Sony had a potent combination of hardware expertise and content from Sony Music. The prevailing sentiment was that Sony’s Walkman would bury the iPod. “He came to us last because he saw Sony as a competitor, and he rightfully didn’t want to tip us off too early to what he was doing,” Lack recalls. Lack was CEO of Sony Music, and Stringer head of Sony’s U.S. Jobs turned to Sony last, inviting Andy Lack and Howard Stringer to Apple’s headquarters in February 2003, just a couple of months before launching the iTunes store. By early 2003, all had agreed to a deal - except Sony. EMI wanted Apple to devote more marketing dollars to the store. Universal thought the price should’ve been higher. BMG balked at having to break apart the album and make every song available as a single. “He had a clear, complete thought that went from the iPod to iTunes. “He was a great salesman,” says Doug Morris, who was head of Universal Music at the time. Jobs brought the spark that lit up the deals - one after another. iTunes would have been stillborn if Steve hadn’t gotten personally involved.” “To the labels, Apple was this small company with 2% market share in PCs. “Apple certainly had very good people, but they couldn’t get the deals done,” says Jay Samit, then-president of digital distribution at EMI. The only certainty was that music sales would drop even more - unless the industry could give consumers a reason to pay.Īpple’s solution, it seemed to many at Warner who saw it for the first time that day when Jobs demonstrated the service on Warner’s own Windows-based computer, could very well give consumers that reason.īy early fall 2002, with a Warner deal in hand, Apple began herding the other labels, including EMI, Universal, BMG and Sony. Ravaged by piracy, executives were desperate as they watched a $40 billion-per-year business crumble beneath their feet and, ultimately, reduced to half its size. Looking at iTunes’ well-oiled operation today, it’s tempting to conclude that the decisions that led to its creation were obvious, its path to market was clear and the outcome of its dominance inevitable. Ames and team were just as excited.The tale of how iTunes was created remains one of the few unqualified success stories of a Silicon Valley technology company teaming with the entertainment industry to fully exploit an emerging business model. “He was like a kid in a candy store,” Vidich says. He gleefully demonstrated a prototype of the iTunes store, enthusing over every minute detail of the software. By all accounts, Jobs was gracious and charming, in full sales mode that day in his distinctive black mock turtleneck and jeans. He flew out to Warner’s headquarters in New York. “It all moved very quickly after that,” one executive involved in the discussions says.īy early fall, Jobs had a prototype he could show. It became an acceptable impulse purchase.” Below $1 was an emotional threshold for people. ![]() “We knew we needed to alter consumer behavior in a big way. ![]() “When we told Steve, he looked at us like we just gave him a gift,” Vidich recalls. At the time, many labels wanted to price tracks at $3.49 each. Don’t make the mistake of trying to work with all of us at the same time.”įor the next six months, during several Cupertino visits by Ames and his team, Apple and Warner ironed out the business plan while Apple built the infrastructure for its store.ĭuring those meetings it was Warner executives, not Jobs as is commonly thought, who suggested tracks be sold for 99 cents. He told Jobs: “Work with me alone until you’re completely ready. During the two-hour coffee-fueled meeting in Apple’s board room, Jobs talked through his plan excitedly.īy the end, Ames was onboard. ![]() Vidich flew out to Cupertino again, this time with Warner Music CEO Roger Ames. This pitch seemed different somehow, more elegant. It had been tried by other companies before, but nothing really caught on. Jobs said he wanted to discuss his own vision for a digital music store. ![]() It started Apple down its own path, and two months later Jobs called Vidich and requested a separate meeting with Warner executives alone. Still, the meeting sowed the seeds for something much bigger. But this consortium never produced a product or standard.” We need your help.’ The intent of the meeting was to recruit Apple to join the consortium, which they did. “I replied in a hoarse voice, ‘You’re right, Steve. “Everyone else in the room was silent,” recalls Warner executive VP Paul Vidich, who attended the meeting after flying in from New York that morning. “You guys have your heads up your asses.” As Doug Morris Builds New Label, Former Employers Question Cost of His Loyalty to Protegee
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |