How Steve Jobs rescued old media

Music was free online, until Jobs showed that people still wanted to pay
SAN FRANCISCO - JULY 14: A pedestrian passes a wall covered with Apple iPod advertisements July 14, 2005 in San Francisco, California. Shares of Apple Computer surged Thursday after the company reported its best quarterly profit ever. Apple?s net income rose to $320 million, or 37 cents per share, up from the $61 million and 8 cents per share the company reported in the same quarter last year. (Photo by Justin Sullivan/Getty Images)
How Jobs rescued old media
Justin Sullivan/Getty Images

It seems strange to think of Steve Jobs as the man who saved traditional media. After all, everywhere you look, his products are wreaking havoc on old media formats: people are watching TV shows on their iPads instead of staying home to watch them live; people are reading e-books instead of lugging around paper; bookstores and record stores replace much of their shelf space with iPhone and iPod sections. But never mind the shakeups that are occurring in businesses like music: if it hadn’t been for Jobs and iTunes, there might not be a music business to shake up. Jobs’s fellow corporate tycoon, Viacom’s Sumner Redstone, put it very simply in a 2007 speech at Boston University: iTunes “resurrected the music industry.”

Think back to 2000, before the iPod and iTunes existed. Napster had cut deeply into music sales, and while the service itself was shut down, there was no shutting down the concept of music piracy. The ’80s and ’90s compact disc boom, when people ran out to buy physical albums in little plastic jewel cases, was over, and music companies couldn’t accept that: Michael Geist, a law professor at the University of Ottawa who specializes in technology issues, told Maclean’s that “they sought to sue the MP3 player out of existence. Any sort of innovation that left someone other than the industry with control was something to be feared and stopped.” But no lawsuit could change the fact that people wanted music that they didn’t have to stuff into suitcases and carry from place to place, and they wanted it for free.

Computer Weekly proclaimed in 2000 that “the battle against piracy may be lost completely,” and that “mass copyright infringement over the Internet” would be the future. The music companies countered by trying to create their own music services, which bombed because, as Geist puts it, “They were label-specific, they only played on a limited number of MP3s. It was just so consumer-unfriendly.” Jobs realized that no one was going to sign up and pay for only the music that Sony or Universal was willing to give them. “People don’t want to buy music as a subscription,” he told Rolling Stone in 2003. “They want to own their music.”

Jobs’s alternative was the iTunes store, which many music corporations were initially reluctant to go along with. (“At first, they kicked us out,” Jobs recalled, “but we kept going back again and again.”) It was a counterintuitive idea in the post-Napster era: it was based on the notion that people still wanted to pay for music, even though they could get it for free on some other part of the internet. Talking with Jobs the day the store was launched, CNN interviewer Miles O’Brien was incredulous that anyone could try to put that genie back in the bottle: “What makes you so certain,” O’Brien said, “that people are going to actually pay for music they see online?”

But Jobs had a plan, and that plan revolved around the number 99. “You can just buy music at 99 cents a song,” he enthused to O’Brien in explaining why people would go for his legal service. With the price of many individual tracks kept below $1—a price point that hardly seems like a major investment, no matter how many you wind up buying overall—Jobs realized that purchasing a song would seem like a much more casual decision than buying a CD. In exchange for the 99 cents, or $1.29 for more expensive songs, customers would get a lot of things they couldn’t get from pirate sites. With iTunes, you were free from the guilt of breaking the law. And you could be pretty sure the hit you downloaded would be the actual song, and not some bootlegger holding a recording device up to the radio.

Perhaps most importantly, it was more convenient and faster to go to iTunes than to search everywhere for a pirated version; as Jobs put it, illegal downloaders were “spending an hour to download four songs that you could buy for under $4 from Apple, which means you’re working for under minimum wage.” Jobs realized that people will pay extra money if it saves time and trouble.

But iTunes didn’t just revive the idea of paying for content; it helped expand the amount of content people were able to pay for. In the CD era, a lot of obscure music didn’t make it into the format, and if it was released, most stores didn’t stock it. In the era of online-only music, free from the necessity to package and distribute a physical copy, companies were able to release all sorts of uncommercial music. At the height of the CD era, reissues of old Broadway cast albums stalled out, a victim of poor sales; now offers every flop musical via downloads.

iTunes has even changed the things we see and hear on other platforms. The U.S. version of The Office was headed for cancellation in its first season until the network noticed that it was becoming phenomenally popular on iTunes. Not only did NBC make money on those episodes instead of just letting them get pirated, iTunes showed it just how much potential there was in the franchise, and allowed the show to stay on TV, building an audience and eventually making a fortune. iTunes was a medium where consumers could vote directly, with cash, on what television and music should be allowed to continue, cutting through the middleman of TV and radio advertising; Jobs, Geist says, “put consumers at the front of the line rather than at the back.”

Of course, while Jobs helped save music sales and music profits, he also left them a little different than before he came along. The 99-cent song has “shifted us from a CD world to a singles world,” Geist says, and the labels still haven’t come to terms with the fact that we can buy only the song we want: “So much of their so-called decline in revenue can be attributed to a change from a model where you were selling 12 songs to a model where you were selling one.” But even that is a return to an older model, a very old model—thanks to Steve Jobs, the single is king, just like it was before albums took over the music world. As streaming services like Spotify threaten to overturn the music ownership model that Jobs fought to preserve, he may turn out to be the last defender of old-fashioned music distribution. Whatever happens, he’ll be known as the man whose company, as he put it, “brought music back into people’s lives.”