At the time, publishers were profoundly unhappy. Apple was not only proposing to take a third of the revenues, but was also requiring that the transaction go through Apple, meaning publishers would get none of the consumer data that had such high value to advertisers.
Mr. Jobs was friendly enough — I can recall a less pleasant conversation about the criminal case involving a stolen iPhone prototype — but he thought it was silly for publishers to whine about sales sans data. After all, he said, they already did a tremendous business on the physical newsstand that didn’t provide a lick of data about their buyers.
The exchange we had was more of an example of Mr. Jobs as micromanager than as technological visionary. But the perspective it showed is indicative of a pattern for Apple and Mr. Jobs. Again and again, he would step up to entrenched players in the media with calcified business models and explain their business to them in ways they didn’t recognize from the inside.
Apple is a technology company, but as someone who writes about the insular kingdom of media, I can’t think of a bigger player on the board in the last 10 years. In music, in movies, in publishing — television has been another story, so far, though there are rumors that the company is turning its guns on television in a big way — Apple has upended long-standing paradigms and altered the media landscape.
So what secret tunnel did he use to bypass and overcome traditional media businesses? One carved by consumers. By placing sexy, irresistible devices in the hands of the public, he reverse-engineered the business model of the industries that produce the content for Apple’s gorgeous hardware.
When the iPod and iTunes were unveiled in 2001, the music industry was under siege from piracy, with sites like Napster thriving on the free use of its content. Mr. Jobs’s take-it-or-leave it deal gave Apple control over pricing, data, distribution and platform, a proposal of towering hubris. But the industry, kicking and screaming all the way, eventually went along, and 10 billion song downloads later, digital revenue is a fundamental part of the business.
In the process, Apple brought a practical end to the album format — allowing people to buy individual songs and create their own playlists.
ITunes not only supplied a legitimate, easy-to-use alternative to piracy, it created a runway for services like Pandora and Spotify.
“He took a locked system, one that was controlled by the record companies, and cracked it open,” said Jim Guerinot, the longtime manager of The Offspring, Trent Reznor and Nine Inch Nails, and Gwen Stefani. “That disruption created opportunities for everything that has happened since.”
Mr. Jobs didn’t so much see around corners; he saw things in plain sight that others did not. “It’s not the consumer’s job to know what they want,” he explained. In the case of music, many of us wanted the ease and portability of MP3 files, but didn’t want to become mouse-enabled criminals taking the music we wanted. From that perspective, 99 cents seemed like a small price to pay.
“I think far from destroying the music business, he put it on a path to redemption,” said Tom Freston, former head of Viacom and MTV. “With the iPod and iTunes, Steve not only created his own ecosystem, it turned out to be one that was contagious and created opportunities not only for his computer business, but for all the Apple products that came behind it.”
Mr. Jobs was initially pegged as a technologist who didn’t understand the media and entertainment businesses, but his track record as an operator is pretty enviable. In 1986, he bought the company which would become Pixar from George Lucas for $5 million and invested $5 million more.
Mr. Jobs understood that all that technological processing power could be used in service of narrative in unforeseen ways: After two decades and many computer-generated blockbusters, he sold the company to Disney in a deal valued at $7.4 billion.
Mr. Jobs has walked quickly and surely past conventional wisdom. He had no interest in market research. He did things his own way and expected the rest of the world to fall into line. He both brought the mouse into our homes and more or less killed it off, eliminated the floppy disc with the first iMac, and did away with the DVDs on the MacBook Air, decisions that foretold the obsolescence of physical media. He shrunk Web-enabled devices by piggy-backing on the phone business, profoundly changing the way in which people consume media.
This article has been revised to reflect the following correction:
Correction: August 27, 2011
An earlier version of this article misstated the inventor of the computer mouse. It was invented by Douglas Engelbart, not Steve Jobs.
Article source: http://feeds.nytimes.com/click.phdo?i=0f3c4b93738cc154cb63c04f773ccb71