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At the beginning of 2002 Apple faced a challenge. The seamless connection between your
1 D6 }6 M: d/ S6 k8 y+ R" DiPod, iTunes software, and computer made it easy to manage the music you already owned.9 ~) W6 p7 e# Q2 {/ S
But to get new music, you had to venture out of this cozy environment and go buy a CD or
0 P4 w _8 L" hdownload the songs online. The latter endeavor usually meant foraying into the murky: w( p q$ X9 }. M
domains of file-sharing and piracy services. So Jobs wanted to offer iPod users a way to
! V0 {. K. r5 ?; Xdownload songs that was simple, safe, and legal.5 y+ K' e7 M( C9 B+ M
The music industry also faced a challenge. It was being plagued by a bestiary of piracy3 C6 w4 g1 h7 G& p2 y9 U
services—Napster, Grokster, Gnutella, Kazaa—that enabled people to get songs for free., u0 z/ G/ P+ q; ^, @1 s, ?
Partly as a result, legal sales of CDs were down 9% in 2002.3 c; X3 L( k$ Y
The executives at the music companies were desperately scrambling, with the elegance: r4 r8 s: Z0 a% g d& g2 J9 T9 R* K
of second-graders playing soccer, to agree on a common standard for copy-protecting
, E1 ]+ n9 |- e0 W$ l7 A4 H1 j5 Ndigital music. Paul Vidich of Warner Music and his corporate colleague Bill Raduchel of
7 W* K# p% d& K: C; b+ P* wAOL Time Warner were working with Sony in that effort, and they hoped to get Apple to, E. ~0 E* }7 W/ d5 A) a8 M
be part of their consortium. So a group of them flew to Cupertino in January 2002 to see
8 t5 r2 p! F5 }- I/ l" H7 M0 `; L X; t' ^Jobs.
5 s# R6 V) V) \/ F! H" F8 dIt was not an easy meeting. Vidich had a cold and was losing his voice, so his deputy,8 @$ _, v8 q& V# i( U
Kevin Gage, began the presentation. Jobs, sitting at the head of the conference table,3 m# y i$ \4 x; g+ a! d
fidgeted and looked annoyed. After four slides, he waved his hand and broke in. “You have7 F) f- O, p0 j$ _9 E
your heads up your asses,” he pointed out. Everyone turned to Vidich, who struggled to get + a: }2 Q' H! f
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3 ~/ A$ j, r9 }: @ C$ ~his voice working. “You’re right,” he said after a long pause. “We don’t know what to do./ u4 n7 Y, d% f
You need to help us figure it out.” Jobs later recalled being slightly taken aback, and he3 N9 G1 A7 l, B2 Q
agreed that Apple would work with the Warner-Sony effort.# Z- d& Q: M& G; m
If the music companies had been able to agree on a standardized encoding method for
6 L0 j; o; O) n) Bprotecting music files, then multiple online stores could have proliferated. That would have7 N3 Y. F: E* T: w
made it hard for Jobs to create an iTunes Store that allowed Apple to control how online
2 b" c1 j+ r9 \. ?! k; `9 Usales were handled. Sony, however, handed Jobs that opportunity when it decided, after the
$ w) H4 b8 G1 q5 U% nJanuary 2002 Cupertino meeting, to pull out of the talks because it favored its own+ ~! a5 x3 T3 ^% y1 O( N! v
proprietary format, from which it would get royalties.
1 V* X* r( C# t) [# h S) p$ d“You know Steve, he has his own agenda,” Sony’s CEO Nobuyuki Idei explained to Red
) H6 A- Z, ^ U* yHerring editor Tony Perkins. “Although he is a genius, he doesn’t share everything with' \0 W: i; {2 s# b I
you. This is a difficult person to work with if you are a big company. . . . It is a nightmare.”5 ]9 b; i* E* z. k
Howard Stringer, then head of Sony North America, added about Jobs: “Trying to get5 i/ R$ A3 L7 H1 s
together would frankly be a waste of time.”
: q8 @" V! n5 R* XInstead Sony joined with Universal to create a subscription service called Pressplay.' N- F, r4 m) t
Meanwhile, AOL Time Warner, Bertelsmann, and EMI teamed up with RealNetworks to
) i! Z4 u' T- Y! a" zcreate MusicNet. Neither would license its songs to the rival service, so each offered only
6 d0 W h' c5 zabout half the music available. Both were subscription services that allowed customers to2 b* G3 n; V* f+ m
stream songs but not keep them, so you lost access to them if your subscription lapsed.
, _" @2 U3 J0 s1 P' b) [6 `. k2 PThey had complicated restrictions and clunky interfaces. Indeed they would earn the
3 a% o% A- V& z: k) ~, ?dubious distinction of becoming number nine on PC World’s list of “the 25 worst tech
: [+ W1 D0 v6 K | [8 I+ k+ J: I& Hproducts of all time.” The magazine declared, “The services’ stunningly brain-dead features+ A( |2 i( ^, {$ i8 m9 z
showed that the record companies still didn’t get it.”
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# `8 X* R. o3 M! v# q# w0 OAt this point Jobs could have decided simply to indulge piracy. Free music meant more
0 Q+ L) z' t& I$ g' ~ n/ \valuable iPods. Yet because he really liked music, and the artists who made it, he was
- K+ k2 e: X1 ~opposed to what he saw as the theft of creative products. As he later told me:8 a1 \& X$ j( i
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From the earliest days at Apple, I realized that we thrived when we created intellectual
: h0 G* q! ^5 @- Bproperty. If people copied or stole our software, we’d be out of business. If it weren’t, j+ |1 R7 C2 k* y3 J8 D1 V- ^
protected, there’d be no incentive for us to make new software or product designs. If* O# B, z6 H `+ Q Z* i& Q4 Q
protection of intellectual property begins to disappear, creative companies will disappear or
/ \9 a3 ? |& v4 onever get started. But there’s a simpler reason: It’s wrong to steal. It hurts other people. And, ~7 S! e+ }) u4 Y \! M) h" X
it hurts your own character.
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: ~- v* {8 }& C5 H6 B9 PHe knew, however, that the best way to stop piracy—in fact the only way—was to offer an
6 u* d0 X* n+ R7 V5 ealternative that was more attractive than the brain-dead services that music companies were
/ G4 ?$ D. Q/ N# D8 j: iconcocting. “We believe that 80% of the people stealing stuff don’t want to be, there’s just+ \6 t' O; t* c8 l1 {4 p6 z9 Z
no legal alternative,” he told Andy Langer of Esquire. “So we said, ‘Let’s create a legal
7 W4 K5 i V. nalternative to this.’ Everybody wins. Music companies win. The artists win. Apple wins.
# [. y" z$ N' J; C; |/ fAnd the user wins, because he gets a better service and doesn’t have to be a thief.”
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So Jobs set out to create an “iTunes Store” and to persuade the five top record companies0 {7 y0 L+ b0 d7 o* _
to allow digital versions of their songs to be sold there. “I’ve never spent so much of my. O& k) |( X* }, P' W# {/ b
time trying to convince people to do the right thing for themselves,” he recalled. Because; u z$ }# u+ h) x, ]+ c
the companies were worried about the pricing model and unbundling of albums, Jobs
: J" T l/ v. u* e5 b ?& j) Ppitched that his new service would be only on the Macintosh, a mere 5% of the market.
g2 h7 r1 ]" W# m E( B7 WThey could try the idea with little risk. “We used our small market share to our advantage
- B9 {# Z* o5 G3 z8 H4 [4 j5 uby arguing that if the store turned out to be destructive it wouldn’t destroy the entire, L' E; D5 t: Q5 b4 A$ C# F' g
universe,” he recalled.5 v6 x( P4 H' P+ O
Jobs’s proposal was to sell digital songs for 99 cents—a simple and impulsive purchase.
; v, w* c, ^" c' qThe record companies would get 70 cents of that. Jobs insisted that this would be more) C5 O, ^* j9 f
appealing than the monthly subscription model preferred by the music companies. He: E# [" k4 u3 N2 ?% y
believed that people had an emotional connection to the songs they loved. They wanted to
% w+ [. [8 @6 Town “Sympathy for the Devil” and “Shelter from the Storm,” not just rent them. As he told. x. q: O# }7 c/ F# e0 D. P
Jeff Goodell of Rolling Stone at the time, “I think you could make available the Second6 V. e* t* Z8 |2 o0 Q
Coming in a subscription model and it might not be successful.”; H* p- ? S, H L
Jobs also insisted that the iTunes Store would sell individual songs, not just entire& F3 k# B: n9 W2 Q+ |9 g9 j
albums. That ended up being the biggest cause of conflict with the record companies,5 W+ G0 Z. {. v( x7 W) h
which made money by putting out albums that had two or three great songs and a dozen or
$ {9 X6 \: H; o& C( V% Gso fillers; to get the song they wanted, consumers had to buy the whole album. Some" R! D1 }/ T& i3 F
musicians objected on artistic grounds to Jobs’s plan to disaggregate albums. “There’s a
# |5 f( g! c7 L; B! ^" mflow to a good album,” said Trent Reznor of Nine Inch Nails. “The songs support each8 D4 p" C$ l( b2 i0 @
other. That’s the way I like to make music.” But the objections were moot. “Piracy and/ P! X$ J$ n$ N3 k' [+ a
online downloads had already deconstructed the album,” recalled Jobs. “You couldn’t
- H) J1 Z, [1 n+ F0 a. Lcompete with piracy unless you sold the songs individually.”
1 R0 X! ^ H" f- `0 rAt the heart of the problem was a chasm between the people who loved technology and. t5 W1 z, L- y* Z# w
those who loved artistry. Jobs loved both, as he had demonstrated at Pixar and Apple, and
4 v# t" ~9 A$ n3 c4 hhe was thus positioned to bridge the gap. He later explained:
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When I went to Pixar, I became aware of a great divide. Tech companies don’t
" F) J) Q; [) U4 R9 j) U( m3 M$ G$ R, x7 f3 uunderstand creativity. They don’t appreciate intuitive thinking, like the ability of an A&R4 f" |+ L5 n- J% h+ p: i, H
guy at a music label to listen to a hundred artists and have a feel for which five might be* w/ }5 C+ w: i& _4 q7 s: e; i
successful. And they think that creative people just sit around on couches all day and are
) }8 r, G, H9 x6 c! F) \4 |7 `undisciplined, because they’ve not seen how driven and disciplined the creative folks at$ i) s0 h7 M$ K* l4 A
places like Pixar are. On the other hand, music companies are completely clueless about! q! o( U% r# S8 m7 S8 {* e
technology. They think they can just go out and hire a few tech folks. But that would be( O6 u% r% [( I
like Apple trying to hire people to produce music. We’d get second-rate A&R people, just. l! n+ S% i3 O% ^0 e
like the music companies ended up with second-rate tech people. I’m one of the few people
* @' @1 @& L5 |* o9 wwho understands how producing technology requires intuition and creativity, and how
/ Z5 x) h- Q4 w) F8 d' cproducing something artistic takes real discipline.& E2 T' \8 U& s* B! {% W
. }4 I; F/ W5 WJobs had a long relationship with Barry Schuler, the CEO of the AOL unit of Time
9 D/ n6 M/ }% h6 n: ?Warner, and began to pick his brain about how to get the music labels into the proposed! @0 J7 ^- g# m: T7 w" |8 G c
iTunes Store. “Piracy is flipping everyone’s circuit breakers,” Schuler told him. “You
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should use the argument that because you have an integrated end-to-end service, from9 r2 ]+ M$ e8 c$ S- D7 w; J- ~, J
iPods to the store, you can best protect how the music is used.”( ^6 e3 R' {; A2 b1 }6 `; Q3 J0 m
One day in March 2002, Schuler got a call from Jobs and decided to conference-in
4 X7 }! ~6 k1 _2 X1 m- _) r" e' }4 aVidich. Jobs asked Vidich if he would come to Cupertino and bring the head of Warner$ w4 v* R' i$ b5 G+ G+ l
Music, Roger Ames. This time Jobs was charming. Ames was a sardonic, fun, and clever9 L A- d9 @ y% P! a( w* i, C4 G9 u
Brit, a type (such as James Vincent and Jony Ive) that Jobs tended to like. So the Good/ {; v, \" J4 I% z6 _& B
Steve was on display. At one point early in the meeting, Jobs even played the unusual role' `, [* s5 z5 O1 g5 J
of diplomat. Ames and Eddy Cue, who ran iTunes for Apple, got into an argument over
2 b$ q2 U1 }9 `why radio in England was not as vibrant as in the United States, and Jobs stepped in,
( W1 D" k, ~; i* y, Dsaying, “We know about tech, but we don’t know as much about music, so let’s not argue.”
6 G9 _; I9 R N6 X; ?Ames had just lost a boardroom battle to have his corporation’s AOL division improve
* T k- ?' g: d: ]0 \! E8 Yits own fledgling music download service. “When I did a digital download using AOL, I
: S. X5 L4 R& _" U# l7 y+ Ycould never find the song on my shitty computer,” he recalled. So when Jobs demonstrated
7 X. c9 e* }# u. g$ c# Fa prototype of the iTunes Store, Ames was impressed. “Yes, yes, that’s exactly what we’ve
b4 e1 S) ^" X1 `been waiting for,” he said. He agreed that Warner Music would sign up, and he offered to
8 J9 A7 c4 y$ C) F, @help enlist other music companies.% R* v {/ E, y# F1 t
Jobs flew east to show the service to other Time Warner execs. “He sat in front of a Mac W6 v' [* l2 [+ y. b# L5 E& S
like a kid with a toy,” Vidich recalled. “Unlike any other CEO, he was totally engaged with
1 G6 f, d: l3 G4 l. o. I9 nthe product.” Ames and Jobs began to hammer out the details of the iTunes Store, including! C$ w$ J: g# {- y0 ?4 D$ D
the number of times a track could be put on different devices and how the copy-protection
" t' z' q0 Q3 m' [system would work. They soon were in agreement and set out to corral other music labels.8 _" P; X3 C5 k$ V
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Herding Cats
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The key player to enlist was Doug Morris, head of the Universal Music Group. His domain
% [" W6 g" o9 S3 n' Kincluded must-have artists such as U2, Eminem, and Mariah Carey, as well as powerful! H5 S4 }4 V. F1 k0 _- m- X
labels such as Motown and Interscope-Geffen-A&M. Morris was eager to talk. More than
) t7 c1 E' S% A9 |1 [2 y! b( hany other mogul, he was upset about piracy and fed up with the caliber of the technology9 p/ C, e( k; C- i4 W" @
people at the music companies. “It was like the Wild West,” Morris recalled. “No one was6 ^5 C# w6 r: H
selling digital music, and it was awash with piracy. Everything we tried at the record# W2 B: a) z3 _( L: z( P
companies was a failure. The difference in skill sets between the music folks and
0 R3 V7 b; M5 Ktechnologists is just huge.”
( F' Q! b, \4 L* D- O- A1 wAs Ames walked with Jobs to Morris’s office on Broadway he briefed Jobs on what to* ^. l4 R2 e! L% }
say. It worked. What impressed Morris was that Jobs tied everything together in a way that8 T' x' C4 `& j7 L
made things easy for the consumer and also safe for the record companies. “Steve did/ N" V( h4 g0 @; S1 u& F4 b8 U
something brilliant,” said Morris. “He proposed this complete system: the iTunes Store, the
$ s! C1 o9 y( s: ], F' O& R @) i* Z& Smusic-management software, the iPod itself. It was so smooth. He had the whole package.”
& F* e: D0 q8 m7 ?+ h$ MMorris was convinced that Jobs had the technical vision that was lacking at the music& S, M1 p) p" i% a$ t, h
companies. “Of course we have to rely on Steve Jobs to do this,” he told his own tech vice
! k2 C1 d0 C) ?! S5 kpresident, “because we don’t have anyone at Universal who knows anything about
: M4 R: f( P' g$ ? I7 Ztechnology.” That did not make Universal’s technologists eager to work with Jobs, and! R$ {4 S* I \/ d, e. f ?0 L
Morris had to keep ordering them to surrender their objections and make a deal quickly.
3 V/ c( P& C& ]( N% \/ OThey were able to add a few more restrictions to FairPlay, the Apple system of digital rights
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management, so that a purchased song could not be spread to too many devices. But in4 |( L# N: s2 z! s2 o
general, they went along with the concept of the iTunes Store that Jobs had worked out
2 X2 h9 H# w& `6 \8 U/ rwith Ames and his Warner colleagues.9 H. f5 a( u' M' c# [6 x7 F
Morris was so smitten with Jobs that he called Jimmy Iovine, the fast-talking and brash
! i3 M4 A5 ]$ [chief of Interscope-Geffen-A&M. Iovine and Morris were best friends who had spoken4 g9 i x; i; @. \0 D3 z. E* @
every day for the past thirty years. “When I met Steve, I thought he was our savior, so I; s# b: {0 g) I- q3 |: e/ x
immediately brought Jimmy in to get his impression,” Morris recalled.
, p! J' Q5 v/ y9 c, h' }Jobs could be extraordinarily charming when he wanted to be, and he turned it on when
; [% {5 |. h8 R/ `: |; UIovine flew out to Cupertino for a demo. “See how simple it is?” he asked Iovine. “Your
* {% g$ V8 |, o5 V7 Atech folks are never going to do this. There’s no one at the music companies who can make
# t' l& x2 k) a/ l1 tit simple enough.”
! {* A. z, |2 XIovine called Morris right away. “This guy is unique!” he said. “You’re right. He’s got a
: e s! G0 I" c1 E4 ~8 f. i% ~turnkey solution.” They complained about how they had spent two years working with
% N3 `! a0 m0 n7 p1 s* o1 j k: {Sony, and it hadn’t gone anywhere. “Sony’s never going to figure things out,” he told
3 K( `: k3 U! O2 t# Y0 ^$ xMorris. They agreed to quit dealing with Sony and join with Apple instead. “How Sony
2 q1 u; |2 }0 R c1 w8 _9 N1 j9 b# qmissed this is completely mind-boggling to me, a historic fuckup,” Iovine said. “Steve
7 U1 U: X$ H+ ^7 kwould fire people if the divisions didn’t work together, but Sony’s divisions were at war
3 X0 s7 v$ q1 P6 F, [, h, Hwith one another.”
k. F7 u4 a" v( NIndeed Sony provided a clear counterexample to Apple. It had a consumer electronics
. E! D3 W3 ]' u/ d- Q% Fdivision that made sleek products and a music division with beloved artists (including Bob6 ~; \* g W# ?$ d) x" f
Dylan). But because each division tried to protect its own interests, the company as a whole
3 o) h% d6 o! I$ j1 b; a' W. Wnever got its act together to produce an end-to-end service.
. r! j; x0 t* r4 FAndy Lack, the new head of Sony music, had the unenviable task of negotiating with$ ]+ p. d" ?0 a- ~1 B& t% e: p( W
Jobs about whether Sony would sell its music in the iTunes Store. The irrepressible and/ M4 Y" [& A( @, Q
savvy Lack had just come from a distinguished career in television journalism—a producer
& G# ` i2 R2 @" p$ v: P; wat CBS News and president of NBC—and he knew how to size people up and keep his
0 q! D( X5 V, z5 e; Ksense of humor. He realized that, for Sony, selling its songs in the iTunes Store was both2 \, S4 g. m3 [: W$ t* t/ E0 @9 ]
insane and necessary—which seemed to be the case with a lot of decisions in the music9 v, ~" G9 |+ f4 u4 V$ L7 K
business. Apple would make out like a bandit, not just from its cut on song sales, but from) C9 @: d z2 K4 j3 J b& W
driving the sale of iPods. Lack believed that since the music companies would be
. c4 `+ X3 t+ ^ T8 A3 presponsible for the success of the iPod, they should get a royalty from each device sold.
/ C2 V6 W( l1 C6 Z$ T2 aJobs would agree with Lack in many of their conversations and claim that he wanted to$ a* i4 ^" }) R5 a1 b/ ]( W
be a true partner with the music companies. “Steve, you’ve got me if you just give me
. o$ G% H. G8 {7 K( Asomething for every sale of your device,” Lack told him in his booming voice. “It’s a3 p2 R8 g* m3 ^4 l( y
beautiful device. But our music is helping to sell it. That’s what true partnership means to' k# y4 x, W- w$ v0 A. O
me.”
1 R7 X1 z: h' R9 q6 {5 H“I’m with you,” Jobs replied on more than one occasion. But then he would go to Doug
- o# M6 V8 p- X+ o- d, ^2 p& CMorris and Roger Ames to lament, in a conspiratorial fashion, that Lack just didn’t get it,
4 V. Y2 R! k' {9 athat he was clueless about the music business, that he wasn’t as smart as Morris and Ames.
+ u( v6 _; C$ S, D6 ^7 {1 h" {“In classic Steve fashion, he would agree to something, but it would never happen,” said
& H, R2 ~% Y% @! ALack. “He would set you up and then pull it off the table. He’s pathological, which can be y0 P2 w0 z2 n$ |+ N. U m
useful in negotiations. And he’s a genius.”
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Lack knew that he could not win his case unless he got support from others in the Z7 Q9 X# I; W. v5 u' j. E/ Z% B+ I
industry. But Jobs used flattery and the lure of Apple’s marketing clout to keep the other u% b; d6 v# q% N4 G }6 c
record labels in line. “If the industry had stood together, we could have gotten a license fee,
. R; Q) ~! s+ A% ?giving us the dual revenue stream we desperately needed,” Lack said. “We were the ones
: U5 J, p/ A+ w3 a4 ?) N/ Z9 hmaking the iPod sell, so it would have been equitable.” That, of course, was one of the2 X7 J. t2 ?9 R, ~" m
beauties of Jobs’s end-to-end strategy: Sales of songs on iTunes would drive iPod sales,3 Q6 ^, ?' Q a7 \ S+ ^
which would drive Macintosh sales. What made it all the more infuriating to Lack was that+ z6 t, N7 t" A% H9 L9 E
Sony could have done the same, but it never could get its hardware and software and! ]1 y* @3 ^; k" _, }
content divisions to row in unison.$ k7 r% o6 K5 z' A) V) }7 q* |
Jobs tried hard to seduce Lack. During one visit to New York, he invited Lack to his7 `/ Q0 u0 `7 @/ @: Y
penthouse at the Four Seasons hotel. Jobs had already ordered a breakfast spread—oatmeal
* ^4 r# _: z+ @and berries for them both—and was “beyond solicitous,” Lack recalled. “But Jack Welch' X V) K5 _; Y! f2 q: R; o, b
taught me not to fall in love. Morris and Ames could be seduced. They would say, ‘You
9 _+ |* N- f6 `$ j, i6 [don’t get it, you’re supposed to fall in love,’ and they did. So I ended up isolated in the
- \, ?. w7 r' sindustry.”
* F7 j. ~3 x _3 |Even after Sony agreed to sell its music in the iTunes Store, the relationship remained
% W. U. Y( g" N, W3 t7 R- \# ?. Hcontentious. Each new round of renewals or changes would bring a showdown. “With5 c- ~5 @' Q" z1 D* L; \
Andy, it was mostly about his big ego,” Jobs claimed. “He never really understood the
6 n7 i4 J+ Z8 G1 Nmusic business, and he could never really deliver. I thought he was sometimes a dick.”
( ~# L, P# N+ e9 n/ n" J1 Y- kWhen I told him what Jobs said, Lack responded, “I fought for Sony and the music
+ z: z' k& n5 Cindustry, so I can see why he thought I was a dick.”
V* L1 N; U0 q- OCorralling the record labels to go along with the iTunes plan was not enough, however.
* J: h. u2 T7 w$ x, CMany of their artists had carve-outs in their contracts that allowed them personally to/ s j* M' x3 T) G# }. \& P, ^ k1 j
control the digital distribution of their music or prevent their songs from being unbundled7 z! q4 m2 R* W7 b6 ^8 y5 a8 M3 L
from their albums and sold singly. So Jobs set about cajoling various top musicians, which4 x7 n) y& |! Z* F# l- Q# G6 v
he found fun but also a lot harder than he expected.* z" r3 ]; e) _' Y5 K; i4 N
Before the launch of iTunes, Jobs met with almost two dozen major artists, including" y6 n' ~* p# y/ A3 R
Bono, Mick Jagger, and Sheryl Crow. “He would call me at home, relentless, at ten at8 M+ A/ T0 G, @( _1 S$ c6 h. X
night, to say he still needed to get to Led Zeppelin or Madonna,” Ames recalled. “He was
# Z) D( }; b. r, L6 { `9 Q, U' f8 [' Mdetermined, and nobody else could have convinced some of these artists.”' W* E4 w4 C: `' x. R
Perhaps the oddest meeting was when Dr. Dre came to visit Jobs at Apple headquarters.# i" r# k" @; ?- ]6 {& @
Jobs loved the Beatles and Dylan, but he admitted that the appeal of rap eluded him. Now
# h' b! l2 Q* z. n' F8 h' zJobs needed Eminem and other rappers to agree to be sold in the iTunes Store, so he& w! S+ `4 `7 ]4 Q G) ?" H
huddled with Dr. Dre, who was Eminem’s mentor. After Jobs showed him the seamless way& d% K% n6 M( K" F2 r
the iTunes Store would work with the iPod, Dr. Dre proclaimed, “Man, somebody finally
6 j9 A" P# c& M& O, t) K. agot it right.”
3 g* i; i- Z- q- _ B0 vOn the other end of the musical taste spectrum was the trumpeter Wynton Marsalis. He* s: }! f( f2 r- g
was on a West Coast fund-raising tour for Jazz at Lincoln Center and was meeting with6 ` l# ~( |# N+ \: a3 e7 k
Jobs’s wife, Laurene. Jobs insisted that he come over to the house in Palo Alto, and he$ V! q. e8 ?$ v: k
proceeded to show off iTunes. “What do you want to search for?” he asked Marsalis.: S" j8 f/ w0 `9 y4 q
Beethoven, the trumpeter replied. “Watch what it can do!” Jobs kept insisting when
; N- M% [8 W+ h, m( CMarsalis’s attention would wander. “See how the interface works.” Marsalis later recalled,3 X% E# p0 a4 o# ~! b x2 v7 S3 l
“I don’t care much about computers, and kept telling him so, but he goes on for two hours.
- [ i; q9 w6 y$ H$ [' @+ k( t e
3 k; ~: \% k3 P% A$ C) w" D! c+ c- N ?: D7 W
( L) c6 N/ a* M- @
( B: i" q. ?% _% l
" ^1 ~" x" D0 |% F, ^: d$ H3 t, ?% M# h, q- x5 q3 I/ \
6 l# l/ |1 N2 B8 r' G/ F6 J1 z9 \# ?5 M; Q9 H3 D: o" T
# A) ?$ Y8 I5 K+ j9 r1 o2 b$ f1 k
He was a man possessed. After a while, I started looking at him and not the computer,1 ^; j ^3 p! R, p
because I was so fascinated with his passion.”
0 ]9 e- A# v. L- |9 c/ _
( X/ s( O% ~# C- \Jobs unveiled the iTunes Store on April 28, 2003, at San Francisco’s Moscone Center. With( b, B% J' N9 K- h4 e) g2 U2 J
hair now closely cropped and receding, and a studied unshaven look, Jobs paced the stage
5 Z+ Y, F6 G/ z% kand described how Napster “demonstrated that the Internet was made for music delivery.”
1 f. [, Q5 L' B& W$ t2 W9 cIts offspring, such as Kazaa, he said, offered songs for free. How do you compete with
& p+ S( D9 S, h1 H! `that? To answer that question, he began by describing the downsides of using these free
$ ~6 \& a9 b3 t9 P2 nservices. The downloads were unreliable and the quality was often bad. “A lot of these
& ]' E$ B' b' I3 E% Ysongs are encoded by seven-year-olds, and they don’t do a great job.” In addition, there
" N$ ?) O9 \5 O' U, i& q5 gwere no previews or album art. Then he added, “Worst of all it’s stealing. It’s best not to
" t" t5 [# q) R5 e/ n6 j9 bmess with karma.”
. N; \* ~8 F: l# X2 ]( j' ^; l5 U! |Why had these piracy sites proliferated, then? Because, Jobs said, there was no0 }3 N/ h, ?; ]; { Z
alternative. The subscription services, such as Pressplay and MusicNet, “treat you like a' n9 _0 }7 x) V
criminal,” he said, showing a slide of an inmate in striped prison garb. Then a slide of Bob
$ b$ e2 y# h( k5 y4 uDylan came on the screen. “People want to own the music they love.”& c+ ^4 R! \2 b1 z% W8 Z) Q/ _
After a lot of negotiating with the record companies, he said, “they were willing to do- Z8 f- w/ q' ~6 h0 W; [
something with us to change the world.” The iTunes Store would start with 200,000 tracks,3 E n% q |% O0 N1 \ n9 e
and it would grow each day. By using the store, he said, you can own your songs, burn1 r. d9 K! t: x/ J
them on CDs, be assured of the download quality, get a preview of a song before you0 {7 C& T6 ^' K' ~" l( `# u
download it, and use it with your iMovies and iDVDs to “make the soundtrack of your
' z6 K$ t) i# @+ r, _. Blife.” The price? Just 99 cents, he said, less than a third of what a Starbucks latte cost. Why% D$ g# \1 b: V9 t8 n0 y! |: }4 T
was it worth it? Because to get the right song from Kazaa took about fifteen minutes, rather: ~% L Y2 D2 O
than a minute. By spending an hour of your time to save about four dollars, he calculated,
; h' w$ M: B3 ?+ a' H# w9 p“you’re working for under the minimum wage!” And one more thing . . . “With iTunes, it’s
# N5 W0 M. k2 m/ V$ knot stealing anymore. It’s good karma.”* U8 ^8 g, l3 R; S3 _; `6 U4 T
Clapping the loudest for that line were the heads of the record labels in the front row,( ~ f e% R. J- g2 `7 x
including Doug Morris sitting next to Jimmy Iovine, in his usual baseball cap, and the
% j' h5 u, n& ^0 v5 C# x- ^7 owhole crowd from Warner Music. Eddy Cue, who was in charge of the store, predicted that
2 ^0 t2 m$ a2 B" g! y2 sApple would sell a million songs in six months. Instead the iTunes Store sold a million' e& J! ?4 {* E8 B. V
songs in six days. “This will go down in history as a turning point for the music industry,”
. D0 E* b6 z5 |# y2 D7 JJobs declared.* ]. e! Y5 Z: H4 y. f
5 H0 L% P4 |2 M1 iMicrosoft
5 {" a/ ~; \* v' v
! A* m1 {* J5 q) n“We were smoked.”, C% w2 B5 |6 i! y8 O# P
That was the blunt email sent to four colleagues by Jim Allchin, the Microsoft executive6 K& ]' z' A# D# \0 F: [8 {/ o
in charge of Windows development, at 5 p.m. the day he saw the iTunes Store. It had only; ]5 R+ b! k7 w8 H* K m/ t; c
one other line: “How did they get the music companies to go along?”$ t' u8 E+ O5 j7 ]2 }) P
Later that evening a reply came from David Cole, who was running Microsoft’s online; n( }# q! l1 O, d+ C/ r% u* H
business group. “When Apple brings this to Windows (I assume they won’t make the- o) Q) y8 e( H% ^( D
mistake of not bringing it to Windows), we will really be smoked.” He said that the) l5 p' T+ @( L- i t
Windows team needed “to bring this kind of solution to market,” adding, “That will require ! ~4 v0 U( Q: b" J
2 A# |5 T: r4 W+ M5 z, u
7 J) e+ M6 X( j, n( F0 w8 }3 X2 J. j/ Z+ b1 {& T
7 }7 F n. W) X' y+ ~9 ?: Z' y9 D1 E" ], t3 ^
" X2 Z2 }- F8 b' d( M" Y
9 G3 B+ v: B8 Z5 l& X1 `5 G0 I( p, C* v$ ^
7 `& u. n3 K% C* R2 U3 V
focus and goal alignment around an end-to-end service which delivers direct user value,8 ?# ^$ s/ z3 V
something we don’t have today.” Even though Microsoft had its own Internet service
% {. f' e# o9 ?; B% [) E(MSN), it was not used to providing end-to-end service the way Apple was./ U6 U$ ~7 ?/ A+ m
Bill Gates himself weighed in at 10:46 that night. His subject line, “Apple’s Jobs again,”
0 _. U+ [$ ^8 v( U) f3 C0 Q& @indicated his frustration. “Steve Jobs’s ability to focus in on a few things that count, get9 ^/ r6 Y' x4 l/ B
people who get user interface right, and market things as revolutionary are amazing
4 C) I8 \$ L! b6 qthings,” he said. He too expressed surprise that Jobs had been able to convince the music
3 r/ @# `+ {! g# m+ D9 bcompanies to go along with his store. “This is very strange to me. The music companies’: ^( S( j) i, ?& x& D/ C
own operations offer a service that is truly unfriendly to the user. Somehow they decide to
! ?4 V1 }# S x: G/ ?3 ogive Apple the ability to do something pretty good.”
$ P: `( I% a: C+ u& hGates also found it strange that no one else had created a service that allowed people to0 p- j& w8 k+ h |& w, R; `4 z
buy songs rather than subscribe on a monthly basis. “I am not saying this strangeness
- U8 g# W4 N. P5 v' _+ z( [means we messed up—at least if we did, so did Real and Pressplay and MusicNet and
! o! j# H$ _" x# \. e! @basically everyone else,” he wrote. “Now that Jobs has done it we need to move fast to get
* p& B f8 _( M" Z/ P+ F8 k6 }something where the user interface and Rights are as good. . . . I think we need some plan" g6 D" w' k& `- i1 d9 J; H
to prove that, even though Jobs has us a bit flat footed again, we can move quick and both- H- G$ E" A5 @
match and do stuff better.” It was an astonishing private admission: Microsoft had again/ j7 Z7 o; K8 _0 w' A$ Q0 ?
been caught flat-footed, and it would again try to catch up by copying Apple. But like Sony,4 [) u: x2 p6 K4 M
Microsoft could never make it happen, even after Jobs showed the way.$ s8 R6 T) S3 S. T/ G& X) k' [
Instead Apple continued to smoke Microsoft in the way that Cole had predicted: It ported
) y3 v* _. w3 ~7 t5 _; A+ k: lthe iTunes software and store to Windows. But that took some internal agonizing. First,7 D2 r/ y7 {; |4 N
Jobs and his team had to decide whether they wanted the iPod to work with Windows
s9 p: v$ G, m/ T* M- g1 jcomputers. Jobs was initially opposed. “By keeping the iPod for Mac only, it was driving
7 {, L R1 s: F8 ?the sales of Macs even more than we expected,” he recalled. But lined up against him were
0 y: H& }$ w0 f' n5 n" L: [all four of his top executives: Schiller, Rubinstein, Robbin, and Fadell. It was an argument
% d4 q ~6 |3 S1 H/ S- e9 Rabout what the future of Apple should be. “We felt we should be in the music player: F+ \) |1 i5 U
business, not just in the Mac business,” said Schiller.
% N, P' c! J p7 [/ V! V6 H. mJobs always wanted Apple to create its own unified utopia, a magical walled garden
4 a# p8 K* R9 N" Twhere hardware and software and peripheral devices worked well together to create a great
7 W% D- m6 k v: Uexperience, and where the success of one product drove sales of all the companions. Now, `# }3 V4 \* B# ~* j: e3 e; s. K
he was facing pressure to have his hottest new product work with Windows machines, and
' p2 ^4 H6 X4 C8 }6 x/ |! W* Jit went against his nature. “It was a really big argument for months,” Jobs recalled, “me# f4 r5 P5 b+ ^3 Q
against everyone else.” At one point he declared that Windows users would get to use iPods- l+ \ n3 @% z* N! U9 [" _
“over my dead body.” But still his team kept pushing. “This needs to get to the PC,” said6 n T8 m- G' s+ r( }6 q0 U
Fadell.
; E' Z1 w& [7 U2 JFinally Jobs declared, “Until you can prove to me that it will make business sense, I’m
5 Z- ^6 S% z/ ^; m2 M7 n& B Jnot going to do it.” That was actually his way of backing down. If you put aside emotion
. E7 v7 [, [( Z& ^% k% hand dogma, it was easy to prove that it made business sense to allow Windows users to buy
" e. Y, K" S9 A- g2 [, X1 DiPods. Experts were called in, sales scenarios developed, and everyone concluded this! k3 q; Q3 g; G2 G
would bring in more profits. “We developed a spreadsheet,” said Schiller. “Under all/ l9 C2 V+ p* ^& K
scenarios, there was no amount of cannibalization of Mac sales that would outweigh the
X- R( I5 P& _- o8 \sales of iPods.” Jobs was sometimes willing to surrender, despite his reputation, but he5 @6 ~8 r( j! g% c+ j/ X9 c# x
never won any awards for gracious concession speeches. “Screw it,” he said at one meeting o# t) o' r; X
6 |( F- E& ]8 R
0 F; I) n; G, y+ {0 L
0 o) `$ w/ Z) A3 [6 _
) f8 [9 }: P5 `, v/ G3 K& R. H
$ p2 I6 z: w/ p: o8 v& r3 r6 R+ `/ g( Q1 C& b, S3 ^* l* G* k9 T
( Y( O. T) [4 T# B- [; B2 k2 }) p
+ [, G7 D- T8 G! y
3 m; \. s+ P9 e0 H! mwhere they showed him the analysis. “I’m sick of listening to you assholes. Go do whatever
, ~, q$ B: H! ~+ athe hell you want.”& ~9 `& ~, f f+ b- }
That left another question: When Apple allowed the iPod to be compatible with+ y2 t0 K& {: A& _% E, y' y9 X& _
Windows machines, should it also create a version of iTunes to serve as the music-
" p+ C( Q0 C9 Emanagement software for those Windows users? As usual, Jobs believed the hardware and
# ~5 S1 m1 `: l) X4 p+ `software should go together: The user experience depended on the iPod working in! a' r g8 D8 D" Y
complete sync (so to speak) with iTunes software on the computer. Schiller was opposed. “I2 h" H0 I% a3 v- X/ I2 T2 c
thought that was crazy, since we don’t make Windows software,” Schiller recalled. “But4 g5 ~7 m0 R7 [" z( j5 Z
Steve kept arguing, ‘If we’re going to do it, we should do it right.’”
' b$ t8 Y; n( j1 zSchiller prevailed at first. Apple decided to allow the iPod to work with Windows by
: T2 s8 G) a# B# V, p" n/ ousing software from MusicMatch, an outside company. But the software was so clunky that
" V* \+ |* S( x7 Kit proved Jobs’s point, and Apple embarked on a fast-track effort to produce iTunes for- }9 Q' [4 k$ J
Windows. Jobs recalled:3 I# t- m4 Y! @9 J0 [
, Z# o) U- J9 s4 Y+ {
To make the iPod work on PCs, we initially partnered with another company that had a( ^4 R$ f. I5 o7 K$ ~5 M
jukebox, gave them the secret sauce to connect to the iPod, and they did a crappy job. That
) S3 K8 F2 a' F; ewas the worst of all worlds, because this other company was controlling a big piece of the: t5 K4 D) j: ]% A4 K" o O1 e, D) b
user experience. So we lived with this crappy outside jukebox for about six months, and
`5 g1 U% ~2 Z" {; ]2 vthen we finally got iTunes written for Windows. In the end, you just don’t want someone
0 G2 m$ _3 F8 e; n4 ~ Relse to control a big part of the user experience. People may disagree with me, but I am
7 S# N. t9 J6 l3 Dpretty consistent about that.
* r% y, N% [4 g2 m6 V& | f' }
Porting iTunes to Windows meant going back to all of the music companies—which had, R5 d8 Y9 E+ r2 i8 _$ j
made deals to be in iTunes based on the assurance that it would be for only the small0 `, v: C0 n! q+ y& N
universe of Macintosh users—and negotiate again. Sony was especially resistant. Andy' x% J- [' _& {* }# N
Lack thought it another example of Jobs changing the terms after a deal was done. It was.- `, {0 F4 H7 b8 I W+ K/ w8 b
But by then the other labels were happy about how the iTunes Store was working and went5 a9 n2 Z! |* A) }9 A
along, so Sony was forced to capitulate.% w* T1 c& d3 g) P/ T) q6 o
Jobs announced the launch of iTunes for Windows in October 2003. “Here’s a feature
# p; `: G( h- a; d& K Tthat people thought we’d never add until this happened,” he said, waving his hand at the
3 @( m# T3 s }% agiant screen behind him. “Hell froze over,” proclaimed the slide. The show included iChat3 o. Z; P6 {) n/ u ~
appearances and videos from Mick Jagger, Dr. Dre, and Bono. “It’s a very cool thing for/ i9 e/ X0 u2 d8 n
musicians and music,” Bono said of the iPod and iTunes. “That’s why I’m here to kiss the
0 K3 F0 A" ~3 Dcorporate ass. I don’t kiss everybody’s.”! C/ K# Y- M- u5 h. b" \$ _
Jobs was never prone to understatement. To the cheers of the crowd, he declared,
4 t; P7 ?$ X3 t% Q2 |6 o7 _9 n, B“iTunes for Windows is probably the best Windows app ever written.”% C6 t) |' h7 y$ v6 y
% k2 I% H3 o& C& p" U" I! A" M1 l* EMicrosoft was not grateful. “They’re pursuing the same strategy that they pursued in the" I, ^* V# @( b$ Q1 D
PC business, controlling both the hardware and software,” Bill Gates told Business Week.
, C Z+ X5 l. H- I+ ^9 ~9 V5 X9 ]“We’ve always done things a little bit differently than Apple in terms of giving people8 i& c2 c( N- b9 L
choice.” It was not until three years later, in November 2006, that Microsoft was finally
k; ]; I' q# S: m" p0 k) qable to release its own answer to the iPod. It was called the Zune, and it looked like an ; n% ]' b* T9 S8 k% n7 C
4 j8 i( s2 s% e, X/ f
9 X+ {/ }" k& r1 p3 ^+ Q h
1 K" W% D4 S3 Z; I3 W2 @0 Y
" j0 d7 S# }9 o9 T, O
+ T8 ?* V) Q5 w ?* h
1 r0 o3 L; s3 x, m5 u6 @8 ?! }3 V! C9 z% Y6 W
1 [! p2 _) `6 A0 F2 E* l) D& W
, o% R. y1 [3 W+ G
iPod, though a bit clunkier. Two years later it had achieved a market share of less than 5%.
# L" _% b0 ]6 D1 z. iJobs was brutal about the cause of the Zune’s uninspired design and market weakness:. G. z0 D& q3 o, l
4 M7 E& d" u/ w( U. eThe older I get, the more I see how much motivations matter. The Zune was crappy
) v. D/ ^6 Z0 R: p! {! y2 ^# nbecause the people at Microsoft don’t really love music or art the way we do. We won
! T, F; V& m" A# l$ `because we personally love music. We made the iPod for ourselves, and when you’re doing8 X3 V- B; J4 I/ [6 B0 _
something for yourself, or your best friend or family, you’re not going to cheese out. If you
, o: p3 E$ z5 O A6 x1 sdon’t love something, you’re not going to go the extra mile, work the extra weekend,
7 k1 X* B) T! v; I6 {% v" ~8 gchallenge the status quo as much.
' N4 A+ I% e4 A9 [, p
! g* Q( I9 G/ F2 U: j! t1 w3 r. s8 w# N- U$ l' p2 k
Mr. Tambourine Man( w" d) _) _+ P3 N1 ~: a6 q
5 N6 b% p9 w1 D& b n' r
Andy Lack’s first annual meeting at Sony was in April 2003, the same week that Apple
1 f, |) z p" d0 R: k) Z }launched the iTunes Store. He had been made head of the music division four months
0 `3 f) r0 J3 b0 e- Hearlier, and had spent much of that time negotiating with Jobs. In fact he arrived in Tokyo8 R z0 ]- k2 w4 s
directly from Cupertino, carrying the latest version of the iPod and a description of the
. N+ N# n# ]& ?) Y% w* qiTunes Store. In front of the two hundred managers gathered, he pulled the iPod out of his
9 n! Q0 Z; f' [; c/ P+ Hpocket. “Here it is,” he said as CEO Nobuyuki Idei and Sony’s North America head
9 N; X0 A3 ?2 ]& _% q" W7 @Howard Stringer looked on. “Here’s the Walkman killer. There’s no mystery meat. The
- U7 s6 b L) k9 mreason you bought a music company is so that you could be the one to make a device like3 I8 N% g1 V' w0 r5 ?. G
this. You can do better.”
- I7 I) i# J3 d pBut Sony couldn’t. It had pioneered portable music with the Walkman, it had a great
9 I9 _2 ?( K+ E& g/ rrecord company, and it had a long history of making beautiful consumer devices. It had all' o c, k" m1 a0 {( @
of the assets to compete with Jobs’s strategy of integration of hardware, software, devices,* |( Q9 s' W% |$ \( n' J
and content sales. Why did it fail? Partly because it was a company, like AOL Time Warner,* t1 ?. l L$ o, X4 |+ [
that was organized into divisions (that word itself was ominous) with their own bottom5 _- [8 z0 u! \1 r. Y" S" v [- h, b
lines; the goal of achieving synergy in such companies by prodding the divisions to work
8 j; w) M0 U. N" M. h% B* G3 Z0 w# Ptogether was usually elusive.
7 S3 o* B, r/ j* W' I, J$ ZJobs did not organize Apple into semiautonomous divisions; he closely controlled all of$ Z/ |- d6 |8 ^% I: Y. \+ ]
his teams and pushed them to work as one cohesive and flexible company, with one profit-
. Q6 X2 `' ^6 d, band-loss bottom line. “We don’t have ‘divisions’ with their own P&L,” said Tim Cook. “We. ?5 _. U: P! C3 R; p$ {) k
run one P&L for the company.”0 Q* p, |: J4 ^/ P, p- v
In addition, like many companies, Sony worried about cannibalization. If it built a music& Y7 c( ^, W% K1 B) U. h6 U" G/ f
player and service that made it easy for people to share digital songs, that might hurt sales
6 r) p7 \" y& g! _8 O! S1 J' S# nof its record division. One of Jobs’s business rules was to never be afraid of cannibalizing
* |7 A/ Q& ^' tyourself. “If you don’t cannibalize yourself, someone else will,” he said. So even though an' K( i* S- { b
iPhone might cannibalize sales of an iPod, or an iPad might cannibalize sales of a laptop,; U: Q2 e2 r/ ~
that did not deter him.
j4 ?( a" C) e# F E( ]* LThat July, Sony appointed a veteran of the music industry, Jay Samit, to create its own
. X: ]5 q. K" C* `( F6 W& y8 {iTunes-like service, called Sony Connect, which would sell songs online and allow them to, i( I; l9 _2 v5 a: x4 i
play on Sony’s portable music devices. “The move was immediately understood as a way
' j* p( U/ r& C1 N7 o9 g% Bto unite the sometimes conflicting electronics and content divisions,” the New York Times " a+ ^% ~4 m, d p8 w n; A% ^* X' Z2 Y
0 p, N0 u( B, x% O1 m
8 D, c& M5 {/ q& S: h( P
6 b/ P" {% b U
0 N- K! N- B8 C0 H
- ]+ S- M8 Z/ O9 \
- c3 u9 B! O7 ]5 _: w( y( I6 x0 K- O4 X; W) S6 l
5 @* b! c) E9 w4 ], ~% _
$ ?4 F! _3 A, v! c" z4 Z* a$ G4 ereported. “That internal battle was seen by many as the reason Sony, the inventor of the
6 ^$ H9 k5 I2 c: I! MWalkman and the biggest player in the portable audio market, was being trounced by
, a, h1 z J4 U. J) h4 y. BApple.” Sony Connect launched in May 2004. It lasted just over three years before Sony- \6 G f2 g& r: z# n9 ^
shut it down.3 W4 ^9 q/ H9 v- \
/ h ^! \4 E" x8 U
Microsoft was willing to license its Windows Media software and digital rights format to3 k8 P0 U5 }; c9 \8 ^+ D
other companies, just as it had licensed out its operating system in the 1980s. Jobs, on the2 p0 y$ S4 n$ \; l, i
other hand, would not license out Apple’s FairPlay to other device makers; it worked only8 J4 n* {! L5 K6 ~' F
on an iPod. Nor would he allow other online stores to sell songs for use on iPods. A variety
$ @# A2 ^8 `" e/ d3 Eof experts said this would eventually cause Apple to lose market share, as it did in the
7 C, {1 C3 B2 D! P1 T, C3 hcomputer wars of the 1980s. “If Apple continues to rely on a proprietary architecture,” the1 ]& O+ u0 f1 u/ x; w5 i6 F9 T! Z. h0 \
Harvard Business School professor Clayton Christensen told Wired, “the iPod will likely9 D! p# Z8 i% _4 ^
become a niche product.” (Other than in this case, Christensen was one of the world’s most" d. A: h: P x, Z8 }4 O
insightful business analysts, and Jobs was deeply influenced by his book The Innovator’s* P5 B& \. \2 P8 `+ \. e: v$ m
Dilemma.) Bill Gates made the same argument. “There’s nothing unique about music,” he& v t9 Y! ?" u0 H; v @( a1 \
said. “This story has played out on the PC.”
1 s7 j2 m u# m2 kRob Glaser, the founder of RealNetworks, tried to circumvent Apple’s restrictions in July3 ?* H$ C4 B- V
2004 with a service called Harmony. He had attempted to convince Jobs to license Apple’s f1 ?( Y4 `' W: z! S, p9 w
FairPlay format to Harmony, but when that didn’t happen, Glaser just reverse-engineered it, u% F0 b* S2 \ c: O' }. c
and used it with the songs that Harmony sold. Glaser’s strategy was that the songs sold by) H& }$ ^/ u, E' c! K
Harmony would play on any device, including an iPod or a Zune or a Rio, and he launched
: f7 v! \ Z$ x) j1 la marketing campaign with the slogan “Freedom of Choice.” Jobs was furious and issued a
/ [0 }% J r$ R( Mrelease saying that Apple was “stunned that RealNetworks has adopted the tactics and1 x" K% _3 d8 e* n4 D" \$ q, C# g
ethics of a hacker to break into the iPod.” RealNetworks responded by launching an4 `/ l5 p" E& e5 H
Internet petition that demanded “Hey Apple! Don’t break my iPod.” Jobs kept quiet for a* L$ I- f" Q2 ~. `
few months, but in October he released a new version of the iPod software that caused0 r5 r: L8 G, a' G; Q
songs bought through Harmony to become inoperable. “Steve is a one-of-a-kind guy,”; C, t( |: a. ?5 j. [
Glaser said. “You know that about him when you do business with him.”& H1 `( R( [, E4 T2 p& O
In the meantime Jobs and his team—Rubinstein, Fadell, Robbin, Ive—were able to keep/ }3 ?7 ^4 H" w' ]
coming up with new versions of the iPod that extended Apple’s lead. The first major/ P" X! c. m5 L, `" a1 r! ?
revision, announced in January 2004, was the iPod Mini. Far smaller than the original iPod; A) z( K4 @& e# a$ |
—just the size of a business card—it had less capacity and was about the same price. At
0 f& n- a/ D; c7 v7 Kone point Jobs decided to kill it, not seeing why anyone would want to pay the same for
3 a2 P3 \" h1 |" a- X1 Jless. “He doesn’t do sports, so he didn’t relate to how it would be great on a run or in the
& I; a& [% h8 ?+ N& z" Ygym,” said Fadell. In fact the Mini was what truly launched the iPod to market dominance,
$ f2 {) z! e( Z2 xby eliminating the competition from smaller flash-drive players. In the eighteen months, [7 C7 T" m- m* w% [
after it was introduced, Apple’s market share in the portable music player market shot from
/ k+ f- {0 O, T9 I G, x" R4 j* Q31% to 74%.
8 I X; l3 E$ K. H2 O5 |, @The iPod Shuffle, introduced in January 2005, was even more revolutionary. Jobs
6 f: P& d- _; y* P7 jlearned that the shuffle feature on the iPod, which played songs in random order, had
3 b( ]7 |2 m$ g1 c0 O/ S( |" Qbecome very popular. People liked to be surprised, and they were also too lazy to keep" P3 U4 o( C) E! p
setting up and revising their playlists. Some users even became obsessed with figuring out0 q- b5 P: O) F7 A
whether the song selection was truly random, and if so, why their iPod kept coming back
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( `5 _! M, E# o" I# V7 L6 ato, say, the Neville Brothers. That feature led to the iPod Shuffle. As Rubinstein and Fadell
; \4 h0 q% ^# I2 ?3 {/ G2 ewere working on creating a flash player that was small and inexpensive, they kept doing9 ]! |: F" U7 W% I- `( L
things like making the screen tinier. At one point Jobs came in with a crazy suggestion: Get, \3 r; Q7 X4 t5 u+ V6 k
rid of the screen altogether. “What?!?” Fadell responded. “Just get rid of it,” Jobs insisted.
. q2 Q2 M0 r6 ~; ~- }* @3 V9 MFadell asked how users would navigate the songs. Jobs’s insight was that you wouldn’t' {6 n: a) ] \* l
need to navigate; the songs would play randomly. After all, they were songs you had
% O/ x9 }" F6 f/ e9 @2 W( ?chosen. All that was needed was a button to skip over a song if you weren’t in the mood for4 w) ?- s, c: e, |
it. “Embrace uncertainty,” the ads read.
! P3 h% f! m- w4 ZAs competitors stumbled and Apple continued to innovate, music became a larger part of
2 A! x3 E6 o2 A. B/ B2 ~ S) D) kApple’s business. In January 2007 iPod sales were half of Apple’s revenues. The device n" w; w" E2 C$ {/ s5 R) u
also added luster to the Apple brand. But an even bigger success was the iTunes Store.2 q+ f& U& d* P/ ~& w) D
Having sold one million songs in the first six days after it was introduced in April 2003, the7 T! z* [/ [. E1 ~, O3 @1 `1 n$ j
store went on to sell seventy million songs in its first year. In February 2006 the store sold
3 N. [% \& E) O+ q" Lits one billionth song when Alex Ostrovsky, sixteen, of West Bloomfield, Michigan, bought7 M6 E# {2 w: \ J i# ^4 t
Coldplay’s “Speed of Sound” and got a congratulatory call from Jobs, bestowing upon him) q# ]6 C4 l1 s
ten iPods, an iMac, and a $10,000 music gift certificate.' m3 v2 f9 C$ Z" Y ^* _1 n n
The success of the iTunes Store also had a more subtle benefit. By 2011 an important; a. Z" d" E" `( n8 ^
new business had emerged: being the service that people trusted with their online identity
& e' \: ^. `. @" x( ]+ Cand payment information. Along with Amazon, Visa, PayPal, American Express, and a few
% v/ |! F1 u7 @7 s! Y- mother services, Apple had built up databases of people who trusted them with their email
& ]2 k( E. b5 T. K1 m: B8 U' S- oaddress and credit card information to facilitate safe and easy shopping. This allowed2 z$ S3 M! k/ n7 b, @
Apple to sell, for example, a magazine subscription through its online store; when that7 W0 t8 M$ b6 r+ m5 c2 x! f |
happened, Apple, not the magazine publisher, would have a direct relationship with the
+ E9 }, F. u; I2 t6 u, O. rsubscriber. As the iTunes Store sold videos, apps, and subscriptions, it built up a database" @& p l" }# |2 P; e; V
of 225 million active users by June 2011, which positioned Apple for the next age of digital
! _# V# b* |) `3 p7 ccommerce.
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( Q2 t% Y( [" k! \) D f
0 N1 J( T) U. v |' n) R1 eCHAPTER THIRTY-TWO
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) Z& D( y9 C9 s6 ^
) p* \5 D; G! W+ F& \+ [MUSIC MAN
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$ F0 i/ r9 V0 }# i% C- u& K3 v3 E- M9 z0 Y
The Sound Track of His Life
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! ^7 I' x( w; b3 |3 d# c9 c% KJimmy Iovine, Bono, Jobs, and The Edge, 2004' w: }7 I; V: I7 K: Y5 ?
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' h+ V# Y8 J2 O" ?8 O) m4 R4 mOn His iPod
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As the iPod phenomenon grew, it spawned a question that was asked of presidential
$ C! E2 J; l( x/ {candidates, B-list celebrities, first dates, the queen of England, and just about anyone else, U6 z3 d5 ]" _) s& z
with white earbuds: “What’s on your iPod?” The parlor game took off when Elisabeth
x% y$ G+ w" b9 UBumiller wrote a piece in the New York Times in early 2005 dissecting the answer that
3 A* t7 T2 F0 [% d7 mPresident George W. Bush gave when she asked him that question. “Bush’s iPod is heavy' H5 r) ]4 p. L! G% U" W
on traditional country singers,” she reported. “He has selections by Van Morrison, whose
+ h+ v6 X0 u6 j7 V R4 O‘Brown Eyed Girl’ is a Bush favorite, and by John Fogerty, most predictably ‘Centerfield.’”
# @. G6 \" x% B3 A; C, vShe got a Rolling Stone editor, Joe Levy, to analyze the selection, and he commented, “One
/ y' o9 e& D7 Ething that’s interesting is that the president likes artists who don’t like him.”
) [( G6 m. z) @6 Q“Simply handing over your iPod to a friend, your blind date, or the total stranger sitting
! Y0 _5 f' d; V) lnext to you on the plane opens you up like a book,” Steven Levy wrote in The Perfect' t* n% s. o% S; T+ A& D
Thing. “All somebody needs to do is scroll through your library on that click wheel, and, {1 K; D; m/ x" @: U0 E& B
musically speaking, you’re naked. It’s not just what you like—it’s who you are.” So one
: h$ D3 }3 Y. w8 ^day, when we were sitting in his living room listening to music, I asked Jobs to let me see: H7 D, X6 `/ z ?2 o; _6 z$ _
his. As we sat there, he flicked through his favorite songs.
4 q* G w: t* t: U$ U& q* o2 ?Not surprisingly, there were all six volumes of Dylan’s bootleg series, including the
: N% L3 C* u7 }9 [tracks Jobs had first started worshipping when he and Wozniak were able to score them on
& s; o: r7 n$ freel-to-reel tapes years before the series was officially released. In addition, there were
& ]5 q, B' r; \2 D @fifteen other Dylan albums, starting with his first, Bob Dylan (1962), but going only up to
1 Y9 Y( u6 x2 F5 z* WOh Mercy (1989). Jobs had spent a lot of time arguing with Andy Hertzfeld and others that7 m% L5 R8 |1 B, I- E
Dylan’s subsequent albums, indeed any of his albums after Blood on the Tracks (1975),
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; c8 G) I- n7 K$ G9 w/ j4 b% B9 u2 vwere not as powerful as his early performances. The one exception he made was Dylan’s
/ W% U" k6 P" R, E9 Atrack “Things Have Changed” from the 2000 movie Wonder Boys. Notably his iPod did not
1 [. _ R) X8 Q, H+ U- x. `include Empire Burlesque (1985), the album that Hertzfeld had brought him the weekend
# P0 R5 S. a9 \6 y+ ihe was ousted from Apple.
3 b$ c2 h6 J# q2 z9 a7 VThe other great trove on his iPod was the Beatles. He included songs from seven of their
; _- f3 |1 U! x5 ]. T4 Valbums: A Hard Day’s Night, Abbey Road, Help!, Let It Be, Magical Mystery Tour, Meet the. g# D2 A3 `8 w; x% N0 p
Beatles! and Sgt. Pepper’s Lonely Hearts Club Band. The solo albums missed the cut. The, q7 g+ K4 a( A j. q. D) u
Rolling Stones clocked in next, with six albums: Emotional Rescue, Flashpoint, Jump! O9 m1 u5 X. S
Back, Some Girls, Sticky Fingers, and Tattoo You. In the case of the Dylan and the Beatles
; U$ Q% E0 Z$ _( I6 nalbums, most were included in their entirety. But true to his belief that albums can and ~# l9 z+ D1 `1 u! I0 Q |
should be disaggregated, those of the Stones and most other artists on his iPod included
" } D, e- F0 `1 aonly three or four cuts. His onetime girlfriend Joan Baez was amply represented by
7 Y! x+ _5 `( x! M' vselections from four albums, including two different versions of “Love Is Just a Four-Letter8 D* M% u7 O2 y) J
Word.”% c: N" P* C/ S2 o- @9 K Y5 V5 b
His iPod selections were those of a kid from the seventies with his heart in the sixties.$ R9 p, a7 C0 n1 R" d+ C; b
There were Aretha, B. B. King, Buddy Holly, Buffalo Springfield, Don McLean, Donovan,
$ ]" s2 r. U* ^' w' W( l8 p& Gthe Doors, Janis Joplin, Jefferson Airplane, Jimi Hendrix, Johnny Cash, John Mellencamp,
' b, |8 G* u z. iSimon and Garfunkel, and even The Monkees (“I’m a Believer”) and Sam the Sham, @7 T" Y, c' v* x
(“Wooly Bully”). Only about a quarter of the songs were from more contemporary artists,
/ y% j0 m' v \3 d: Rsuch as 10,000 Maniacs, Alicia Keys, Black Eyed Peas, Coldplay, Dido, Green Day, John7 S+ ^2 q; n O+ t9 d5 O
Mayer (a friend of both his and Apple), Moby (likewise), U2, Seal, and Talking Heads. As
0 N$ r% V# c2 `0 ffor classical music, there were a few recordings of Bach, including the Brandenburg
: t/ v9 R7 \, j" ?, I5 W ZConcertos, and three albums by Yo-Yo Ma.9 z9 y, U# B* A$ x
Jobs told Sheryl Crow in May 2003 that he was downloading some Eminem tracks," H' d& A- r- L. x" ^ k( P
admitting, “He’s starting to grow on me.” James Vincent subsequently took him to an
: T- C: \ l H8 o8 r4 V! jEminem concert. Even so, the rapper missed making it onto Jobs’s iPod. As Jobs said to
" f) b2 ?2 D1 s3 ~$ ~/ o# WVincent after the concert, “I don’t know . . .” He later told me, “I respect Eminem as an
# M) S+ F0 A" i" t! wartist, but I just don’t want to listen to his music, and I can’t relate to his values the way I& Z6 t- q7 M. ?" ?
can to Dylan’s.”) p6 F& ~+ {) a) N: _8 z; e' S3 Q: V
His favorites did not change over the years. When the iPad 2 came out in March 2011, he
c' s; L7 S3 N% _4 T1 l; {6 i s, ~transferred his favorite music to it. One afternoon we sat in his living room as he scrolled
& K/ P% h) k* L/ `, y; R- tthrough the songs on his new iPad and, with a mellow nostalgia, tapped on ones he wanted5 h6 N, E6 r# d: P
to hear., ?* l, J8 X* n2 u% ^: f) k
We went through the usual Dylan and Beatles favorites, then he became more reflective0 T- T* L' H0 `0 U2 {
and tapped on a Gregorian chant, “Spiritus Domini,” performed by Benedictine monks. For- O5 B0 r* c1 M" G5 e
a minute or so he zoned out, almost in a trance. “That’s really beautiful,” he murmured. He
( V% U8 a5 p3 ]) t+ `9 q- Y+ Ofollowed with Bach’s Second Brandenburg Concerto and a fugue from The Well-Tempered
- p' S. E" ^1 {3 |! CClavier. Bach, he declared, was his favorite classical composer. He was particularly fond of
8 X' i! @3 l; m( p! j1 Dlistening to the contrasts between the two versions of the “Goldberg Variations” that Glenn
+ ]$ l4 a+ g& i# \; Y& uGould recorded, the first in 1955 as a twenty-two-year-old little-known pianist and the( r# q- o8 Q* j% Q' C
second in 1981, a year before he died. “They’re like night and day,” Jobs said after playing6 h) U7 O- v6 ^. M4 I2 T
them sequentially one afternoon. “The first is an exuberant, young, brilliant piece, played9 A s' f% ?5 ^0 z) z
so fast it’s a revelation. The later one is so much more spare and stark. You sense a very
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2 b% d" b4 G K# p. w! qdeep soul who’s been through a lot in life. It’s deeper and wiser.” Jobs was on his third2 E* Q* |& Q: k2 V6 L
medical leave that afternoon when he played both versions, and I asked which he liked0 z ?" ~' ]9 k0 n
better. “Gould liked the later version much better,” he said. “I used to like the earlier,
" H/ D6 ?% R# R8 Sexuberant one. But now I can see where he was coming from.”% J2 k. ^5 ?1 n2 k f6 C8 ?$ h6 u
He then jumped from the sublime to the sixties: Donovan’s “Catch the Wind.” When he; w% r) o' Z9 e1 k% p( G0 v
noticed me look askance, he protested, “Donovan did some really good stuff, really.” He
8 J2 v! C" x D& K/ Xpunched up “Mellow Yellow,” and then admitted that perhaps it was not the best example.! [7 |; a0 T. }) r9 X
“It sounded better when we were young.”6 Z* u9 d" y4 N- U- x* S
I asked what music from our childhood actually held up well these days. He scrolled
5 O& q7 g& `! }+ n% Idown the list on his iPad and called up the Grateful Dead’s 1969 song “Uncle John’s5 |0 C0 R4 Q$ \
Band.” He nodded along with the lyrics: “When life looks like Easy Street, there is danger
* k k* R0 H% D# p' d& H& f4 p1 Jat your door.” For a moment we were back at that tumultuous time when the mellowness of4 m% Z# N$ G8 r% _9 ]2 D
the sixties was ending in discord. “Whoa, oh, what I want to know is, are you kind?”
0 q* ]2 U- Y' G3 W* _! V, sThen he turned to Joni Mitchell. “She had a kid she put up for adoption,” he said. “This
N: M' Z4 |4 B2 m) U8 P5 F% psong is about her little girl.” He tapped on “Little Green,” and we listened to the mournful$ ~# V: M' [/ n9 @/ y5 i
melody and lyrics that describe the feelings of a mother who gives up a child. “So you sign* H0 L8 Q7 \/ O0 b! M$ l$ a+ v
all the papers in the family name / You’re sad and you’re sorry, but you’re not ashamed.” I1 Q* V$ N! N9 ?( T
asked whether he still often thought about being put up for adoption. “No, not much,” he3 r9 R( d: m1 ~. l8 z
said. “Not too often.”
/ R" G2 U4 | C7 LThese days, he said, he thought more about getting older than about his birth. That led& F9 N: a: s1 [! |% t
him to play Joni Mitchell’s greatest song, “Both Sides Now,” with its lyrics about being4 }( {; o2 b3 r, k" D* \" h) j. j
older and wiser: “I’ve looked at life from both sides now, / From win and lose, and still8 M3 P, R, \2 O* b+ L" Z
somehow, / It’s life’s illusions I recall, / I really don’t know life at all.” As Glenn Gould had% S, Z& S, C" J7 b) r
done with Bach’s “Goldberg Variations,” Mitchell had recorded “Both Sides Now” many
1 ]) {; j1 f! n5 s; g1 n8 }years apart, first in 1969 and then in an excruciatingly haunting slow version in 2000. He
" B1 Y% Q5 }- \* a2 Dplayed the latter. “It’s interesting how people age,” he noted.3 j$ H0 N* i7 S& P! y: z4 p
Some people, he added, don’t age well even when they are young. I asked who he had in
. Q2 ~/ A9 ?; G/ B8 Qmind. “John Mayer is one of the best guitar players who’s ever lived, and I’m just afraid8 {! w% d. U n9 }; b
he’s blowing it big time,” Jobs replied. Jobs liked Mayer and occasionally had him over for$ d. E: h% z/ {( h
dinner in Palo Alto. When he was twenty-seven, Mayer appeared at the January 2004' \! V! a6 M4 y
Macworld, where Jobs introduced GarageBand, and he became a fixture at the event most
6 i6 G9 S. j' Nyears. Jobs punched up Mayer’s hit “Gravity.” The lyrics are about a guy filled with love
3 ]8 g7 u( v1 A3 I' fwho inexplicably dreams of ways to throw it away: “Gravity is working against me, / And
" S) }9 }' x, A% U( Xgravity wants to bring me down.” Jobs shook his head and commented, “I think he’s a, E, a( `' P0 A6 T. D2 K( f
really good kid underneath, but he’s just been out of control.”, X4 z9 p9 ^( @% i
At the end of the listening session, I asked him a well-worn question: the Beatles or the
! ~& O) i( F% p1 E$ @5 Q4 [, { NStones? “If the vault was on fire and I could grab only one set of master tapes, I would grab
0 D$ L- U& @' P+ W( o* U7 Ithe Beatles,” he answered. “The hard one would be between the Beatles and Dylan.
9 v" [: M5 z: H( g7 ZSomebody else could have replicated the Stones. No one could have been Dylan or the
0 i" A I3 i4 j% `Beatles.” As he was ruminating about how fortunate we were to have all of them when we
8 k; u2 _; L3 |0 rwere growing up, his son, then eighteen, came in the room. “Reed doesn’t understand,”4 q3 H% E5 L8 V7 Z# ~" R. D! S
Jobs lamented. Or perhaps he did. He was wearing a Joan Baez T-shirt, with the words# h" j! U5 e: H: w3 n# ^
“Forever Young” on it. v0 x' h1 V3 M! G- l9 g; F- |3 D8 ~
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