Anything You Want

The day Steve Jobs dissed me in a keynote

In  May  2003,  Apple  invited  me  to  their  headquarters  to  discuss  getting  CD

Baby's catalog into the iTunes Music Store.

iTunes  had  just  launched  two  weeks  before,  with  only  some  music  from  the

major  labels.  Many  of  us  in  the  music  biz—especial  y  those  who  had  seen

companies  like  eMusic  use  this  exact  same  model  for  years  without  much

success—were not sure this idea was going to work.

I flew to Cupertino, thinking I'd be meeting with one of Apple's marketing or

tech people. When I arrived, I found out that about a hundred people from smal

record labels and distributors had also been invited.

We al went into a little presentation room, not knowing what to expect.

Then out came Steve Jobs. Whoa! Wow.

He was in ful persuasive presentation mode. Trying to convince al of us to give

Apple our entire catalog of music. Talking about iTunes' success so far, and al

the reasons we should work with Apple.

He made a point of saying, “We want the iTunes Music Store to have every piece

of music ever recorded. Even if it's discontinued or not sel ing much, we want it

al .”

This was huge to me, because until 2003, independent musicians were always

denied access to the big outlets. For Apple to sel al music, not just music from

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artists who had signed their rights away to a corporation—this was amazing!

Then the Apple guys showed us the software we'd al have to use to send them

each album. The software required us to put the audio CD into a Mac CD-ROM

drive;  type  in  al  of  the  album  info,  the  song  titles,  and  the  artist's  bio;  click

Encode for it to rip; and click Upload when done.

I raised my hand and asked if it was required that we use their software. They

said yes.

I asked again, saying we had over a hundred thousand albums, already ripped as

lossless WAV files, with al of the info careful y entered by the artists themselves,

ready to send to Apple's servers with their exact specifications.

The  Apple  guys  said,  “Sorry,  you  need  to  use  this  software;  there  is  no  other

way.”

Ugh. That meant we'd have to pul each one of those CDs off of the shelf again,

stick it in a Mac, and cut and paste every song title into that Mac software. But

so be it. If that's what Apple needed, OK.

They said they'd be ready for us to start uploading in the next couple weeks.

I flew home that night, posted my meeting notes on my website, emailed al of

my clients to announce the news, and went to sleep.

When I woke, I had furious emails and voicemails from my contact at Apple.

“What the hel are you doing? That meeting was confidential! Take those notes

off your site immediately! Our legal department is furious!”

There  was  no  mention  of  confidentiality  at  the  meeting  and  no  agreement  to

sign. But I removed my notes from my site immediately, to be nice. Al was wel ,

or so I thought.

Apple emailed us the iTunes Music Store contract. We immediately signed it and

returned  it  the  same  day.  I  started  building  the  system  to  deliver  everyone's

music to iTunes.

I decided we'd have to charge $40 for this service to cover our bandwidth and

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the payrol costs of pul ing each CD out of the warehouse, entering al the info,

digitizing and uploading the music, and putting the CD back in the warehouse.

Five thousand musicians signed up in advance, each paying $40. That $200,000

helped pay for the extra equipment and people needed to make this happen.

Within  two  weeks,  we  got  contacted  by  Rhapsody,  Yahoo!  Music,  Napster,

eMusic, and more, each saying they wanted our entire catalog.

Yes! Awesome!

Maybe you can't appreciate this now, but the summer of 2003 was the biggest

turning point that independent music has ever had. Until that point, almost no

big business would sel independent music.

With iTunes saying they wanted everything, and then their competitors needing

to  keep  up,  we  were  in!  Since  the  summer  of  2003,  al  musicians  everywhere

have been able to sel al their music in almost every outlet online. Do you realize

how amazing that is?

But there was one problem. iTunes wasn't getting back to us.

Yahoo!,  Rhapsody,  Napster,  and  the  rest  were  al  up  and  running.  But  iTunes

wasn't returning our signed contract.

Was it because I had posted my meeting notes? Had I pissed off Steve Jobs?

Nobody at Apple would say anything. It had been months. My musicians were

getting impatient and angry.

I gave optimistic apologies, but I was starting to get worried, too.

A  month  later,  Steve  Jobs  did  a  special  worldwide  simulcast  keynote  speech

about iTunes.

People had been criticizing iTunes for having less music than the competition.

They had 400,000 songs, while Rhapsody and Napster had over 2

mil ion songs. (Over 500,000 of those were from CD Baby.)

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Four  minutes  in,  he  said  something  that  made  my  pounding  heart  sink  to  my

burning stomach:

“This number could have easily been much higher, if we wanted to let in every

song. But we realize record companies do a great service. They edit!

Did you know that if you and I record a song, for $40 we can pay a few of the

services  to  get  it  on  their  site,  through  some  intermediaries?  We  can  be  on

Rhapsody and al these other guys for $40? Wel , we don't want to let that stuff

on our site! So we've had to edit it. And these are 400,000

quality songs.”

Whoa! Wow. Steve Jobs had just dissed me hard!

I was the only one charging $40. That was me he was referring to!

Shit. OK. That's that. Steve changed his mind. No independents on iTunes. You

heard the man.

I hated the position this put me in. Ever since I started my company in 1998, I

had  been  offering  excel  ent  service.  I  could  make  promises  and  keep  them

because I was in ful control. Now, for the first time, I had promised something

that was out of my control.

So it was time to do the right thing, no matter how much it hurt. I decided to

refund  everybody's  $40,  with  my  deepest  apologies.  With  five  thousand

musicians signed up, that meant I was refunding $200,000.

Since  we  couldn't  promise  anything,  I  couldn't  charge  money  in  good

conscience.

I removed al mention of iTunes from my site. I removed the $40 cost. I decided

to  make  digital  distribution  a  free  service  from  that  point  on.  I  changed  the

language to say we can't promise anything. I emailed everyone to let them know

what had happened.

The very next day, I got our signed contract back from Apple, along with upload

instructions.

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Unbelievable.

I asked, “Why now?” but got no answer.

Whatever. Fucking Apple.

We started encoding and uploading immediately.

I quietly added iTunes back to the list of companies on our site.

But  I  never  again  promised  a  customer  that  I  could  do  something  that  was

beyond my ful control.