Speaker 1: Welcome to tech Stuff, a production of I Heart Radios,
Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff.
Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with
Speaker 1: How Stuff Works and I Heart Radio and I love
Speaker 1: all things tech. And On June three, two thousand nineteen,
Speaker 1: at Apple's Worldwide Developers Conference or w w d C
Speaker 1: for those who like initialisms, Apple announced that the company
Speaker 1: was going to officially sunset the venerable iTunes program. In
Speaker 1: its place will be three Mac desktop apps that are
Speaker 1: pretty similar to what you can find on iOS devices
Speaker 1: Apple mobile devices. In other words, So today I thought
Speaker 1: it might be fun to trace the history of iTunes,
Speaker 1: how it came to be, how it changed the music
Speaker 1: industry and helped create the business I'm in, which is
Speaker 1: podcasting in case you haven't caught on yet, and why
Speaker 1: Apple decided to finally say goodbye. We'll also explore how
Speaker 1: people felt about iTunes, because it's not all sunshine and roses,
Speaker 1: particularly if you ever had to deal with the Windows
Speaker 1: based version of the program. Oh and before I go
Speaker 1: any further, I should mention that when Apple talked about
Speaker 1: ending iTunes, they were really just talking about Max at
Speaker 1: the time of this recording, the company hasn't said anything
Speaker 1: about what it's planning for the PC version. PC mag
Speaker 1: reported that there's no immediate plan for it to disappear
Speaker 1: from Windows. So there's that, okay, so iTunes. Let's talk
Speaker 1: about the program and where Apple was when it was
Speaker 1: first announced back in two thousand one, because it was
Speaker 1: a very different company from the one we're used to today.
Speaker 1: In fact, it really behooves us to look over Apple's
Speaker 1: history leading up to that moment, because the company had was,
Speaker 1: let's call it, it was in a transition, to put
Speaker 1: it gently, so really had been through an existential crisis. Arguably,
Speaker 1: the crisis began when Steve Jobs inserted himself into the
Speaker 1: development process of various products like the Macintosh line of computers,
Speaker 1: and then complicated a process and alienated many over at
Speaker 1: Apple in the same go, and this eventually precipitated in
Speaker 1: his being fired, or at the very least, he was
Speaker 1: pushed aside so far away that he would leave the
Speaker 1: company in nineteen Steve Wozniak, the other co founder of Apple,
Speaker 1: also left the company around that time, though he had
Speaker 1: sort of stepped back quite a bit already after surviving
Speaker 1: a plane crash in nine. Over the next few years,
Speaker 1: lots of things would change at Apple. John Scully, who
Speaker 1: was the guy who came over to Apple from Pepsi
Speaker 1: and had served as the president of the company. He
Speaker 1: was also of the man who was responsible for pushing
Speaker 1: out Steve Jobs, would become chairman of Apple in nine
Speaker 1: Michael Spindler would become the CEO. Then just a few
Speaker 1: months later, Scully resigned his position as chairman and he
Speaker 1: was replaced by Mike Markula. Markula, in turn, would step
Speaker 1: down just a couple of years later. Gil Emilio would
Speaker 1: become chairman and CEO of Apple in nine six. By
Speaker 1: this point Apple was struggling. Son Microsystems had offered to
Speaker 1: acquire the company, but Emilio turned down that proposal, and
Speaker 1: you could call that a great decision, But Emilio also
Speaker 1: made some questionable choices, such as allowing other companies to
Speaker 1: sell macclone computers by running Mac operating System software on
Speaker 1: non Apple computers. This gave other companies the opportunity to
Speaker 1: sell computers running Mac operating System at a lower price
Speaker 1: than what Apple was charging. And making matters worse was
Speaker 1: that Microsoft had real least Windows, which was a significant
Speaker 1: update to the Windows platform, while the Mac operating system
Speaker 1: was looking more than a little dated at the time.
Speaker 1: Emilia was also unhappy with the progress or lack thereof,
Speaker 1: on the next version of the Mac operating system, code
Speaker 1: named Copeland. In an effort to solve that problem, Emilio
Speaker 1: led the charge for Apple to acquire a company called
Speaker 1: Next in e x T. That company happened to be
Speaker 1: the brainchild of one Steve Jobs, who founded Next after
Speaker 1: leaving Apple in the nineteen eighties, and that set the
Speaker 1: scene for Jobs to become the next CEO of Apple.
Speaker 1: He first served as an advisor to the company, but
Speaker 1: he began maneuvering with the board of directors in an
Speaker 1: effort to become chairman again. Emilio eventually left the company
Speaker 1: after butting heads with Steve Jobs, though to be fair,
Speaker 1: Emilio was also at the helm during the worst financial
Speaker 1: quarter in Apple's history. June seven was the final day
Speaker 1: of that horrible quarter in which Apple lost fifty six
Speaker 1: million dollars. So just let that sink in and just
Speaker 1: three months the company lost more than fifty million bucks.
Speaker 1: No wonder many people predicted that Apple was not long
Speaker 1: for this world. Steve Jobs was named by the board
Speaker 1: as the interim CEO. He would actually refer to his
Speaker 1: own title as I CEO. Cute, right, but it was serious.
Speaker 1: Business Analysts predicted that Apple was about three months away
Speaker 1: from bankruptcy when Jobs took over, so he had a
Speaker 1: huge hurdle to overcome, and he made some really big changes.
Speaker 1: Some were seen as cute, like the iMac. Some were
Speaker 1: seen as the deepest of betrayals, like when Apple and
Speaker 1: Microsoft announced a partnership in a five year agreement to
Speaker 1: have office software come over to the Mac. And while
Speaker 1: not all his decisions were lauded by the Apple faithful,
Speaker 1: he did get the ship turning around. At the Macworld
Speaker 1: conference in he announced that Apple had ended the first
Speaker 1: quarter of ninety eight with a forty five million dollar profit.
Speaker 1: By the end of that year, the company had earned
Speaker 1: three hundred nine million dollars in two thousand. Steve Jobs
Speaker 1: made the transition from interim CEO to honest the Goodness
Speaker 1: CEO and behind the scenes at Apple, where it was
Speaker 1: progressing on a trio of big projects that would transform
Speaker 1: the company. One of them was the OS ten operating system,
Speaker 1: which is still the basis of Mac operating systems today,
Speaker 1: one was iTunes and one that would come out a
Speaker 1: little bit after the other two was the iPod. Now
Speaker 1: keep in mind, at this stage Apple had not yet
Speaker 1: fully re established itself. Steve Jobs could still fill a
Speaker 1: room for a press conference, but this was years before
Speaker 1: Apple would wow crowds with the iPhone or surprise skeptics
Speaker 1: like me with the iPad. Apple the company was still
Speaker 1: on uncertain footing, though it had been an upward trajectory
Speaker 1: after nearly falling apart in the late nineteen nineties. One
Speaker 1: thing Jobs new to do was to pay attention to
Speaker 1: emerging trends. One of those trends that was just starting
Speaker 1: to gain traction involved the MP three audio compression format.
Speaker 1: Early adopters were starting to rip music from CDs to
Speaker 1: their computers, and a couple of companies had created portable
Speaker 1: MP three players, the digital equivalent of a Sony Walkman
Speaker 1: cassette player, but one that could hold a library's worth
Speaker 1: of music. And a couple of former Apple employees named
Speaker 1: Bill Kincaid and Jeff Robin had created an interesting program
Speaker 1: that could turn a computer into a digital jukebox, specifically
Speaker 1: a Mac computer. Now, both Kincaid and Robin had worked
Speaker 1: on Copeland, that Mac operating system version that Emilio had
Speaker 1: discarded in favor of the next platform from Steve Jobs.
Speaker 1: Once the decision was made to ditch the work they
Speaker 1: had done on Opland, both Kincaid and Robin had left
Speaker 1: Apple and they went on to pursue work at different companies.
Speaker 1: They were separated and working on individual opportunities. Now, the
Speaker 1: origins of what would become iTunes should be pretty relatable
Speaker 1: to anyone out there. One day, Bill Kincaid was driving
Speaker 1: up to a race track to practice driving his race
Speaker 1: car at super high speeds. I mean, we've all been there,
Speaker 1: right Anyway, he was listening to NPR when he heard
Speaker 1: a bit about the Diamond Rio MP three player. Kincaid
Speaker 1: wrote that this was actually the first time he had
Speaker 1: even heard of the MP three file format, which is
Speaker 1: kind of interesting because it was definitely in the news
Speaker 1: because of file sharing. But I'll get into that more
Speaker 1: than a bit. Toward the end of the report on NPR,
Speaker 1: the person on the radio said something like it won't
Speaker 1: work with Max, and Kincaid, being a former Apple employee,
Speaker 1: thought he could do something about that, and he ended
Speaker 1: up in listing his former co worker Robin in the effort.
Speaker 1: So Kincaid built the back end of the program and
Speaker 1: enlisted Jeff Robin to work on the front end, the
Speaker 1: user interface side, and the result was software called sound
Speaker 1: jam MP and it worked on Max and it was
Speaker 1: interoperable with the Diamond Rio MP three player. Jobs somehow
Speaker 1: heard about this software and was impressed with the work
Speaker 1: done by the former Apple employees, so he had Apple
Speaker 1: purchase the application. They also hired Kincaid and Robin to
Speaker 1: come back into the fold at Apple, and Robin, by
Speaker 1: the way, was in charge of iTunes all the way
Speaker 1: up to its dissolution. Kincaid and Robin joined a team
Speaker 1: that took sound jam MP and they began to transform
Speaker 1: it into something new, something belonging to Apple. And this
Speaker 1: leads us up to January nine, two thousand one, when
Speaker 1: Steve Jobs took the stage at the back World conference.
Speaker 1: He started off talking out O S ten and he
Speaker 1: moved on to talk about hardware for a while, and
Speaker 1: about an hour into the presentation, somewhere around fifty five minutes,
Speaker 1: he segued over to talking about music. Now, this was
Speaker 1: months before the company would reveal the iPod that was
Speaker 1: still a secret. So at this stage, Jobs was talking
Speaker 1: about the process of taking music CDs and ripping the
Speaker 1: music to your computer. Jobs talked about stuff that I
Speaker 1: think we all take for granted these days. He talked
Speaker 1: about the opportunity to take a music collection, rip it
Speaker 1: to a hard drive, and then create playlists from that music.
Speaker 1: You can mix and match anything you like. You could
Speaker 1: have a playlist with two songs from the New York Dolls,
Speaker 1: three from Iggy Pop, half a dozen from David Bowie,
Speaker 1: four from the Talking Heads, and gosh, I'd really like
Speaker 1: to listen to a playlist like that. Anyway. You can
Speaker 1: make the digital equivalent of an old mix tape on cassette,
Speaker 1: or you could turn your computer into a digital jukebox,
Speaker 1: but unlike a cassette, you could reorder those songs any
Speaker 1: way you liked, any time you liked. You would never
Speaker 1: be stuck in one particular configuration. The beauty of having
Speaker 1: your music in a digital format is that you have
Speaker 1: tons of options, so you can shift things around, or
Speaker 1: even listen to your entire music library on shuffle, so
Speaker 1: that you never have the same listening experience twice in
Speaker 1: a row. Beyond that, you could use the program to
Speaker 1: burn your playlist to a c D. Now, in this case,
Speaker 1: you'd be stuck with whatever order you decided upon when
Speaker 1: you made the CD, unless you were using a rewriteable
Speaker 1: c D, in which case you could wipe it and
Speaker 1: start again. But back in those days, burning a c
Speaker 1: D could take several minutes, and most of us didn't
Speaker 1: have the patients to do it again if we realized
Speaker 1: we had fudged the order of the songs. Jobs then
Speaker 1: went on to talk about portable MP three players, again
Speaker 1: without hinting that Apple was making one of their own.
Speaker 1: He talked about how it was necessary to have software
Speaker 1: on a computer that could interface with m P three
Speaker 1: players to transfer music from computer to player. This was
Speaker 1: necessary because back in those days, MP three players required
Speaker 1: a wired connection to synchronize with a host computer. There
Speaker 1: really were no WiFi MP three players in the early days,
Speaker 1: so you had to pair your MP three player with
Speaker 1: a computer using a cable. I know, it's like the
Speaker 1: Stone Age, right. Steve Jobs finished his introduction before actually
Speaker 1: unveiling iTunes, by talking about internet radio stations. These were
Speaker 1: pretty young in two thousand one, but we're growing in popularity.
Speaker 1: Audio compression had allowed stations to stream radio over the Internet,
Speaker 1: giving them the ability to reach many more listeners than
Speaker 1: terrestrial radio, particularly for radio stations that had lower powered transmitters.
Speaker 1: Now this leads us up to the actual introduction of iTunes,
Speaker 1: which I'll talk about in just a moment after we
Speaker 1: take this quick break. Now, I know all those features
Speaker 1: are news to us today. It's been nearly twenty years
Speaker 1: since Steve Jobs gave that presentation. And let's be fair,
Speaker 1: iTunes would not be the first program to help people
Speaker 1: organize a digital music library. There were others that already existed,
Speaker 1: but Apple always had a certain style to it, and
Speaker 1: Apple designers are genuinely really good at what they do
Speaker 1: and typically create intuitive, powerful interfaces. So it wasn't just
Speaker 1: that iTunes could do these things. It's that it could
Speaker 1: do those things and look good at the same time.
Speaker 1: It was easy to understand. It wasn't so cluttered or
Speaker 1: complex as others, and Jobs took opportunity to really hammer
Speaker 1: home how iTunes, unlike most of the popular digital music
Speaker 1: applications that were on the market, already, was much easier
Speaker 1: to use and to understand. He contrasted iTunes with other
Speaker 1: media software. He criticized how the competition made everything to
Speaker 1: cluttered and confusing. He said that companies just had confused
Speaker 1: options with operability. Jobs also said that the competition put
Speaker 1: in arbitrary restrictions in their programs in an effort to
Speaker 1: convince users to upgrade to the paid version of those programs.
Speaker 1: He said that the software would throttle the ripping and
Speaker 1: burning speeds for CDs, as well as use lower quality
Speaker 1: settings to encode music into MP three files. So yeah,
Speaker 1: you could download one of these applications and it technically
Speaker 1: would work, but it would purposefully hinder itself and give
Speaker 1: you a substandard experience. And this was all done in
Speaker 1: an effort to upsell the user to a pro version
Speaker 1: of that software, which would remove those restrictions, so said Jobs,
Speaker 1: these companies weren't offering an improved piece of software for
Speaker 1: a premium. Rather, they had purposefully downgraded their software's capabilities
Speaker 1: to create the incentive for people to cough up cash
Speaker 1: for the full version. It seems like a backwards way
Speaker 1: to go about it now. In a demonstration, Jobs ripped
Speaker 1: love Shack off, an album by the B fifty two,
Speaker 1: so you know, good choice. He explained that the program
Speaker 1: that his iTunes would read the data off the c D,
Speaker 1: then searched the c D database and retrieved the track
Speaker 1: titles to match with the actual tracks, because that information
Speaker 1: was not encoded on the compact discs themselves. And then
Speaker 1: it would allow you to listen directly from the CD,
Speaker 1: or you could rip it to the computer. Jobs showed
Speaker 1: off how the user could build a music library and
Speaker 1: browsed through that library and play stuff easily. Interestingly, he'd
Speaker 1: include a few examples by the Beatles. I say interestingly
Speaker 1: because it would take a long time before the Beatles
Speaker 1: discography made its way to Apple. But this is before
Speaker 1: the iTunes store. Anyway, there was no way to buy
Speaker 1: music on iTunes at this point. It was all about
Speaker 1: ripping music off c d s, So at the stage
Speaker 1: iTunes was really only a music management application. So iTunes
Speaker 1: debuted in two thousand one as a way to build
Speaker 1: and organize a music library, and there was no music
Speaker 1: story yet. To put songs on iTunes, you would either
Speaker 1: do one of two things. You would rip songs off
Speaker 1: a c D or you would use some other means
Speaker 1: to get the music files. So that could include peer
Speaker 1: to peer sharing networks where you are technically pirating music
Speaker 1: that would become a big part of jobs is discussion.
Speaker 1: What's the iTunes music store would debut a couple of
Speaker 1: years later. Now you could use iTunes to port songs
Speaker 1: over to an MP three player, and you could use
Speaker 1: it to listen to internet radio stations, and you could
Speaker 1: use it to burn your own CDs. But that was
Speaker 1: about it. Oh, except the one more thing. Apple included
Speaker 1: an option to run a graphics application that would create
Speaker 1: trippy visuals as you listen to music, sort of a
Speaker 1: kaleidoscope effect as you're listening. And then they played about
Speaker 1: two thirds of love Shack So as a Georgia native
Speaker 1: and B fifty twos or from Georgia, I approve of
Speaker 1: that music choice, but at that point they should have
Speaker 1: just played the whole darn song. I mean, if you're
Speaker 1: gonna play that much, might as well let it go
Speaker 1: all the way through. Jobs boasted that iTunes wouldn't brattle
Speaker 1: c D speeds, it would allow users to encode MP
Speaker 1: three files at a higher quality than competitors were allowing,
Speaker 1: and most importantly, it would be free to download for
Speaker 1: Mac users. The tagline for iTunes was rip mix burn,
Speaker 1: and Jobs announced that it was available right then and
Speaker 1: there for any Mac running OS nine, and the crowd
Speaker 1: went banana. A week after the presentation, Apple reported that
Speaker 1: the iTunes software had been downloaded two hundred seventy five
Speaker 1: thousand times. Remember it was only available for the Mac
Speaker 1: computers at that time, Matt computers running OS nine for
Speaker 1: that matter, and the Mac had a very small market share,
Speaker 1: so topping a quarter of a million downloads in a
Speaker 1: week was actually pretty ppressive. Apple gave a quick update
Speaker 1: a few months later in March two thousand one, with
Speaker 1: iTunes one point one. The major part of that update
Speaker 1: was making iTunes compatible with Mac OS ten systems. Now
Speaker 1: skip ahead ten months. Steve Jobs appeared at a special
Speaker 1: Apple Music event. He took a different approach at this
Speaker 1: event and talked about value see The first version of
Speaker 1: iTunes would burn CDs as normal music CDs, not as
Speaker 1: MP three c ds. A normal c D can hold
Speaker 1: a little more than an hour's worth of audio, and
Speaker 1: m P three CD can hold more than one hundred
Speaker 1: songs as data, but it could only be read by
Speaker 1: special CD players with MP three capability. Those were slowly
Speaker 1: becoming more prevalent, including in vehicles, so it was something
Speaker 1: that was worthwhile, and then you had MP three player options,
Speaker 1: the newest of which would be the iPod. Jobs talked
Speaker 1: about how the iPod would hold a thousand songs on
Speaker 1: it while fitting in your pocket. Again, it's old news
Speaker 1: to us, but at the time it was a sweet
Speaker 1: sales pitch. Never mind that other MP three players had
Speaker 1: been on the market for quite some while. Jobs had
Speaker 1: even alluded to them back in the initial iTunes announcement.
Speaker 1: And this isn't an episode about the iPod, so I'm
Speaker 1: not going to dwell on it for too long. But
Speaker 1: at that same event, Jobs announced some updates to the
Speaker 1: iTunes software. Now iTunes two point oh could burn MP
Speaker 1: three files to CDs rather than creating a new audio CD,
Speaker 1: and that would allow users to put way more songs
Speaker 1: on a single disc. As long as they had a
Speaker 1: player capable of reading MP three files, they'd be good
Speaker 1: to go. Apple added a couple of other options to
Speaker 1: iTunes at that stage as well, namely cross fading and
Speaker 1: an equalizer. While Steve Jobs was setting things in motion
Speaker 1: to blast Apple off into the stratosphere, iTunes continued to evolve.
Speaker 1: When i Tunes three released in July two thousand two,
Speaker 1: it was with a few new features. Now, users could
Speaker 1: assigned songs of star rating, which allowed them to sort
Speaker 1: their music library by how much they liked particular songs.
Speaker 1: So if you wanted to just listen to songs you
Speaker 1: really loved, you could choose the max rating and include
Speaker 1: all those other, you know, songs that you had said
Speaker 1: were fantastic, and exclude all the ones that you know
Speaker 1: aren't really your groove at that moment. Notably, that was
Speaker 1: a feature supported in an earlier digital media player application,
Speaker 1: a different one one called Audion. Now. According to Cable Sasser,
Speaker 1: who was co creator of Audion, he had met with
Speaker 1: Steve Jobs and had a back and forth about the
Speaker 1: differences between iTunes and sound Jam and the Audion digital
Speaker 1: media player, and he had pointed out how Audion had
Speaker 1: some features that iTunes did not, which would give their
Speaker 1: software a chance in the market against the giant tunes.
Speaker 1: Jobs actually pointed out that the version of iTunes that
Speaker 1: Sasser was talking about was just version one point oh,
Speaker 1: and that subsequent versions would add features features like the
Speaker 1: ones Audience had. Sasser also said that he found out
Speaker 1: Apple had allegedly originally intended on purchasing Audion and turning
Speaker 1: Audion into iTunes, and that sound Jam was technically Apple's
Speaker 1: second choice, but Audion at the time was in negotiations
Speaker 1: with a different company and it kind of put Apple
Speaker 1: on hold and the opportunity passed them by. And on
Speaker 1: a side note, today Audion is no more. It was
Speaker 1: actually discontinued in two thousand four. And whether this was
Speaker 1: another example of one of Steve jobs favorite quotes frequently
Speaker 1: attributed to Pablo Picasso that being good artists borrow, great
Speaker 1: artists steal, That's beyond my knowledge, but it does seem
Speaker 1: plausible that Apple might have taken some inspiration from Audion
Speaker 1: after having that meeting in two thousand one. Another new
Speaker 1: feature in iTunes three was the introduction of smart playlists. Essentially,
Speaker 1: a smart playlist allowed iTunes users to set certain rules
Speaker 1: that the program would follow moving forward in order to
Speaker 1: automatically create playlists. So let's say you're a big fan
Speaker 1: of the band The shut Ups. You have a playlist
Speaker 1: of all their songs, and you could just keep adding
Speaker 1: to that playlist as new albums come out from The
Speaker 1: shut Ups. But with smart playlists, you could set up
Speaker 1: a rule so that every time you added new songs
Speaker 1: to your library from the shut ups, those songs would
Speaker 1: automatically get added onto that particular playlist. iTunes also had
Speaker 1: a play count for songs added in iTunes three, so
Speaker 1: you could create a playlist of the songs you listen
Speaker 1: to the most frequently. That list would change dynamically the
Speaker 1: more you used iTunes to listen to stuff. So maybe
Speaker 1: one month you find and you're just really fixated on
Speaker 1: the classic song Come a little Bit Closer by J
Speaker 1: and the Americans, and because you've listened to it a
Speaker 1: billion times, it pops up on your most played playlist.
Speaker 1: But over time you get out of this whole fixation
Speaker 1: on the song, and eventually it gets swapped out for
Speaker 1: some other song that now you are totally focused on.
Speaker 1: iTunes three also added a feature called sound check. The
Speaker 1: purpose of sound check is to act as a sort
Speaker 1: of level izer for volume. And maybe you've experienced this
Speaker 1: kind of thing where you're listening to digital music and
Speaker 1: one song it's pretty quiet, so you're turning the volume
Speaker 1: way up so you can hear it properly, and then
Speaker 1: the next one comes on and it's way too loud.
Speaker 1: It's blasting your ear drums. To minimize that kind of experience,
Speaker 1: sound check would attempt to bring the volume of different
Speaker 1: songs closer together to the same level to avoid a
Speaker 1: jarring experience. One last thing that iTunes three added was
Speaker 1: support for audible dot Com audio books. Back then, audible
Speaker 1: dot Com was its own standalone company. It would actually
Speaker 1: be a few more years before Amazon would acquire it now.
Speaker 1: I add this because I imagine Apple and Amazon are
Speaker 1: kind of competitive with each other on most occasions. Audible
Speaker 1: dot Com is known for audiobooks, and this would also
Speaker 1: help pave the way for a future form of media
Speaker 1: to emerge the podcast. While iTunes three added in some
Speaker 1: features that increased the digital jukebox programs functionality, it would
Speaker 1: be the fourth version of iTunes that would really bring
Speaker 1: it along with a component that would have a massive
Speaker 1: impact on the entertainment industry. In April two thousand three,
Speaker 1: Apple unveiled iTunes for which included a little thing called
Speaker 1: the iTunes Store. The music business would never be the
Speaker 1: same again. At the two thousand three Apple Music event,
Speaker 1: Steve Jobs took the stage to talk about the new
Speaker 1: changes to iTunes. He talked about how iTunes would now
Speaker 1: support advanced audio coding or a sea files, which is
Speaker 1: an audio compression format similar to m P three's but
Speaker 1: with generally better sound quality. And then he talked about
Speaker 1: the iTunes store and how Apple was going to change
Speaker 1: the way we acquire music, which I'll talk about more
Speaker 1: in just a second after we take this quick break.
Speaker 1: Upon the initial release of iTunes and up through two three,
Speaker 1: Apple's official line was that you would add music to
Speaker 1: iTunes by ripping tracks off of c d s you
Speaker 1: had purchased. But even in two thousand one, when iTunes
Speaker 1: first debuted, that was really being pretty coy. Back in
Speaker 1: the late nineties, services like Napster allowed users to share
Speaker 1: and download files, including ripped audio tracks. All you needed
Speaker 1: was the Napster software and an Internet connection, and you
Speaker 1: can start pulling music off the Internet to add to
Speaker 1: your own personal library for free. The greatest fears of
Speaker 1: the music industry were realized. People had the chance to
Speaker 1: pirate music to their hearts content, and lots of people
Speaker 1: really went hog wild with that concept. The music industry
Speaker 1: struck back, and Napster itself was first shut down in
Speaker 1: two thousand one, but the cat was out of the bag.
Speaker 1: There were numerous other services that were doing effectively the
Speaker 1: same thing, and people were rapidly acquiring massive libraries of
Speaker 1: music because it seemed like everything was available all the
Speaker 1: time always, But argued Jobs, what if buying music online
Speaker 1: was really easy. One of the reasons piracy existed, he argued,
Speaker 1: is that buying music online was really a non option.
Speaker 1: There was no legal way of doing it, and the
Speaker 1: few places where you could get a digital track made
Speaker 1: it a real hassle. You had existing services like Rhapsody,
Speaker 1: but they required a subscription, so you couldn't just pop
Speaker 1: on to buy the tracks you wanted, and there was
Speaker 1: no guarantee you'd be allowed to download the track you
Speaker 1: liked in the first place. Another similar service was called
Speaker 1: press Play, and that was another subscription service, and you
Speaker 1: could download songs from press Play and from Rhapsody, but
Speaker 1: they would require you to spend an extra amount on
Speaker 1: top of your subscription fee in order to download a track,
Speaker 1: and Jobs pointed out, at least with press Play, if
Speaker 1: you let your subscription lapse, you would no longer be
Speaker 1: able to play your downloaded music. There was drm attached
Speaker 1: to it, so that only if your subscription was current
Speaker 1: would you be able to listen to the music you
Speaker 1: had downloaded to your machine. You would have files on
Speaker 1: your computer you would not be able to access, your
Speaker 1: library would be locked off from you. No one out
Speaker 1: there was big enough to create the sort of marketplace
Speaker 1: where major labels could strike deals to have their catalogs
Speaker 1: available for purchase and download. No one was offering the
Speaker 1: software for free without the need for any sort of subscription,
Speaker 1: and no one was giving users the free they wanted
Speaker 1: to download songs and play them where and when they
Speaker 1: wanted to, and that ended up being the pitch for
Speaker 1: the iTunes Music store. On a side note, one of
Speaker 1: the most interesting things about this two thousand three presentation,
Speaker 1: which you can find on YouTube, by the way, is
Speaker 1: that Jobs takes time to dismiss the idea of subscription
Speaker 1: services for music streaming. He pointed out that for decades,
Speaker 1: the model for consumers was to go out and buy music,
Speaker 1: either on LP albums, cassette tapes, c D s, singles,
Speaker 1: or whatever. He argued that this would become an intrinsic
Speaker 1: part of how we as consumers relate to music. Were
Speaker 1: used to owning copies of it, and therefore the subscription
Speaker 1: model opposed how we preferred to interact with music now.
Speaker 1: I just wanted to mention this that because today we
Speaker 1: are back to a lot of subscription based services, that's
Speaker 1: the new prevalent model out there, many of which have
Speaker 1: an ad supported free tier and a paid for ad
Speaker 1: free experience. And it's interesting that the environment Jobs was
Speaker 1: dismissing in two thousand three is now the reality in
Speaker 1: two thousand nineteen. And that's not to say I think
Speaker 1: that Jobs was wrong when he said that. I think
Speaker 1: for the time he was absolutely right, and the success
Speaker 1: of iTunes is evidence supporting that stance. But things would
Speaker 1: change over time. All right back to iTunes, Jobs laid
Speaker 1: out how establishing the iTunes store was actually a pretty
Speaker 1: tough endeavor. To make it happen, Apple had to meet
Speaker 1: with what we're known as the Big Five. These were
Speaker 1: the five big music labels that represented nearly the entire
Speaker 1: music publishing industry outside of some small independent operations. He
Speaker 1: also mentioned that at the time, tech companies and publishing
Speaker 1: companies weren't the best of friends, largely because of the
Speaker 1: piracy issues I just mentioned. Jobs laid the terms of
Speaker 1: the agreement that applied to users. At the time of launch,
Speaker 1: the music store had two hundred thousand tracks. Users would
Speaker 1: be allowed to burn an unlimited number of c ds
Speaker 1: of their music libraries, provided the CDs were for personal use. Now,
Speaker 1: I'm not going to pat the music industry on the
Speaker 1: back for this, since in the United States, in the
Speaker 1: United Kingdom, and in lots of other places, it has
Speaker 1: long been established that it's perfectly legal to create a
Speaker 1: backup copy of a copyrighted work if it is for
Speaker 1: your personal use, even if in the process of making
Speaker 1: the backup you are transforming the way the copyrighted work
Speaker 1: is stored. So, for example, if you have a bunch
Speaker 1: of audio CDs, ripping those audio CDs to convert them
Speaker 1: into m P three's is perfectly legal if it's for
Speaker 1: personal use as a backup. But hey, it's so nice
Speaker 1: that the labels agreed to abide by the rules. As
Speaker 1: a concession to the music industry, Apple did put in
Speaker 1: a governor in iTunes to prevent it from being used
Speaker 1: to burn unlimited copies of the same set of songs
Speaker 1: on two c D s. You could burn the same
Speaker 1: playlist two c D ten times, but if you wanted
Speaker 1: to do it an eleventh time, you would have to
Speaker 1: change the playlist. In some way, you couldn't have the
Speaker 1: exact same playlist burned on c D after c D,
Speaker 1: and that would in theory stop people from using iTunes
Speaker 1: to produce bootleg copies of albums, though you could just
Speaker 1: as easily get a CD reader and a CD burner,
Speaker 1: produce one CD using iTunes, and then churn out the
Speaker 1: copies using the reader and burner that bypass iTunes altogether,
Speaker 1: but that's a step that most people wouldn't really be
Speaker 1: aware of or willing to take. Similarly, the agreement allowed
Speaker 1: users to put their music on an unlimited number of iPods.
Speaker 1: This future proofed music libraries. You didn't have to worry
Speaker 1: about the new iPod coming out, but your license to
Speaker 1: put your library on there had expired or was no
Speaker 1: longer applicable or something. JOBS also introduced the concept of
Speaker 1: authorizing machines to play music libraries with iTunes. For you
Speaker 1: can load your iTunes library on up to three Mac computers.
Speaker 1: You download to one computer, then you can burn files
Speaker 1: to c D and transfer them to the other two
Speaker 1: if they were bought from the iTunes Music store, but
Speaker 1: you would be limited to those three Mac computers. If
Speaker 1: you've got a new computer and you wanted to move
Speaker 1: your library to the new one, you'd first have to
Speaker 1: de authorize one of the three max already hosting those
Speaker 1: tunes on your library. Jobs also revealed that songs would
Speaker 1: sell for nine nine cents each and there'd be no
Speaker 1: subscription fee on top of that. This was actually one
Speaker 1: of the toughest battles Jobs had to fight with the
Speaker 1: music labels, who collectively were worried that by allowing people
Speaker 1: to buy songs all a cart the process would kill
Speaker 1: off the concept of the record album, and record albums
Speaker 1: were the foundation for the recorded music industry. See, people
Speaker 1: would have to buy entire albums in order to get
Speaker 1: two or three songs that they really wanted, and an
Speaker 1: album could cost fifteen or twenty dollars, so the music
Speaker 1: industry was raking in cash, and it didn't even have
Speaker 1: to worry about making every track on an album a hit,
Speaker 1: because really you just needed one or two to sell
Speaker 1: the albums in the first place. You can understand why
Speaker 1: the industry would resist the move to selling songs a
Speaker 1: la carte the same way you could understand why music
Speaker 1: lovers really wanted that option. Jobs was able to convince
Speaker 1: the record labels that offering up the option to buy
Speaker 1: songs individually would not be the end of the world,
Speaker 1: in part because of the limitations Apple seemed to face
Speaker 1: at the time during these negotiations. iTunes was not yet
Speaker 1: available on Windows PCs. The Macintosh had its devoted followers,
Speaker 1: but they represented a very small percentage of the overall
Speaker 1: computer market. Less than ten of all computers were Mac computers, So,
Speaker 1: in other words, Apple's impact would be so small that
Speaker 1: even if people did by single songs, and even if
Speaker 1: they did issue albums they decided the albums are no
Speaker 1: longer relevant, the music labels probably wouldn't even notice. It
Speaker 1: was too small of a group of people. Besides, file
Speaker 1: sharing had already meant that people were downloading music song
Speaker 1: by song, so at least with Apple's method, the labels
Speaker 1: could make some money off of it. Another nod to
Speaker 1: the concerns of the music industry was in the use
Speaker 1: of digital rights management or d r M on the
Speaker 1: music files from the iTunes store, which locked the music
Speaker 1: onto Apple devices or computers running iTunes. Kind of talked
Speaker 1: about that with the d authorizing. Whether Jobs was in
Speaker 1: favor of this at the time or not, I don't know,
Speaker 1: but I do know that over time he spoke out
Speaker 1: against DRM, saying the strategy ultimately hurt the legitimate consumer
Speaker 1: and that it shouldn't be used. But at the time
Speaker 1: Apple was kind of in a place where it had
Speaker 1: to agree to it, even if if Jobs didn't really
Speaker 1: like it, And honestly, I don't know if that time
Speaker 1: if Jobs had formed that opinion. Yet the songs in
Speaker 1: the iTunes store were in a a C format encoded
Speaker 1: at all bits per second, giving what Jobs claimed was
Speaker 1: a sound quality to rival that of actual audio CDs.
Speaker 1: He revealed that every song would have a free thirty
Speaker 1: second preview so users can make sure that the song
Speaker 1: they were buying was the one they actually wanted in
Speaker 1: the first place, and every song would have album cover
Speaker 1: art to come along with it, no longer making a
Speaker 1: digital song library just a list of file names. The
Speaker 1: crowd at the event was receptive to Jobs as announcement,
Speaker 1: and he didn't really go into the business side on
Speaker 1: the back end. He didn't talk about how much money
Speaker 1: Apple would make off every sale. Generally speaking, the figure
Speaker 1: most people cite in that regard is that Apple would
Speaker 1: take about thirty cents off every sale. The rest would
Speaker 1: go to the artist, or more likely to the music
Speaker 1: label that then would pay out a portion to the artist.
Speaker 1: Thirty cents a pop is pretty small, but Apple was
Speaker 1: able to do the old cliche of making it up
Speaker 1: in volume. Sure, a single purchase would net the company
Speaker 1: three shiny dimes, but in mass, the company was looking
Speaker 1: at millions and later on billions of dollars in revenue.
Speaker 1: In fact, according to Apple, people bought more than a
Speaker 1: million songs in the first week of the iTunes music
Speaker 1: store going live. The company also stated that more than
Speaker 1: half of those songs purchased were in the form of
Speaker 1: album purchases, which helped allay the fears that iTunes was
Speaker 1: going to render the concept of albums completely moot. And,
Speaker 1: perhaps more impressively, Apple announced that more than half of
Speaker 1: the two thousand songs that initially made available had been
Speaker 1: purchased at least once, making three hundred grand within one
Speaker 1: week of launching a brand new online store is pretty sweet.
Speaker 1: But it got better for Apple because the company also
Speaker 1: saw a big jump in iPod sales. So Apple had
Speaker 1: just introduced the third generation I Pod and it was
Speaker 1: a hot commodity. Now Apple was making money both off
Speaker 1: the hardware side and the service side of digital music.
Speaker 1: Apple had launched the store in April two thousand three
Speaker 1: and updated it in October of that year, adding some
Speaker 1: features like the option to buy online gift certificates for
Speaker 1: family and friends, and also an allowance feature that let
Speaker 1: users create sort of a music bank account. They could
Speaker 1: put money into this allowance and that would help them
Speaker 1: budget their entertainment purchases. So they'd say, all right, well,
Speaker 1: I'm gonna put ten bucks aside, and that's all I
Speaker 1: can use this month. So I'm gonna put that in
Speaker 1: my allowance, and once that's gone, I have to wait
Speaker 1: until the following month before I put another ten dollars
Speaker 1: in there. It was kind of a way to control purchases.
Speaker 1: Oh and it was also in that update that iTunes
Speaker 1: would finally come out to the Windows PC market. Now,
Speaker 1: as someone who got iTunes around that time for a
Speaker 1: Windows PC, I can tell you that the effortless experience
Speaker 1: enjoyed by the Mac users wasn't quite the same one
Speaker 1: I had when I used iTunes, which felt like a
Speaker 1: sluggish behemoth on my Windows machine. But we'll chat more
Speaker 1: about the differences in the next episode. Apple was able
Speaker 1: to get the music labels on board with this move
Speaker 1: to Windows, largely because Jobs had user data to support
Speaker 1: his argument. The labels saw that people were eager to
Speaker 1: purchase music online if it was an easy experience. They
Speaker 1: didn't have to worry about downloading a corrupted file or,
Speaker 1: worse yet, accidentally getting a hold of malware when they
Speaker 1: were trying to download a song. They also knew that
Speaker 1: the quality of the recording would meet their expectations because
Speaker 1: it was all coming from Apple and the users hadn't
Speaker 1: ditched the concept of purchasing albums. So iTunes had made
Speaker 1: itself a home over on Windows machines with the blessing
Speaker 1: of the music labels, and it was a license to
Speaker 1: print money. By the end of the year, the iTunes
Speaker 1: music store reportedly sold more than seventy million songs. That's
Speaker 1: a lot of music. Many factor contributed to Apple's phenomenal
Speaker 1: growth in the two thousand's, but I don't think it's
Speaker 1: hyperbole to say that iTunes contributed an enormous amount to
Speaker 1: the financial success of the company. It certainly would prove
Speaker 1: to be a powerhouse in the years to come. By
Speaker 1: two thousand four, the music store contributed to two hundred
Speaker 1: seventy eight million dollars in revenue from quote other music
Speaker 1: products end quote, according to Apple's annual financial report. Now,
Speaker 1: that category wasn't just iTunes Music Store, It also included
Speaker 1: iPod accessories. The iPod itself was separated from that category
Speaker 1: as well as iPod related services. Now, just to peek
Speaker 1: into our crystal ball for a second, on the tenth
Speaker 1: anniversary of the music store launching, that would be in
Speaker 1: two thousand thirteen, analyst Horace, did you estimated that the
Speaker 1: store generated revenue in excess of twelve billion dollars. Now,
Speaker 1: I'll put that into perspective Apple the company, the whole
Speaker 1: company reported a total revenue of eight billion dollars in
Speaker 1: two thousand four, So a decade after launching, the iTunes
Speaker 1: Music store was generating far more revenue than the entire
Speaker 1: company had managed during its launch period. But we've got
Speaker 1: some more stuff to talk about between the years two
Speaker 1: thousand four and two thousand and thirteen, So join me
Speaker 1: for the next episode where we'll continue the iTunes story
Speaker 1: and how the program grew, and maybe even talk about
Speaker 1: why it grew beyond all reason before it finally met
Speaker 1: its end in the summer of twenty nineteen. But this
Speaker 1: wraps up this episode. If you have suggestions for future episodes,
Speaker 1: whether it's a company, a specific technology, a person in tech,
Speaker 1: or any other technologically oriented topic, sent me an email
Speaker 1: the addresses tech stuff at how stuff works dot com,
Speaker 1: or drop on by our website that's tech stuff podcast
Speaker 1: dot com. You'll find in our kind of all of
Speaker 1: our episodes over there, plus links to our social media
Speaker 1: presence and a link to our online store, where every
Speaker 1: purchase you make goes to help the show, and we
Speaker 1: greatly appreciate it, and I'll talk to you again really soon.
Speaker 1: Text Stuff is a production of I Heart Radio's How
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