A candid talk with Apple's CEO on a landmark day in its history.
Steve Jobs announces the iTunes Music Store.
On April 28th, 2003, moments before I was about to interview Steve Jobs at San Francisco’s Moscone Center, I was jittery. Anticipation? Nerves? Excitement? You bet. All of those visceral emotions were firing. Knowing Jobs’ storied reputation as an irascible and exacting Silicon Valley CEO had me on edge. But I had prepared a tight set of questions. Secretly, I was hoping he might enjoy the line of inquiry. In turn, I would have a lively and candid report for my editors at TIME.
What I didn’t know was that the interview was taking place on what
would turn out to be one of the most important days in Apple’s
history: The launch of the iTunes Music Store.
Once again, Steve Jobs had done the impossible. This time he had orchestrated a historic deal with recording artists and the major labels, permitting music to be legally sold and downloaded over the Internet. After spending more than tens of millions of dollars developing the back-end infrastructure–digital jukebox, store, indexing and payment system–Apple had created the first acceptable alternative to “free” unauthorized file-sharing services like Kazaa, which at the time accounted for some 200 million illegal downloads worldwide.
The landmark agreement came not a moment too soon. The mainstream music industry was desperate to stem the bleeding from lost sales. Artists wanted to be paid for their work. Consumers just wanted easy access to the world of music.
“People don’t want to steal music,” the English soul singer Seal told me at the launch event. “The whole process of downloading music is convoluted, time consuming. And people do it because there’s no viable alternative. And now there is.”
On launch day, the iTunes Music Store had only 200,000 tracks, and the store–and the iPod–only worked with Macs. Today, Apple is the number one music retailer in the United States, and its storefronts for movies, TV shows, and apps–all descendants of the music store–are hugely successful.
Looking back, it’s almost silly to recall the intensity of skeptics back in 2003 questioning whether legal music could catch up to the pace of free and illicit Internet files. When I spoke with Jobs, even he expressed uncertainty whether consumers would convert en masse to paying via the iTunes Music Store. Sixteen billion downloaded songs later, we know the answer.
So here it is for the first time: My iTunes Music Store interview with Steve Jobs, in its entirety and verbatim.
LAURA LOCKE: “Rip. Mix. Burn.” [a tagline from Apple advertising of the time] has been Apple’s mantra as of late. Why go legit now?
STEVE JOBS: “Rip. Mix. Burn.” was never not legit.
When some folks thought “Rip. Mix. Burn.” was an anthem to steal music, it was just because they didn’t know what they were talking about. They obviously didn’t have any kids living at home. This was the 50 year-old-crowd that thought that.
We’ve been against stealing music since the beginning. We own a lot of intellectual property. Most of competitors don’t, but we do. We’re not happy when people steal. So, this is not an about face for us, or anything like that. We’ve been consistent from the beginning. “Rip. Mix. Burn.” never meant go steal music—it meant rip, mix, burn—exactly what it said.
Any regrets or remorse about how the tagline “Rip. Mix. Burn.” may have been misinterpreted?
No, not really, it certainly got people thinking about Apple and music I guess. It was frustrating at times when people didn’t know what it meant, but everyone under 30 knew what it meant, so that was probably what really counted.
How do you think Apple’s new music service will change the digital music landscape?
With the introduction of the new iTunes Music Store we’ve now built the first real complete ecosystem for the digital music age.
We’ve got a way to buy music online legally that’s fantastic—it’s better than any other way to acquire music. We’ve got a way to manage music with the iTunes Jukebox, which is the best in the world. And we’ve got a way to listen to music on the go with the iPod—which is the most popular MP3 player in the world—and the coolest, one of the coolest things in the world. So we’ve really got, from one end to another, a complete solution for digital music. We’re the only people in the world to do this, so we feel great about it.
Do you think you’ll be able to sway the tens of millions who use the unauthorized services?
Well, I don’t know. We’ll find out. But this is really a far better experience. Not only do the downloads not crap out half way through, and not only is it perfectly encoded—instead of having the last four seconds cut off—but offering previews of every song in the store is just giant, it’s giant. Just click a button and you’re hearing a preview. It’s really cool. And it allows you to explore music in a way that no download service has ever done to date. And the ability to browse—you can’t do that with Kazaa, you can’t do any of this stuff with Kazaa, the experience is so much better than Kazaa, I think a lot of people don’t want to spend 15 minutes downloading a song and getting a less than perfect quality song when they’re all done, and without a preview, finding out it’s the wrong song by the time they’re done.
What about subscription services?
Well, they’ve failed. They’ve completely failed. Nobody wants to rent their music. They have hardly any subscribers.
Any projected usage stats on iTunes Music Store you can share?
You know, we have some internally. But who knows? We have no idea. I’m waiting for some data today, actually. We were swamped earlier, so I heard.
Some detractors like those at Listen.com say that downloading isn’t the most popular feature on their music service Rhapsody. What’s your response?
Well, that’s correct. Downloading sucks on their service. You download a track and you can’t burn it to a CD without paying them more money—you can’t put it on your MP3 player, you can’t put it on multiple computers—it sucks! So of course nobody downloads! You pay extra to download even on top of subscription fees. No wonder they have hardly any download traffic—[they] hardly even have any subscribers.
The Wall Street Journal recently fashioned you as a “digital music impresario,” how do you feel about that?
I didn’t know what it meant. Does that mean I run a carnival? What we do at Apple is very simple: we invent stuff. We make the best personal computers in the world, some of the best software, the best portable MP3/music player, and now we make the best online music store in the world. We just make stuff. So I don’t know what impresario means. We make stuff, put it out there, and people use it.
Clearly, we’ve been leading the revolution. The personal computer is changing—it’s changing into this digital hub for a digital lifestyle—so we’ve been leading that change, we’re not followers, we’ve lead that charge. Digital moviemaking, DVD burning, digital photography, and of course, digital music. So we are in the forefront.
What’s next?
I think what’s next for me is getting a good night’s sleep… I don’t know… We have all sorts [of things] that we work on, but we never really talk about what’s next until we’re ready…
Can you say anything about the Music Store’s development costs or Apple’s investment?
Well, we don’t usually talk about that, but all I would say is that… you know I had somebody comment today, “Well, now that you have introduced your store, do you expect a lot others?” And I guess our answer is no. This is really hard. Just to create an infrastructure to pump oceans of bits out in the world, you know, we’ve done that over the last several years with movie trailers and stuff, and that’s tens of millions of dollars for server farms and networking farms – it’s huge – and we’ve already got that in place, and say you want to have millions of transactions, and our online store is all tied into SAP and auditors bless it, and to do that, that’s tens of millions of dollars, and we have one-click shopping, and only us and Amazon have that, and then to make a jukebox, if you don’t a popular jukebox, how much does it cost to make iTunes and make it popular? A lot! But we’ve got that.
And then iPod, if you want to make an iPod, what does that cost? Well, nobody has done it but us, people have tried, but they haven’t even come close. That’s a lot of money. So we’ve already made these investments and we can leverage all these investments. And then we’ve invested more on top of that to make a store. But to recreate this, it’s tens of millions of dollars and years. That’s why I don’t think this is going to be so easy to copy.
How tough was it to sell your music service concept to music industry executives?
Well, we started almost a year and a half ago, and as you recall, the climate at that time was more hostile than it is today, but we did have the luxury of going in at the top, so I talked to Roger Aims at Warner, Doug Morris at Universal, and the other guys. And they clearly realized that the Internet was in their future, but they were shell-shocked with Napster and people stealing their content. And so, the major discussions with the labels were really over giving the users broad personal use rights. And we worked through that, and they learned. I think they trusted us to do the right thing. You know most everybody in the music industry uses a Mac—and they all have iPods—even the ones who don’t use a computer have somebody else load up their iPods for ‘em with the songs they want.
So I think they see Apple as the most creative of the technical companies, a very artist-friendly company, very credible. And you know, we were able to negotiate landmark deals with them that no one else has ever come close to in terms of offering the user really broad rights to the music they buy.
What about independent labels, will they follow suit?
Yes. They’ve already been calling us like crazy. We’ve had to put most of them off until after launch just because the major big five have most of the music, and we only had so many hours in the day. But now we’re really going to have time to focus on a lot of the independents and that will be really great.
With iTunes Music Store, the artists win, music labels win, but what about traditional retailers?
You should go ask them. The Internet was made to deliver music.
Anything else you would like to add?
It’s so great! I cannot overemphasize that because of the previews, browsing, etc. you fall in love with music again—and you find the hits you’ve heard before and the gems you’ve never heard before—and it’s really wonderful. It’s so cool.
By Laura Locke | Wednesday, December 7, 2011 at 1:15 am