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
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
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.)
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.
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.
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