggest headphone company in the world. That's hardware, okay? And the reason why it's hardware is because it's goddamn hard.

Yep.

Okay? That's why not everybody does it. So we did it.

Yeah.

Right? We're creative guys that built a piece of hardware. That's why we started the school.

Yeah.

It all needs to be working together.

Yeah.

You know? And we built the number one— Beats was the number one headphone in 50 countries when we sold to Apple.

Yeah.

So we did it. And, um, because we live in a multidisciplinary world, we were both recording engineers, me and Dre.

Yeah.

And so we come from the non-wall background, you know. And, um, so that's why we built a school.

Yeah. It's—

that's it. And, you know, it's, uh, But when you go look at these— most companies right now, technology, engineering, design—

Yeah.

Don't talk retail. There's a lack of communication and a lack of understanding. Again, I ask the question again in case somebody just tuned in. Why can software companies not build really successful consumer products. There has to be an— I don't have the answer, but you guys are really smart. You talk to everybody in the world. I don't know why.

Yeah, it's tough.

Yeah.

But there has to be something at the core of what's going on that challenges that. No one could say, no, he's wrong. No, I'm right.

No.

Yeah.

Well, one of the things you brought up— you brought up Meta. You brought up Meta. I think one of the reasons that's been successful is they didn't try to reinvent too many things. They just made a good-looking pair of glasses that also had a camera in it. And that was enough. That's been enough.

Well, they sold 2 million. They didn't sell 20 million. We sold 2 million headphones in Brooklyn. It's not a really— it's not a massively successful product.

Yeah, they acquired Oculus to get the whole project started.

And by the way, in fairness, I have a pair.

I would argue that's different.

I have a pair and I enjoy using it. It's fun. But that does not a story make yet.

Yeah.

They make it. Now, I know who they hired to the head of the hardware division, and he's really good. So, but are there people at that company that can really communicate and empower him and that type of stuff? I don't know. Right? I don't know. Meta is a great company. Mark Zuckerberg is brilliant. But do I know about that? I don't know. They did— they've done a good job at getting that product out. Yeah.

I feel like one of the big lessons that people in the school should hopefully be imprinted on their minds is that you can be wildly successful in business without creating anything that's exactly new, right? You guys didn't create— you created desire and you created an amazing product, but you didn't create the headphone, and I think that when a lot of people think about entrepreneurship and creativity in business, they think, I need to come up with some totally novel idea, right?

Well, it starts out by, I don't think I'm Steve Jobs, okay?

But even Steve didn't create the phone.

No, but he had a much bolder attitude towards life than I did. He's much smarter than I am, right? Somebody asked me, what's the difference between you and Steve Jobs? I said, very simply, smarter than me. We were hanging out together. But no, you don't have to invent something new. I mean, headphones weren't new, but the attitude of headphones was new. Bose was out there saying, buy my headphones for $300 and we're gonna help you sleep. We were like, this is taking candy from a baby, right? We are not gonna help you sleep. We are gonna rock your head.

The ads were silence, not music. It was the opposite of music.

Exactly. So we had a real edge there. and they all look like medical equipment. So, your job as an entrepreneur is to find that hole in the market, right? Where's there a hole? We knew there was a hole there because Dre, first of all, most computers had their speakers facing the table. So, that was like, okay, great. Let's face them up. We're geniuses. Let's do it. Right?

No, there's so many times when you're looking at different categories, specifically with— I find it with consumer products where you're like, is there a law that says that it has to be done this way? And oftentimes, you do a little bit of research and you realize—

We're going back to understanding each other. Computers, like I went to a couple of computer companies, not Apple, and I witnessed this firsthand to where engineering Audio— the audio budget in a computer at the time was 50 cents.

Wow.

Okay.

Wow.

Right. So you want to know why? And music was being played through it.

Yeah. Yeah.

Guess what? That's not enough.

Yeah.

You know, so, but that's where the breakdown is.

Yeah.

Because design and engineering clash.

Yeah.

And that's where I keep saying it over and over again, but it's true. That's where our school comes in to help train people that are going to become the new engineers and the new designers and the new entrepreneurs to understand the why of each other's discipline. It sounds like kumbaya, but it's not. It's real.

Was there anything else you looked at in terms of product ideas, business ideas before settling on headphones, or was it—

Well, it came out of a real frustration of the record business. Because record business— again, the record business at a time was really cool. And music was the right thing to do and all that. But when I met Steve and those guys, Kool had moved the technology and I felt it.

Hmm.

I felt the shift. And I said, okay. The first guy that was really cool with technology was Morita. from Sony, the original founder of Sony. He had the Walkman. He really got it. Oga, who replaced him, really got it. He bought Columbia Pictures and Columbia Records.

That's right.

Right? And then they screwed it up because they got— and that gave Apple the opening to go take that idea, which Steve has said many times publicly. And so, So, when I saw that, I said, we have to learn a new trick. We have to move— I believe companies need to move laterally. I do. I felt the— I felt record companies especially needed to move laterally. That's why we created Beats and Beats Music inside of Interscope. We did it at the company.

Hmm.

So, we built a company in Beach that was bigger than Interscope. in 6 years, right? So obviously, tech and design and creativity all belongs in the same box. It's all just moving your company lateral. Like, we have a company called Complex right now.

Yeah.

And what we're trying to do there, we brought back Marc Ecko, we have Aaron Levant, my son Jamie's there. And we're trying— we have a lot of really good people and we're trying to mix disciplines in it. And we are creating an AI product alongside of it that will blend all these things together. And not all of them, but the things that we have together, because we're firm believers in that. You know, the record industry needs to move laterally. They need to own the enterprise of AI, not just license to everyone. That's, you know— Oh yeah.

Interesting.

They should own the enterprise. Why not? You know, there's no reason why not. Instead of licensing to everyone, own the enterprise yourself.

Yeah.

Right? We own Beats.

Yeah. Why is there so much historical sort of disaggregation in the music industry? Like the actual relationship between the artists and the end consumer, it's always been intermediated and it feels like that's been a problem.

It's insane. And it's ridiculous. Okay. All artists want is to be able to communicate with their audience. And ask me why Spotify and Apple Music don't have social.

Yeah.

Uh, I know why Apple Music doesn't and I don't know why Spotify doesn't, but that's why I said on an interview once recently that streaming is minutes away from being obsolete. What I meant by that is Unless they adapt to what artists really want, the artists are very resourceful. Right now they got to go to Instagram, TikTok. You know, it's like it's like a silly game, and that has to be fixed. That has to be fixed quickly because and the labels who have all this historic music need to be in the loop. They, whether they like it or not, they are a tech company. And they have to adjust to that. And if they don't, I believe it's not going to be great for them. Yeah.

Yeah, the Spotify story is interesting. I mean, Sean Parker, obviously involved in both Facebook and Spotify. And so, I think they had this delicate truce. Because if you remember in the early days of Spotify, everything you'd listen to would be shared on Facebook, and that was a huge growth driver.

But that's not why Spotify is not social. I don't believe that. That's why Apple's not social, because Apple Music— they don't— look, when we were there, we wanted to buy Musical.ly.

Oh yeah.

We brought those guys up there twice, but Apple doesn't do social, and they shouldn't do social. I get why they shouldn't. I was on the tail I was on the tail wagging the dog. You know what I mean?

Yeah.

I was on the tail. So, I understand why they didn't do it. But we, Trent Reznor and I, instinctively knew, especially Trent, that we needed social. And it's going to be limited without that. So, look, Apple, so far out of all the companies I found, they're still the most interesting, you know, because they still have that DNA in them. They just said, we're not going to— we don't do social.

Fine.

They don't. So that was not a good fit, you know. So, but that's cool. But it doesn't mean that music doesn't need it. Right now, you're not giving the artists what they want.

Yeah.

And the pay structure in streaming is all screwed up. So, if you're married— I see you're married, you got a ring on your finger, so maybe you have kids. If you have 2 or 3 kids, you have the family plan.

Oh yeah.

If you listen to— what's your favorite music?

Uh, don't take— my favorite artist is Yeat.

Yeat?

Yeah.

Oh great, okay. So you listen to that and your kids listen to...

Elmo.

Oh, they're babies. Okay, well, let's say They listen to Taylor Swift, Kendrick Lamar, and you listen to Fleetwood Mac and Madonna, right?

I'm paying, but the kids are listening disproportionately.

Yes. They lean on the button all day. So guess who gets paid? You pay the bill, but—

Taylor Swift gets paid crazy.

But Fleetwood Mac doesn't get anything.

Elmo's raking it in.

Yeah, exactly. Exactly. But that's— so the structure— so streaming is flawed.

Yeah.

And not complete. But Daniel's brilliant. Alex is really talented. Those guys at Spotify. So, they're going to figure a lot out. They may be sticking to a whole other paradigm that I don't even understand, right? So, but someone who helped bring streaming service to light, I can tell you that they're all missing social.

Yeah.

Period. That's why I have a crew of guys and girls that I work with. We're looking at something right now that's really interesting. We're doing it with one of the main companies. And we have an idea that we believe is unique and good and great for the artist and great for the labels. And that's what we're going to do.

Yeah, we have— we've had some guys from Spotify on and I think that One of the interactions I was most excited about that they've been working on and working towards is making sure that the people that are listening to artists the most get access to the concert tickets, right? Because an artist doesn't necessarily benefit if they—

Yeah, but that's, that's self-serving, you know? I mean, I get it, but the artist should be doing that.

Sure.

Yeah.

Yeah.

Again, you don't need third parties to do a lot of this stuff, you know? Why, why do the labels need third parties to deliver their music? I'll tell you why they don't, right? But they do, right? So that all should evolve with the artists in the front of the paradigm, you know, making the money and doing great and communicating. So, um—

Yeah, very differently in Hollywood with Disney Plus and Hulu?

Well, hang on.

No?

Yes and no, and I'll tell you why. Because when Netflix came to town, they came to town with a big checkbook. And unfortunately, all these companies are public. Now this, I'm going to make this official. This is my opinion, okay? But they all licensed them their music, at least most of them did.

Why?

Because they got big checks and helped make their numbers. Well, guess what? They created a monster.

Yeah.

Right? And now they're trying to catch up, right? So, music business is the same thing. They license their music to Spotify, Apple Music, and Amazon. Well, Spotify is worth more than all the labels together. Guess how much IP they own? Zero. Somebody's podcast maybe or something.

Joe Rogan.

I don't know. But that's the point. So the movie business didn't get it. They got it late, but at least they got it. And I think that's going to happen in music. I think the music companies are going to be more involved. And AI is the opening to do it. AI is the road to— that doesn't mean Spotify is not, but Spotify is going to have to morph as well. Okay? You can't just— no ride goes forever. When I was a kid— not a kid, I'm sorry. I wasn't a kid. It was 2002. I was nowhere near a kid.

Just a spring chicken.

I was nowhere near a kid in 2002. But when I saw piracy, I went and met with 3 tech companies. And one of the tech companies, very high-up guy at Intel, said to me, Jimmy, this is a great— I started talking about the recording studio and the people that are suffering. And it's not the big stars, it's the kids that in the studios. And he said, what a fabulous story. He said, Jimmy, but not every industry was made to last forever. That was powerful, right? I said, he's right.

Sorry, this music thing had a good run, but—

And the rest of my industry—

It's over.

But it's not music, it's the business of music and what that looks like, right? So I carried that with me. And then when I met Steve and Eddie after that, I said, holy shit, these guys, They're the next step, right? So there is a next step now, and Spotify may grab it. You know, they have all the tools available and the money, the capital, and everything. So they could recreate their business all the time. And you got a guy like Alex running it who's really, really talented. The people at Apple are really talented. You got Oliver and that team over there. They're all really good. So maybe they'll morph the company into something that it needs to be, or maybe the labels will figure it out. And they'll do more of what this new model needs to be. But to have— to be just a licensor of music, to me, first of all, it's boring. Second of all, it has nothing to do with any other discipline in the world. It doesn't.

Yeah.

And you need to— to have a proper company today, you have to have blend of disciplines inside your company, proven by 2 great, great people, Morita from Sony and Steve Jobs at Apple. Period.

Yeah.

They got it top to bottom and they set the tone. Who out there doesn't want to be Steve Jobs? Everybody's— he's the new Steve Jobs, he's the old Steve Jobs, he's not Steve Jobs, he is Steve Jobs. Steve Jobs.

Yeah.

And it's saying something I've never— everyone wants to be, and yet I've never seen someone and thought, wow, damn, they're the new Steve Jobs.

Well, because they're missing what Steve was. Steve was the ultimate. He knew it. He knew the goal was where technology and the liberal arts meet. And there's nothing more evident in that than in AI.

Do you think he would've liked AI?

I don't know. I never tried. It was a friend of mine. He has an incredible wife, Laurene Powell Jobs, who's an incredible human being. And Jony Ive is— incredible people. I can't speak for them, for Steve. He was his own guy, but you know.

Yeah. A friend of the show was trying to compare AI messaging to the launch of GarageBand and democratization of creative tools. And I thought there were some good points there.

Although he didn't like streaming.

Yeah.

He was very public about that.

Yeah.

But who knows what— maybe he was right.

You mentioned the tail wagging the dog at Apple. If you're a tail, should you try and wag the dog? Is that advice that you would give to someone who works in a large organization if they're Well, what I was saying is that, look, there's no hiding it.

Big companies, music, outside of music companies, nobody wants the tail wagging the dog.

But is it a fool's errand to try?

I don't know. I don't know. But I always use Apple as an example because I think it's run really well. They blend it as well as you could blend it. You know, Steve was a big music guy and so is Eddie. So they do it really well. But, you know, it's— I don't— I think, I think the record company should do it.

Hmm.

I really do. I, I, I don't get it. I, I think that they should do it. They should take it on themselves. And Spotify's a music company. They, they can do it. Live Nation.

Isn't there some interesting positioning that the record companies, at least if they banded together, could work with the artists to say, hey, you have an— if you work with— if you subscribe to Apple Music or Spotify, Spotify and Apple Music are taking a big cut. If you work with us, a lot more revenue is actually going to the artists. Is that like how you position it?

I don't know. I don't know if that's right. I just— because it's a hard Bell to unring. Yeah, I'm not. I'm not looking at streaming. That happened already. I don't think the labels are going to start streaming services. You know, not in any time short in the next few years anyway. But I do think there could be a new AI business. Yeah, and that's where the opportunity lies. And you have Spotify, you have the labels, you have the artists. So there's something in there that. needs to evolve out of this that makes more sense. And I see it all together, but I always have. That's why we started the school we started. It just all goes back to that. It's just the way people think. That's how we think.

Yeah. I mean, obviously, the answer is probably both, but I would be interested to see if you're more optimistic about the entrepreneurship that comes out of your school Or the transformation within industry?

The school was built to transform inside the industry.

Okay.

Yeah, it was built for jobs. It turned into an entrepreneurial place.

Of course.

I guess we caught that wave, everybody wanting to be like one of these guys, Zuckerberg or something. But it was made to help communication inside Apple, Google, all these giant companies that are taking over the entertainment business, literally. Yeah. Yeah. So, it's not gonna happen in my lifetime, but we wanted to build as many people as possible to infiltrate and help make that all one thing rather than have to be a tail wagging a dog. You know? I mean, look, Intel's buying Paramount and Warner, right? I mean, fundamentally, I mean, and David Ellison is terrific. You know, he's a really smart, and understands where these 2 things cross. So hopefully there'll be some great stuff there.

Yeah, it's going to be exciting. Well, thank you so much for coming on the show. Hey, you're welcome. It's been an honor and pleasure.

It was fun.

Let's do it again as you're making some more of these plays.

Oh, I don't know. But it was— you're very far from my house. Maybe if you come to my house, we can do it over there. That's fine. But anyway, thanks. This is a big world behind Yeah, I see that. Nice set.

Yeah, thank you.

The lighting.

We reinvent television.

Well, we will see you tomorrow at 11:00 AM sharp.