WEBVTT - The Creation of iTunes

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<v Speaker 1>Welcome to tech Stuff, a production of I Heart Radios,

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<v Speaker 1>How Stuff Works. Hey there, and welcome to tech Stuff.

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<v Speaker 1>I'm your host, Jonathan Strickland. I'm an executive producer with

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<v Speaker 1>How Stuff Works and I Heart Radio and I love

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<v Speaker 1>all things tech. And On June three, two thousand nineteen,

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<v Speaker 1>at Apple's Worldwide Developers Conference or w w d C

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<v Speaker 1>for those who like initialisms, Apple announced that the company

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<v Speaker 1>was going to officially sunset the venerable iTunes program. In

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<v Speaker 1>its place will be three Mac desktop apps that are

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<v Speaker 1>pretty similar to what you can find on iOS devices

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<v Speaker 1>Apple mobile devices. In other words, So today I thought

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<v Speaker 1>it might be fun to trace the history of iTunes,

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<v Speaker 1>how it came to be, how it changed the music

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<v Speaker 1>industry and helped create the business I'm in, which is

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<v Speaker 1>podcasting in case you haven't caught on yet, and why

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<v Speaker 1>Apple decided to finally say goodbye. We'll also explore how

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<v Speaker 1>people felt about iTunes, because it's not all sunshine and roses,

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<v Speaker 1>particularly if you ever had to deal with the Windows

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<v Speaker 1>based version of the program. Oh and before I go

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<v Speaker 1>any further, I should mention that when Apple talked about

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<v Speaker 1>ending iTunes, they were really just talking about Max at

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<v Speaker 1>the time of this recording, the company hasn't said anything

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<v Speaker 1>about what it's planning for the PC version. PC mag

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<v Speaker 1>reported that there's no immediate plan for it to disappear

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<v Speaker 1>from Windows. So there's that, okay, so iTunes. Let's talk

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<v Speaker 1>about the program and where Apple was when it was

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<v Speaker 1>first announced back in two thousand one, because it was

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<v Speaker 1>a very different company from the one we're used to today.

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<v Speaker 1>In fact, it really behooves us to look over Apple's

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<v Speaker 1>history leading up to that moment, because the company had was,

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<v Speaker 1>let's call it, it was in a transition, to put

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<v Speaker 1>it gently, so really had been through an existential crisis. Arguably,

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<v Speaker 1>the crisis began when Steve Jobs inserted himself into the

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<v Speaker 1>development process of various products like the Macintosh line of computers,

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<v Speaker 1>and then complicated a process and alienated many over at

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<v Speaker 1>Apple in the same go, and this eventually precipitated in

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<v Speaker 1>his being fired, or at the very least, he was

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<v Speaker 1>pushed aside so far away that he would leave the

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<v Speaker 1>company in nineteen Steve Wozniak, the other co founder of Apple,

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<v Speaker 1>also left the company around that time, though he had

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<v Speaker 1>sort of stepped back quite a bit already after surviving

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<v Speaker 1>a plane crash in nine. Over the next few years,

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<v Speaker 1>lots of things would change at Apple. John Scully, who

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<v Speaker 1>was the guy who came over to Apple from Pepsi

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<v Speaker 1>and had served as the president of the company. He

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<v Speaker 1>was also of the man who was responsible for pushing

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<v Speaker 1>out Steve Jobs, would become chairman of Apple in nine

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<v Speaker 1>Michael Spindler would become the CEO. Then just a few

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<v Speaker 1>months later, Scully resigned his position as chairman and he

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<v Speaker 1>was replaced by Mike Markula. Markula, in turn, would step

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<v Speaker 1>down just a couple of years later. Gil Emilio would

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<v Speaker 1>become chairman and CEO of Apple in nine six. By

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<v Speaker 1>this point Apple was struggling. Son Microsystems had offered to

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<v Speaker 1>acquire the company, but Emilio turned down that proposal, and

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<v Speaker 1>you could call that a great decision, But Emilio also

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<v Speaker 1>made some questionable choices, such as allowing other companies to

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<v Speaker 1>sell macclone computers by running Mac operating System software on

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<v Speaker 1>non Apple computers. This gave other companies the opportunity to

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<v Speaker 1>sell computers running Mac operating System at a lower price

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<v Speaker 1>than what Apple was charging. And making matters worse was

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<v Speaker 1>that Microsoft had real least Windows, which was a significant

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<v Speaker 1>update to the Windows platform, while the Mac operating system

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<v Speaker 1>was looking more than a little dated at the time.

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<v Speaker 1>Emilia was also unhappy with the progress or lack thereof,

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<v Speaker 1>on the next version of the Mac operating system, code

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<v Speaker 1>named Copeland. In an effort to solve that problem, Emilio

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<v Speaker 1>led the charge for Apple to acquire a company called

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<v Speaker 1>Next in e x T. That company happened to be

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<v Speaker 1>the brainchild of one Steve Jobs, who founded Next after

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<v Speaker 1>leaving Apple in the nineteen eighties, and that set the

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<v Speaker 1>scene for Jobs to become the next CEO of Apple.

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<v Speaker 1>He first served as an advisor to the company, but

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<v Speaker 1>he began maneuvering with the board of directors in an

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<v Speaker 1>effort to become chairman again. Emilio eventually left the company

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<v Speaker 1>after butting heads with Steve Jobs, though to be fair,

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<v Speaker 1>Emilio was also at the helm during the worst financial

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<v Speaker 1>quarter in Apple's history. June seven was the final day

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<v Speaker 1>of that horrible quarter in which Apple lost fifty six

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<v Speaker 1>million dollars. So just let that sink in and just

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<v Speaker 1>three months the company lost more than fifty million bucks.

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<v Speaker 1>No wonder many people predicted that Apple was not long

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<v Speaker 1>for this world. Steve Jobs was named by the board

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<v Speaker 1>as the interim CEO. He would actually refer to his

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<v Speaker 1>own title as I CEO. Cute, right, but it was serious.

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<v Speaker 1>Business Analysts predicted that Apple was about three months away

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<v Speaker 1>from bankruptcy when Jobs took over, so he had a

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<v Speaker 1>huge hurdle to overcome, and he made some really big changes.

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<v Speaker 1>Some were seen as cute, like the iMac. Some were

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<v Speaker 1>seen as the deepest of betrayals, like when Apple and

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<v Speaker 1>Microsoft announced a partnership in a five year agreement to

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<v Speaker 1>have office software come over to the Mac. And while

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<v Speaker 1>not all his decisions were lauded by the Apple faithful,

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<v Speaker 1>he did get the ship turning around. At the Macworld

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<v Speaker 1>conference in he announced that Apple had ended the first

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<v Speaker 1>quarter of ninety eight with a forty five million dollar profit.

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<v Speaker 1>By the end of that year, the company had earned

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<v Speaker 1>three hundred nine million dollars in two thousand. Steve Jobs

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<v Speaker 1>made the transition from interim CEO to honest the Goodness

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<v Speaker 1>CEO and behind the scenes at Apple, where it was

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<v Speaker 1>progressing on a trio of big projects that would transform

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<v Speaker 1>the company. One of them was the OS ten operating system,

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<v Speaker 1>which is still the basis of Mac operating systems today,

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<v Speaker 1>one was iTunes and one that would come out a

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<v Speaker 1>little bit after the other two was the iPod. Now

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<v Speaker 1>keep in mind, at this stage Apple had not yet

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<v Speaker 1>fully re established itself. Steve Jobs could still fill a

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<v Speaker 1>room for a press conference, but this was years before

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<v Speaker 1>Apple would wow crowds with the iPhone or surprise skeptics

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<v Speaker 1>like me with the iPad. Apple the company was still

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<v Speaker 1>on uncertain footing, though it had been an upward trajectory

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<v Speaker 1>after nearly falling apart in the late nineteen nineties. One

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<v Speaker 1>thing Jobs new to do was to pay attention to

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<v Speaker 1>emerging trends. One of those trends that was just starting

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<v Speaker 1>to gain traction involved the MP three audio compression format.

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<v Speaker 1>Early adopters were starting to rip music from CDs to

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<v Speaker 1>their computers, and a couple of companies had created portable

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<v Speaker 1>MP three players, the digital equivalent of a Sony Walkman

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<v Speaker 1>cassette player, but one that could hold a library's worth

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<v Speaker 1>of music. And a couple of former Apple employees named

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<v Speaker 1>Bill Kincaid and Jeff Robin had created an interesting program

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<v Speaker 1>that could turn a computer into a digital jukebox, specifically

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<v Speaker 1>a Mac computer. Now, both Kincaid and Robin had worked

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<v Speaker 1>on Copeland, that Mac operating system version that Emilio had

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<v Speaker 1>discarded in favor of the next platform from Steve Jobs.

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<v Speaker 1>Once the decision was made to ditch the work they

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<v Speaker 1>had done on Opland, both Kincaid and Robin had left

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<v Speaker 1>Apple and they went on to pursue work at different companies.

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<v Speaker 1>They were separated and working on individual opportunities. Now, the

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<v Speaker 1>origins of what would become iTunes should be pretty relatable

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<v Speaker 1>to anyone out there. One day, Bill Kincaid was driving

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<v Speaker 1>up to a race track to practice driving his race

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<v Speaker 1>car at super high speeds. I mean, we've all been there,

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<v Speaker 1>right Anyway, he was listening to NPR when he heard

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<v Speaker 1>a bit about the Diamond Rio MP three player. Kincaid

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<v Speaker 1>wrote that this was actually the first time he had

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<v Speaker 1>even heard of the MP three file format, which is

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<v Speaker 1>kind of interesting because it was definitely in the news

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<v Speaker 1>because of file sharing. But I'll get into that more

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<v Speaker 1>than a bit. Toward the end of the report on NPR,

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<v Speaker 1>the person on the radio said something like it won't

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<v Speaker 1>work with Max, and Kincaid, being a former Apple employee,

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<v Speaker 1>thought he could do something about that, and he ended

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<v Speaker 1>up in listing his former co worker Robin in the effort.

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<v Speaker 1>So Kincaid built the back end of the program and

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<v Speaker 1>enlisted Jeff Robin to work on the front end, the

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<v Speaker 1>user interface side, and the result was software called sound

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<v Speaker 1>jam MP and it worked on Max and it was

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<v Speaker 1>interoperable with the Diamond Rio MP three player. Jobs somehow

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<v Speaker 1>heard about this software and was impressed with the work

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<v Speaker 1>done by the former Apple employees, so he had Apple

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<v Speaker 1>purchase the application. They also hired Kincaid and Robin to

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<v Speaker 1>come back into the fold at Apple, and Robin, by

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<v Speaker 1>the way, was in charge of iTunes all the way

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<v Speaker 1>up to its dissolution. Kincaid and Robin joined a team

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<v Speaker 1>that took sound jam MP and they began to transform

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<v Speaker 1>it into something new, something belonging to Apple. And this

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<v Speaker 1>leads us up to January nine, two thousand one, when

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<v Speaker 1>Steve Jobs took the stage at the back World conference.

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<v Speaker 1>He started off talking out O S ten and he

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<v Speaker 1>moved on to talk about hardware for a while, and

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<v Speaker 1>about an hour into the presentation, somewhere around fifty five minutes,

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<v Speaker 1>he segued over to talking about music. Now, this was

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<v Speaker 1>months before the company would reveal the iPod that was

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<v Speaker 1>still a secret. So at this stage, Jobs was talking

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<v Speaker 1>about the process of taking music CDs and ripping the

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<v Speaker 1>music to your computer. Jobs talked about stuff that I

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<v Speaker 1>think we all take for granted these days. He talked

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<v Speaker 1>about the opportunity to take a music collection, rip it

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<v Speaker 1>to a hard drive, and then create playlists from that music.

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<v Speaker 1>You can mix and match anything you like. You could

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<v Speaker 1>have a playlist with two songs from the New York Dolls,

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<v Speaker 1>three from Iggy Pop, half a dozen from David Bowie,

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<v Speaker 1>four from the Talking Heads, and gosh, I'd really like

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<v Speaker 1>to listen to a playlist like that. Anyway. You can

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<v Speaker 1>make the digital equivalent of an old mix tape on cassette,

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<v Speaker 1>or you could turn your computer into a digital jukebox,

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<v Speaker 1>but unlike a cassette, you could reorder those songs any

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<v Speaker 1>way you liked, any time you liked. You would never

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<v Speaker 1>be stuck in one particular configuration. The beauty of having

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<v Speaker 1>your music in a digital format is that you have

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<v Speaker 1>tons of options, so you can shift things around, or

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<v Speaker 1>even listen to your entire music library on shuffle, so

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<v Speaker 1>that you never have the same listening experience twice in

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<v Speaker 1>a row. Beyond that, you could use the program to

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<v Speaker 1>burn your playlist to a c D. Now, in this case,

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<v Speaker 1>you'd be stuck with whatever order you decided upon when

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<v Speaker 1>you made the CD, unless you were using a rewriteable

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<v Speaker 1>c D, in which case you could wipe it and

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<v Speaker 1>start again. But back in those days, burning a c

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<v Speaker 1>D could take several minutes, and most of us didn't

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<v Speaker 1>have the patients to do it again if we realized

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<v Speaker 1>we had fudged the order of the songs. Jobs then

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<v Speaker 1>went on to talk about portable MP three players, again

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<v Speaker 1>without hinting that Apple was making one of their own.

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<v Speaker 1>He talked about how it was necessary to have software

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<v Speaker 1>on a computer that could interface with m P three

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<v Speaker 1>players to transfer music from computer to player. This was

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<v Speaker 1>necessary because back in those days, MP three players required

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<v Speaker 1>a wired connection to synchronize with a host computer. There

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<v Speaker 1>really were no WiFi MP three players in the early days,

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<v Speaker 1>so you had to pair your MP three player with

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<v Speaker 1>a computer using a cable. I know, it's like the

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<v Speaker 1>Stone Age, right. Steve Jobs finished his introduction before actually

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<v Speaker 1>unveiling iTunes, by talking about internet radio stations. These were

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<v Speaker 1>pretty young in two thousand one, but we're growing in popularity.

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<v Speaker 1>Audio compression had allowed stations to stream radio over the Internet,

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<v Speaker 1>giving them the ability to reach many more listeners than

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<v Speaker 1>terrestrial radio, particularly for radio stations that had lower powered transmitters.

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<v Speaker 1>Now this leads us up to the actual introduction of iTunes,

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<v Speaker 1>which I'll talk about in just a moment after we

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<v Speaker 1>take this quick break. Now, I know all those features

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<v Speaker 1>are news to us today. It's been nearly twenty years

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<v Speaker 1>since Steve Jobs gave that presentation. And let's be fair,

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<v Speaker 1>iTunes would not be the first program to help people

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<v Speaker 1>organize a digital music library. There were others that already existed,

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<v Speaker 1>but Apple always had a certain style to it, and

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<v Speaker 1>Apple designers are genuinely really good at what they do

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<v Speaker 1>and typically create intuitive, powerful interfaces. So it wasn't just

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<v Speaker 1>that iTunes could do these things. It's that it could

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<v Speaker 1>do those things and look good at the same time.

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<v Speaker 1>It was easy to understand. It wasn't so cluttered or

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<v Speaker 1>complex as others, and Jobs took opportunity to really hammer

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<v Speaker 1>home how iTunes, unlike most of the popular digital music

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<v Speaker 1>applications that were on the market, already, was much easier

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<v Speaker 1>to use and to understand. He contrasted iTunes with other

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<v Speaker 1>media software. He criticized how the competition made everything to

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<v Speaker 1>cluttered and confusing. He said that companies just had confused

0:13:59.080 --> 0:14:03.600
<v Speaker 1>options with operability. Jobs also said that the competition put

0:14:03.600 --> 0:14:07.240
<v Speaker 1>in arbitrary restrictions in their programs in an effort to

0:14:07.320 --> 0:14:11.880
<v Speaker 1>convince users to upgrade to the paid version of those programs.

0:14:12.200 --> 0:14:14.920
<v Speaker 1>He said that the software would throttle the ripping and

0:14:15.000 --> 0:14:18.800
<v Speaker 1>burning speeds for CDs, as well as use lower quality

0:14:18.840 --> 0:14:21.920
<v Speaker 1>settings to encode music into MP three files. So yeah,

0:14:22.000 --> 0:14:26.040
<v Speaker 1>you could download one of these applications and it technically

0:14:26.080 --> 0:14:31.040
<v Speaker 1>would work, but it would purposefully hinder itself and give

0:14:31.080 --> 0:14:35.120
<v Speaker 1>you a substandard experience. And this was all done in

0:14:35.160 --> 0:14:38.520
<v Speaker 1>an effort to upsell the user to a pro version

0:14:38.680 --> 0:14:43.200
<v Speaker 1>of that software, which would remove those restrictions, so said Jobs,

0:14:43.440 --> 0:14:46.920
<v Speaker 1>these companies weren't offering an improved piece of software for

0:14:46.960 --> 0:14:52.480
<v Speaker 1>a premium. Rather, they had purposefully downgraded their software's capabilities

0:14:52.680 --> 0:14:55.600
<v Speaker 1>to create the incentive for people to cough up cash

0:14:55.680 --> 0:14:59.560
<v Speaker 1>for the full version. It seems like a backwards way

0:14:59.600 --> 0:15:03.160
<v Speaker 1>to go about it now. In a demonstration, Jobs ripped

0:15:03.360 --> 0:15:06.120
<v Speaker 1>love Shack off, an album by the B fifty two,

0:15:06.160 --> 0:15:10.720
<v Speaker 1>so you know, good choice. He explained that the program

0:15:10.920 --> 0:15:13.760
<v Speaker 1>that his iTunes would read the data off the c D,

0:15:14.320 --> 0:15:17.240
<v Speaker 1>then searched the c D database and retrieved the track

0:15:17.400 --> 0:15:21.040
<v Speaker 1>titles to match with the actual tracks, because that information

0:15:21.160 --> 0:15:25.360
<v Speaker 1>was not encoded on the compact discs themselves. And then

0:15:25.600 --> 0:15:27.800
<v Speaker 1>it would allow you to listen directly from the CD,

0:15:28.080 --> 0:15:31.400
<v Speaker 1>or you could rip it to the computer. Jobs showed

0:15:31.440 --> 0:15:34.240
<v Speaker 1>off how the user could build a music library and

0:15:34.360 --> 0:15:38.680
<v Speaker 1>browsed through that library and play stuff easily. Interestingly, he'd

0:15:38.680 --> 0:15:42.280
<v Speaker 1>include a few examples by the Beatles. I say interestingly

0:15:42.360 --> 0:15:45.200
<v Speaker 1>because it would take a long time before the Beatles

0:15:45.240 --> 0:15:48.720
<v Speaker 1>discography made its way to Apple. But this is before

0:15:48.800 --> 0:15:51.520
<v Speaker 1>the iTunes store. Anyway, there was no way to buy

0:15:51.800 --> 0:15:54.080
<v Speaker 1>music on iTunes at this point. It was all about

0:15:54.200 --> 0:15:57.360
<v Speaker 1>ripping music off c d s, So at the stage

0:15:57.360 --> 0:16:01.680
<v Speaker 1>iTunes was really only a music management application. So iTunes

0:16:01.720 --> 0:16:04.800
<v Speaker 1>debuted in two thousand one as a way to build

0:16:04.880 --> 0:16:09.280
<v Speaker 1>and organize a music library, and there was no music

0:16:09.280 --> 0:16:12.160
<v Speaker 1>story yet. To put songs on iTunes, you would either

0:16:12.280 --> 0:16:14.520
<v Speaker 1>do one of two things. You would rip songs off

0:16:14.520 --> 0:16:18.120
<v Speaker 1>a c D or you would use some other means

0:16:18.160 --> 0:16:22.720
<v Speaker 1>to get the music files. So that could include peer

0:16:22.800 --> 0:16:25.840
<v Speaker 1>to peer sharing networks where you are technically pirating music

0:16:26.160 --> 0:16:29.680
<v Speaker 1>that would become a big part of jobs is discussion.

0:16:29.760 --> 0:16:32.320
<v Speaker 1>What's the iTunes music store would debut a couple of

0:16:32.360 --> 0:16:36.120
<v Speaker 1>years later. Now you could use iTunes to port songs

0:16:36.160 --> 0:16:38.360
<v Speaker 1>over to an MP three player, and you could use

0:16:38.400 --> 0:16:40.720
<v Speaker 1>it to listen to internet radio stations, and you could

0:16:40.800 --> 0:16:43.080
<v Speaker 1>use it to burn your own CDs. But that was

0:16:43.080 --> 0:16:47.360
<v Speaker 1>about it. Oh, except the one more thing. Apple included

0:16:47.400 --> 0:16:50.640
<v Speaker 1>an option to run a graphics application that would create

0:16:50.680 --> 0:16:53.160
<v Speaker 1>trippy visuals as you listen to music, sort of a

0:16:53.240 --> 0:16:57.040
<v Speaker 1>kaleidoscope effect as you're listening. And then they played about

0:16:57.160 --> 0:17:00.360
<v Speaker 1>two thirds of love Shack So as a Georgia native

0:17:00.680 --> 0:17:03.600
<v Speaker 1>and B fifty twos or from Georgia, I approve of

0:17:03.640 --> 0:17:06.159
<v Speaker 1>that music choice, but at that point they should have

0:17:06.240 --> 0:17:07.879
<v Speaker 1>just played the whole darn song. I mean, if you're

0:17:07.920 --> 0:17:09.399
<v Speaker 1>gonna play that much, might as well let it go

0:17:09.440 --> 0:17:12.600
<v Speaker 1>all the way through. Jobs boasted that iTunes wouldn't brattle

0:17:12.680 --> 0:17:15.680
<v Speaker 1>c D speeds, it would allow users to encode MP

0:17:15.760 --> 0:17:18.760
<v Speaker 1>three files at a higher quality than competitors were allowing,

0:17:19.280 --> 0:17:22.800
<v Speaker 1>and most importantly, it would be free to download for

0:17:22.880 --> 0:17:27.320
<v Speaker 1>Mac users. The tagline for iTunes was rip mix burn,

0:17:27.840 --> 0:17:30.199
<v Speaker 1>and Jobs announced that it was available right then and

0:17:30.280 --> 0:17:34.360
<v Speaker 1>there for any Mac running OS nine, and the crowd

0:17:34.680 --> 0:17:39.679
<v Speaker 1>went banana. A week after the presentation, Apple reported that

0:17:39.800 --> 0:17:43.640
<v Speaker 1>the iTunes software had been downloaded two hundred seventy five

0:17:43.800 --> 0:17:48.880
<v Speaker 1>thousand times. Remember it was only available for the Mac

0:17:48.920 --> 0:17:52.439
<v Speaker 1>computers at that time, Matt computers running OS nine for

0:17:52.480 --> 0:17:56.200
<v Speaker 1>that matter, and the Mac had a very small market share,

0:17:56.520 --> 0:17:58.720
<v Speaker 1>so topping a quarter of a million downloads in a

0:17:58.760 --> 0:18:02.560
<v Speaker 1>week was actually pretty ppressive. Apple gave a quick update

0:18:02.600 --> 0:18:05.520
<v Speaker 1>a few months later in March two thousand one, with

0:18:05.600 --> 0:18:08.600
<v Speaker 1>iTunes one point one. The major part of that update

0:18:08.640 --> 0:18:13.120
<v Speaker 1>was making iTunes compatible with Mac OS ten systems. Now

0:18:13.160 --> 0:18:17.879
<v Speaker 1>skip ahead ten months. Steve Jobs appeared at a special

0:18:18.040 --> 0:18:21.280
<v Speaker 1>Apple Music event. He took a different approach at this

0:18:21.359 --> 0:18:24.760
<v Speaker 1>event and talked about value see The first version of

0:18:24.760 --> 0:18:28.880
<v Speaker 1>iTunes would burn CDs as normal music CDs, not as

0:18:29.040 --> 0:18:32.480
<v Speaker 1>MP three c ds. A normal c D can hold

0:18:32.520 --> 0:18:35.440
<v Speaker 1>a little more than an hour's worth of audio, and

0:18:35.720 --> 0:18:38.680
<v Speaker 1>m P three CD can hold more than one hundred

0:18:38.840 --> 0:18:42.199
<v Speaker 1>songs as data, but it could only be read by

0:18:42.280 --> 0:18:46.359
<v Speaker 1>special CD players with MP three capability. Those were slowly

0:18:46.400 --> 0:18:51.080
<v Speaker 1>becoming more prevalent, including in vehicles, so it was something

0:18:51.119 --> 0:18:55.040
<v Speaker 1>that was worthwhile, and then you had MP three player options,

0:18:55.240 --> 0:18:59.359
<v Speaker 1>the newest of which would be the iPod. Jobs talked

0:18:59.359 --> 0:19:02.480
<v Speaker 1>about how the iPod would hold a thousand songs on

0:19:02.520 --> 0:19:06.000
<v Speaker 1>it while fitting in your pocket. Again, it's old news

0:19:06.040 --> 0:19:08.240
<v Speaker 1>to us, but at the time it was a sweet

0:19:08.280 --> 0:19:12.000
<v Speaker 1>sales pitch. Never mind that other MP three players had

0:19:12.040 --> 0:19:14.919
<v Speaker 1>been on the market for quite some while. Jobs had

0:19:15.000 --> 0:19:18.040
<v Speaker 1>even alluded to them back in the initial iTunes announcement.

0:19:18.800 --> 0:19:21.320
<v Speaker 1>And this isn't an episode about the iPod, so I'm

0:19:21.320 --> 0:19:23.600
<v Speaker 1>not going to dwell on it for too long. But

0:19:23.680 --> 0:19:27.159
<v Speaker 1>at that same event, Jobs announced some updates to the

0:19:27.200 --> 0:19:31.600
<v Speaker 1>iTunes software. Now iTunes two point oh could burn MP

0:19:31.720 --> 0:19:35.320
<v Speaker 1>three files to CDs rather than creating a new audio CD,

0:19:35.800 --> 0:19:38.400
<v Speaker 1>and that would allow users to put way more songs

0:19:38.520 --> 0:19:41.000
<v Speaker 1>on a single disc. As long as they had a

0:19:41.000 --> 0:19:43.680
<v Speaker 1>player capable of reading MP three files, they'd be good

0:19:43.720 --> 0:19:46.800
<v Speaker 1>to go. Apple added a couple of other options to

0:19:46.880 --> 0:19:50.560
<v Speaker 1>iTunes at that stage as well, namely cross fading and

0:19:50.600 --> 0:19:54.600
<v Speaker 1>an equalizer. While Steve Jobs was setting things in motion

0:19:54.680 --> 0:19:59.360
<v Speaker 1>to blast Apple off into the stratosphere, iTunes continued to evolve.

0:19:59.640 --> 0:20:02.800
<v Speaker 1>When i Tunes three released in July two thousand two,

0:20:03.119 --> 0:20:07.360
<v Speaker 1>it was with a few new features. Now, users could

0:20:07.359 --> 0:20:09.960
<v Speaker 1>assigned songs of star rating, which allowed them to sort

0:20:10.000 --> 0:20:12.959
<v Speaker 1>their music library by how much they liked particular songs.

0:20:13.240 --> 0:20:15.399
<v Speaker 1>So if you wanted to just listen to songs you

0:20:15.480 --> 0:20:18.920
<v Speaker 1>really loved, you could choose the max rating and include

0:20:19.000 --> 0:20:21.960
<v Speaker 1>all those other, you know, songs that you had said

0:20:22.000 --> 0:20:25.119
<v Speaker 1>were fantastic, and exclude all the ones that you know

0:20:25.640 --> 0:20:29.280
<v Speaker 1>aren't really your groove at that moment. Notably, that was

0:20:29.320 --> 0:20:33.480
<v Speaker 1>a feature supported in an earlier digital media player application,

0:20:33.560 --> 0:20:38.840
<v Speaker 1>a different one one called Audion. Now. According to Cable Sasser,

0:20:39.119 --> 0:20:41.959
<v Speaker 1>who was co creator of Audion, he had met with

0:20:41.960 --> 0:20:44.240
<v Speaker 1>Steve Jobs and had a back and forth about the

0:20:44.240 --> 0:20:49.640
<v Speaker 1>differences between iTunes and sound Jam and the Audion digital

0:20:49.680 --> 0:20:52.600
<v Speaker 1>media player, and he had pointed out how Audion had

0:20:52.680 --> 0:20:56.440
<v Speaker 1>some features that iTunes did not, which would give their

0:20:56.480 --> 0:21:00.359
<v Speaker 1>software a chance in the market against the giant tunes.

0:21:01.160 --> 0:21:04.159
<v Speaker 1>Jobs actually pointed out that the version of iTunes that

0:21:04.240 --> 0:21:07.399
<v Speaker 1>Sasser was talking about was just version one point oh,

0:21:07.600 --> 0:21:12.040
<v Speaker 1>and that subsequent versions would add features features like the

0:21:12.040 --> 0:21:16.000
<v Speaker 1>ones Audience had. Sasser also said that he found out

0:21:16.080 --> 0:21:22.199
<v Speaker 1>Apple had allegedly originally intended on purchasing Audion and turning

0:21:22.240 --> 0:21:26.880
<v Speaker 1>Audion into iTunes, and that sound Jam was technically Apple's

0:21:27.080 --> 0:21:31.080
<v Speaker 1>second choice, but Audion at the time was in negotiations

0:21:31.119 --> 0:21:33.840
<v Speaker 1>with a different company and it kind of put Apple

0:21:34.440 --> 0:21:37.720
<v Speaker 1>on hold and the opportunity passed them by. And on

0:21:37.760 --> 0:21:40.840
<v Speaker 1>a side note, today Audion is no more. It was

0:21:40.840 --> 0:21:44.399
<v Speaker 1>actually discontinued in two thousand four. And whether this was

0:21:44.440 --> 0:21:48.120
<v Speaker 1>another example of one of Steve jobs favorite quotes frequently

0:21:48.119 --> 0:21:52.680
<v Speaker 1>attributed to Pablo Picasso that being good artists borrow, great

0:21:52.760 --> 0:21:57.080
<v Speaker 1>artists steal, That's beyond my knowledge, but it does seem

0:21:57.080 --> 0:22:01.520
<v Speaker 1>plausible that Apple might have taken some inspiration from Audion

0:22:01.680 --> 0:22:05.680
<v Speaker 1>after having that meeting in two thousand one. Another new

0:22:05.760 --> 0:22:11.360
<v Speaker 1>feature in iTunes three was the introduction of smart playlists. Essentially,

0:22:11.400 --> 0:22:15.160
<v Speaker 1>a smart playlist allowed iTunes users to set certain rules

0:22:15.400 --> 0:22:18.879
<v Speaker 1>that the program would follow moving forward in order to

0:22:18.920 --> 0:22:23.200
<v Speaker 1>automatically create playlists. So let's say you're a big fan

0:22:23.400 --> 0:22:26.080
<v Speaker 1>of the band The shut Ups. You have a playlist

0:22:26.080 --> 0:22:29.440
<v Speaker 1>of all their songs, and you could just keep adding

0:22:29.560 --> 0:22:32.199
<v Speaker 1>to that playlist as new albums come out from The

0:22:32.200 --> 0:22:35.080
<v Speaker 1>shut Ups. But with smart playlists, you could set up

0:22:35.080 --> 0:22:37.680
<v Speaker 1>a rule so that every time you added new songs

0:22:37.720 --> 0:22:40.840
<v Speaker 1>to your library from the shut ups, those songs would

0:22:40.840 --> 0:22:45.280
<v Speaker 1>automatically get added onto that particular playlist. iTunes also had

0:22:45.280 --> 0:22:48.719
<v Speaker 1>a play count for songs added in iTunes three, so

0:22:48.760 --> 0:22:51.040
<v Speaker 1>you could create a playlist of the songs you listen

0:22:51.119 --> 0:22:55.159
<v Speaker 1>to the most frequently. That list would change dynamically the

0:22:55.200 --> 0:22:58.800
<v Speaker 1>more you used iTunes to listen to stuff. So maybe

0:22:58.840 --> 0:23:01.880
<v Speaker 1>one month you find and you're just really fixated on

0:23:02.040 --> 0:23:04.800
<v Speaker 1>the classic song Come a little Bit Closer by J

0:23:04.960 --> 0:23:08.000
<v Speaker 1>and the Americans, and because you've listened to it a

0:23:08.000 --> 0:23:11.320
<v Speaker 1>billion times, it pops up on your most played playlist.

0:23:11.680 --> 0:23:15.719
<v Speaker 1>But over time you get out of this whole fixation

0:23:15.960 --> 0:23:18.919
<v Speaker 1>on the song, and eventually it gets swapped out for

0:23:18.960 --> 0:23:21.959
<v Speaker 1>some other song that now you are totally focused on.

0:23:22.880 --> 0:23:26.520
<v Speaker 1>iTunes three also added a feature called sound check. The

0:23:26.560 --> 0:23:28.880
<v Speaker 1>purpose of sound check is to act as a sort

0:23:28.920 --> 0:23:33.040
<v Speaker 1>of level izer for volume. And maybe you've experienced this

0:23:33.119 --> 0:23:36.000
<v Speaker 1>kind of thing where you're listening to digital music and

0:23:36.080 --> 0:23:38.640
<v Speaker 1>one song it's pretty quiet, so you're turning the volume

0:23:38.680 --> 0:23:40.520
<v Speaker 1>way up so you can hear it properly, and then

0:23:40.560 --> 0:23:42.440
<v Speaker 1>the next one comes on and it's way too loud.

0:23:42.480 --> 0:23:46.080
<v Speaker 1>It's blasting your ear drums. To minimize that kind of experience,

0:23:46.240 --> 0:23:49.080
<v Speaker 1>sound check would attempt to bring the volume of different

0:23:49.119 --> 0:23:52.280
<v Speaker 1>songs closer together to the same level to avoid a

0:23:52.359 --> 0:23:56.359
<v Speaker 1>jarring experience. One last thing that iTunes three added was

0:23:56.440 --> 0:24:01.040
<v Speaker 1>support for audible dot Com audio books. Back then, audible

0:24:01.080 --> 0:24:04.520
<v Speaker 1>dot Com was its own standalone company. It would actually

0:24:04.520 --> 0:24:07.920
<v Speaker 1>be a few more years before Amazon would acquire it now.

0:24:07.920 --> 0:24:10.359
<v Speaker 1>I add this because I imagine Apple and Amazon are

0:24:10.440 --> 0:24:14.240
<v Speaker 1>kind of competitive with each other on most occasions. Audible

0:24:14.240 --> 0:24:17.280
<v Speaker 1>dot Com is known for audiobooks, and this would also

0:24:17.280 --> 0:24:19.879
<v Speaker 1>help pave the way for a future form of media

0:24:20.000 --> 0:24:24.520
<v Speaker 1>to emerge the podcast. While iTunes three added in some

0:24:24.600 --> 0:24:29.040
<v Speaker 1>features that increased the digital jukebox programs functionality, it would

0:24:29.080 --> 0:24:31.720
<v Speaker 1>be the fourth version of iTunes that would really bring

0:24:31.760 --> 0:24:34.720
<v Speaker 1>it along with a component that would have a massive

0:24:34.760 --> 0:24:39.040
<v Speaker 1>impact on the entertainment industry. In April two thousand three,

0:24:39.119 --> 0:24:43.720
<v Speaker 1>Apple unveiled iTunes for which included a little thing called

0:24:43.920 --> 0:24:47.840
<v Speaker 1>the iTunes Store. The music business would never be the

0:24:47.880 --> 0:24:51.160
<v Speaker 1>same again. At the two thousand three Apple Music event,

0:24:51.400 --> 0:24:54.080
<v Speaker 1>Steve Jobs took the stage to talk about the new

0:24:54.200 --> 0:24:57.240
<v Speaker 1>changes to iTunes. He talked about how iTunes would now

0:24:57.280 --> 0:25:01.359
<v Speaker 1>support advanced audio coding or a sea files, which is

0:25:01.400 --> 0:25:04.840
<v Speaker 1>an audio compression format similar to m P three's but

0:25:04.960 --> 0:25:08.879
<v Speaker 1>with generally better sound quality. And then he talked about

0:25:08.880 --> 0:25:11.760
<v Speaker 1>the iTunes store and how Apple was going to change

0:25:11.800 --> 0:25:14.719
<v Speaker 1>the way we acquire music, which I'll talk about more

0:25:14.720 --> 0:25:17.800
<v Speaker 1>in just a second after we take this quick break.

0:25:25.440 --> 0:25:29.199
<v Speaker 1>Upon the initial release of iTunes and up through two three,

0:25:29.800 --> 0:25:32.879
<v Speaker 1>Apple's official line was that you would add music to

0:25:32.920 --> 0:25:35.679
<v Speaker 1>iTunes by ripping tracks off of c d s you

0:25:35.720 --> 0:25:39.240
<v Speaker 1>had purchased. But even in two thousand one, when iTunes

0:25:39.280 --> 0:25:43.760
<v Speaker 1>first debuted, that was really being pretty coy. Back in

0:25:43.800 --> 0:25:47.960
<v Speaker 1>the late nineties, services like Napster allowed users to share

0:25:48.040 --> 0:25:52.679
<v Speaker 1>and download files, including ripped audio tracks. All you needed

0:25:52.960 --> 0:25:55.919
<v Speaker 1>was the Napster software and an Internet connection, and you

0:25:55.920 --> 0:25:58.399
<v Speaker 1>can start pulling music off the Internet to add to

0:25:58.440 --> 0:26:02.080
<v Speaker 1>your own personal library for free. The greatest fears of

0:26:02.119 --> 0:26:05.480
<v Speaker 1>the music industry were realized. People had the chance to

0:26:05.600 --> 0:26:09.280
<v Speaker 1>pirate music to their hearts content, and lots of people

0:26:09.720 --> 0:26:13.280
<v Speaker 1>really went hog wild with that concept. The music industry

0:26:13.320 --> 0:26:16.119
<v Speaker 1>struck back, and Napster itself was first shut down in

0:26:16.160 --> 0:26:18.520
<v Speaker 1>two thousand one, but the cat was out of the bag.

0:26:18.800 --> 0:26:21.679
<v Speaker 1>There were numerous other services that were doing effectively the

0:26:21.720 --> 0:26:27.359
<v Speaker 1>same thing, and people were rapidly acquiring massive libraries of

0:26:27.440 --> 0:26:30.439
<v Speaker 1>music because it seemed like everything was available all the

0:26:30.480 --> 0:26:35.640
<v Speaker 1>time always, But argued Jobs, what if buying music online

0:26:36.080 --> 0:26:40.840
<v Speaker 1>was really easy. One of the reasons piracy existed, he argued,

0:26:41.280 --> 0:26:45.720
<v Speaker 1>is that buying music online was really a non option.

0:26:45.840 --> 0:26:48.840
<v Speaker 1>There was no legal way of doing it, and the

0:26:48.960 --> 0:26:51.720
<v Speaker 1>few places where you could get a digital track made

0:26:51.720 --> 0:26:55.600
<v Speaker 1>it a real hassle. You had existing services like Rhapsody,

0:26:55.640 --> 0:26:58.399
<v Speaker 1>but they required a subscription, so you couldn't just pop

0:26:58.440 --> 0:27:00.720
<v Speaker 1>on to buy the tracks you wanted, and there was

0:27:00.760 --> 0:27:03.280
<v Speaker 1>no guarantee you'd be allowed to download the track you

0:27:03.320 --> 0:27:07.160
<v Speaker 1>liked in the first place. Another similar service was called

0:27:07.200 --> 0:27:10.359
<v Speaker 1>press Play, and that was another subscription service, and you

0:27:10.400 --> 0:27:13.639
<v Speaker 1>could download songs from press Play and from Rhapsody, but

0:27:13.920 --> 0:27:17.480
<v Speaker 1>they would require you to spend an extra amount on

0:27:17.680 --> 0:27:20.760
<v Speaker 1>top of your subscription fee in order to download a track,

0:27:21.400 --> 0:27:23.840
<v Speaker 1>and Jobs pointed out, at least with press Play, if

0:27:23.840 --> 0:27:26.720
<v Speaker 1>you let your subscription lapse, you would no longer be

0:27:26.800 --> 0:27:30.880
<v Speaker 1>able to play your downloaded music. There was drm attached

0:27:30.880 --> 0:27:34.119
<v Speaker 1>to it, so that only if your subscription was current

0:27:34.200 --> 0:27:35.879
<v Speaker 1>would you be able to listen to the music you

0:27:35.920 --> 0:27:38.760
<v Speaker 1>had downloaded to your machine. You would have files on

0:27:38.800 --> 0:27:40.920
<v Speaker 1>your computer you would not be able to access, your

0:27:41.000 --> 0:27:44.240
<v Speaker 1>library would be locked off from you. No one out

0:27:44.240 --> 0:27:47.280
<v Speaker 1>there was big enough to create the sort of marketplace

0:27:47.520 --> 0:27:51.000
<v Speaker 1>where major labels could strike deals to have their catalogs

0:27:51.040 --> 0:27:54.679
<v Speaker 1>available for purchase and download. No one was offering the

0:27:54.760 --> 0:27:57.760
<v Speaker 1>software for free without the need for any sort of subscription,

0:27:58.040 --> 0:28:00.639
<v Speaker 1>and no one was giving users the free they wanted

0:28:00.680 --> 0:28:04.000
<v Speaker 1>to download songs and play them where and when they

0:28:04.040 --> 0:28:07.320
<v Speaker 1>wanted to, and that ended up being the pitch for

0:28:07.400 --> 0:28:11.399
<v Speaker 1>the iTunes Music store. On a side note, one of

0:28:11.400 --> 0:28:15.240
<v Speaker 1>the most interesting things about this two thousand three presentation,

0:28:15.560 --> 0:28:17.879
<v Speaker 1>which you can find on YouTube, by the way, is

0:28:17.920 --> 0:28:21.640
<v Speaker 1>that Jobs takes time to dismiss the idea of subscription

0:28:21.760 --> 0:28:25.800
<v Speaker 1>services for music streaming. He pointed out that for decades,

0:28:26.040 --> 0:28:29.600
<v Speaker 1>the model for consumers was to go out and buy music,

0:28:29.960 --> 0:28:34.280
<v Speaker 1>either on LP albums, cassette tapes, c D s, singles,

0:28:34.359 --> 0:28:37.440
<v Speaker 1>or whatever. He argued that this would become an intrinsic

0:28:37.600 --> 0:28:41.600
<v Speaker 1>part of how we as consumers relate to music. Were

0:28:41.680 --> 0:28:45.480
<v Speaker 1>used to owning copies of it, and therefore the subscription

0:28:45.520 --> 0:28:49.320
<v Speaker 1>model opposed how we preferred to interact with music now.

0:28:49.320 --> 0:28:53.360
<v Speaker 1>I just wanted to mention this that because today we

0:28:53.760 --> 0:28:58.000
<v Speaker 1>are back to a lot of subscription based services, that's

0:28:58.040 --> 0:29:01.800
<v Speaker 1>the new prevalent model out there, many of which have

0:29:01.960 --> 0:29:05.440
<v Speaker 1>an ad supported free tier and a paid for ad

0:29:05.560 --> 0:29:09.320
<v Speaker 1>free experience. And it's interesting that the environment Jobs was

0:29:09.400 --> 0:29:13.200
<v Speaker 1>dismissing in two thousand three is now the reality in

0:29:13.240 --> 0:29:16.040
<v Speaker 1>two thousand nineteen. And that's not to say I think

0:29:16.080 --> 0:29:18.480
<v Speaker 1>that Jobs was wrong when he said that. I think

0:29:18.520 --> 0:29:21.840
<v Speaker 1>for the time he was absolutely right, and the success

0:29:21.840 --> 0:29:26.320
<v Speaker 1>of iTunes is evidence supporting that stance. But things would

0:29:26.400 --> 0:29:30.120
<v Speaker 1>change over time. All right back to iTunes, Jobs laid

0:29:30.120 --> 0:29:34.800
<v Speaker 1>out how establishing the iTunes store was actually a pretty

0:29:34.800 --> 0:29:37.960
<v Speaker 1>tough endeavor. To make it happen, Apple had to meet

0:29:38.000 --> 0:29:40.760
<v Speaker 1>with what we're known as the Big Five. These were

0:29:40.760 --> 0:29:44.600
<v Speaker 1>the five big music labels that represented nearly the entire

0:29:44.880 --> 0:29:49.800
<v Speaker 1>music publishing industry outside of some small independent operations. He

0:29:49.920 --> 0:29:53.200
<v Speaker 1>also mentioned that at the time, tech companies and publishing

0:29:53.240 --> 0:29:56.520
<v Speaker 1>companies weren't the best of friends, largely because of the

0:29:56.560 --> 0:30:01.200
<v Speaker 1>piracy issues I just mentioned. Jobs laid the terms of

0:30:01.240 --> 0:30:04.760
<v Speaker 1>the agreement that applied to users. At the time of launch,

0:30:04.920 --> 0:30:09.080
<v Speaker 1>the music store had two hundred thousand tracks. Users would

0:30:09.120 --> 0:30:11.840
<v Speaker 1>be allowed to burn an unlimited number of c ds

0:30:12.040 --> 0:30:17.640
<v Speaker 1>of their music libraries, provided the CDs were for personal use. Now,

0:30:17.960 --> 0:30:20.280
<v Speaker 1>I'm not going to pat the music industry on the

0:30:20.280 --> 0:30:23.240
<v Speaker 1>back for this, since in the United States, in the

0:30:23.280 --> 0:30:26.280
<v Speaker 1>United Kingdom, and in lots of other places, it has

0:30:26.360 --> 0:30:29.400
<v Speaker 1>long been established that it's perfectly legal to create a

0:30:29.440 --> 0:30:32.800
<v Speaker 1>backup copy of a copyrighted work if it is for

0:30:32.840 --> 0:30:35.800
<v Speaker 1>your personal use, even if in the process of making

0:30:35.840 --> 0:30:38.840
<v Speaker 1>the backup you are transforming the way the copyrighted work

0:30:38.920 --> 0:30:41.400
<v Speaker 1>is stored. So, for example, if you have a bunch

0:30:41.440 --> 0:30:44.680
<v Speaker 1>of audio CDs, ripping those audio CDs to convert them

0:30:44.680 --> 0:30:47.800
<v Speaker 1>into m P three's is perfectly legal if it's for

0:30:47.920 --> 0:30:51.360
<v Speaker 1>personal use as a backup. But hey, it's so nice

0:30:51.400 --> 0:30:54.000
<v Speaker 1>that the labels agreed to abide by the rules. As

0:30:54.000 --> 0:30:57.280
<v Speaker 1>a concession to the music industry, Apple did put in

0:30:57.360 --> 0:31:00.600
<v Speaker 1>a governor in iTunes to prevent it from being used

0:31:00.600 --> 0:31:03.480
<v Speaker 1>to burn unlimited copies of the same set of songs

0:31:03.640 --> 0:31:06.320
<v Speaker 1>on two c D s. You could burn the same

0:31:06.360 --> 0:31:10.120
<v Speaker 1>playlist two c D ten times, but if you wanted

0:31:10.160 --> 0:31:12.040
<v Speaker 1>to do it an eleventh time, you would have to

0:31:12.160 --> 0:31:15.520
<v Speaker 1>change the playlist. In some way, you couldn't have the

0:31:15.560 --> 0:31:18.120
<v Speaker 1>exact same playlist burned on c D after c D,

0:31:18.520 --> 0:31:21.080
<v Speaker 1>and that would in theory stop people from using iTunes

0:31:21.120 --> 0:31:24.640
<v Speaker 1>to produce bootleg copies of albums, though you could just

0:31:24.720 --> 0:31:27.600
<v Speaker 1>as easily get a CD reader and a CD burner,

0:31:28.040 --> 0:31:31.400
<v Speaker 1>produce one CD using iTunes, and then churn out the

0:31:31.440 --> 0:31:36.120
<v Speaker 1>copies using the reader and burner that bypass iTunes altogether,

0:31:36.280 --> 0:31:38.479
<v Speaker 1>but that's a step that most people wouldn't really be

0:31:38.520 --> 0:31:42.440
<v Speaker 1>aware of or willing to take. Similarly, the agreement allowed

0:31:42.520 --> 0:31:46.400
<v Speaker 1>users to put their music on an unlimited number of iPods.

0:31:46.960 --> 0:31:49.960
<v Speaker 1>This future proofed music libraries. You didn't have to worry

0:31:50.040 --> 0:31:53.000
<v Speaker 1>about the new iPod coming out, but your license to

0:31:53.040 --> 0:31:55.560
<v Speaker 1>put your library on there had expired or was no

0:31:55.640 --> 0:31:59.800
<v Speaker 1>longer applicable or something. JOBS also introduced the concept of

0:32:00.000 --> 0:32:04.440
<v Speaker 1>authorizing machines to play music libraries with iTunes. For you

0:32:04.480 --> 0:32:08.440
<v Speaker 1>can load your iTunes library on up to three Mac computers.

0:32:08.960 --> 0:32:12.440
<v Speaker 1>You download to one computer, then you can burn files

0:32:12.480 --> 0:32:14.920
<v Speaker 1>to c D and transfer them to the other two

0:32:15.160 --> 0:32:18.400
<v Speaker 1>if they were bought from the iTunes Music store, but

0:32:18.640 --> 0:32:21.680
<v Speaker 1>you would be limited to those three Mac computers. If

0:32:21.680 --> 0:32:24.040
<v Speaker 1>you've got a new computer and you wanted to move

0:32:24.080 --> 0:32:26.880
<v Speaker 1>your library to the new one, you'd first have to

0:32:26.960 --> 0:32:30.400
<v Speaker 1>de authorize one of the three max already hosting those

0:32:30.480 --> 0:32:35.520
<v Speaker 1>tunes on your library. Jobs also revealed that songs would

0:32:35.600 --> 0:32:38.760
<v Speaker 1>sell for nine nine cents each and there'd be no

0:32:38.800 --> 0:32:41.680
<v Speaker 1>subscription fee on top of that. This was actually one

0:32:41.680 --> 0:32:44.240
<v Speaker 1>of the toughest battles Jobs had to fight with the

0:32:44.320 --> 0:32:48.120
<v Speaker 1>music labels, who collectively were worried that by allowing people

0:32:48.120 --> 0:32:51.280
<v Speaker 1>to buy songs all a cart the process would kill

0:32:51.320 --> 0:32:54.560
<v Speaker 1>off the concept of the record album, and record albums

0:32:54.560 --> 0:32:58.440
<v Speaker 1>were the foundation for the recorded music industry. See, people

0:32:58.480 --> 0:33:01.360
<v Speaker 1>would have to buy entire albums in order to get

0:33:01.440 --> 0:33:04.600
<v Speaker 1>two or three songs that they really wanted, and an

0:33:04.600 --> 0:33:07.960
<v Speaker 1>album could cost fifteen or twenty dollars, so the music

0:33:07.960 --> 0:33:10.520
<v Speaker 1>industry was raking in cash, and it didn't even have

0:33:10.560 --> 0:33:13.360
<v Speaker 1>to worry about making every track on an album a hit,

0:33:13.720 --> 0:33:16.280
<v Speaker 1>because really you just needed one or two to sell

0:33:16.320 --> 0:33:19.040
<v Speaker 1>the albums in the first place. You can understand why

0:33:19.040 --> 0:33:21.640
<v Speaker 1>the industry would resist the move to selling songs a

0:33:21.720 --> 0:33:24.240
<v Speaker 1>la carte the same way you could understand why music

0:33:24.320 --> 0:33:28.280
<v Speaker 1>lovers really wanted that option. Jobs was able to convince

0:33:28.320 --> 0:33:30.760
<v Speaker 1>the record labels that offering up the option to buy

0:33:30.800 --> 0:33:34.120
<v Speaker 1>songs individually would not be the end of the world,

0:33:34.480 --> 0:33:37.880
<v Speaker 1>in part because of the limitations Apple seemed to face

0:33:38.000 --> 0:33:42.040
<v Speaker 1>at the time during these negotiations. iTunes was not yet

0:33:42.080 --> 0:33:46.920
<v Speaker 1>available on Windows PCs. The Macintosh had its devoted followers,

0:33:47.160 --> 0:33:50.840
<v Speaker 1>but they represented a very small percentage of the overall

0:33:50.880 --> 0:33:55.280
<v Speaker 1>computer market. Less than ten of all computers were Mac computers, So,

0:33:55.320 --> 0:33:58.840
<v Speaker 1>in other words, Apple's impact would be so small that

0:33:58.920 --> 0:34:01.640
<v Speaker 1>even if people did by single songs, and even if

0:34:01.640 --> 0:34:04.719
<v Speaker 1>they did issue albums they decided the albums are no

0:34:04.760 --> 0:34:08.600
<v Speaker 1>longer relevant, the music labels probably wouldn't even notice. It

0:34:08.719 --> 0:34:11.439
<v Speaker 1>was too small of a group of people. Besides, file

0:34:11.520 --> 0:34:14.879
<v Speaker 1>sharing had already meant that people were downloading music song

0:34:14.960 --> 0:34:18.960
<v Speaker 1>by song, so at least with Apple's method, the labels

0:34:18.960 --> 0:34:22.200
<v Speaker 1>could make some money off of it. Another nod to

0:34:22.239 --> 0:34:24.960
<v Speaker 1>the concerns of the music industry was in the use

0:34:25.040 --> 0:34:27.920
<v Speaker 1>of digital rights management or d r M on the

0:34:28.040 --> 0:34:30.799
<v Speaker 1>music files from the iTunes store, which locked the music

0:34:30.840 --> 0:34:34.080
<v Speaker 1>onto Apple devices or computers running iTunes. Kind of talked

0:34:34.080 --> 0:34:37.239
<v Speaker 1>about that with the d authorizing. Whether Jobs was in

0:34:37.320 --> 0:34:40.200
<v Speaker 1>favor of this at the time or not, I don't know,

0:34:40.440 --> 0:34:42.480
<v Speaker 1>but I do know that over time he spoke out

0:34:42.560 --> 0:34:48.000
<v Speaker 1>against DRM, saying the strategy ultimately hurt the legitimate consumer

0:34:48.520 --> 0:34:51.280
<v Speaker 1>and that it shouldn't be used. But at the time

0:34:51.480 --> 0:34:54.399
<v Speaker 1>Apple was kind of in a place where it had

0:34:54.440 --> 0:34:58.040
<v Speaker 1>to agree to it, even if if Jobs didn't really

0:34:58.120 --> 0:35:00.920
<v Speaker 1>like it, And honestly, I don't know if that time

0:35:01.320 --> 0:35:04.480
<v Speaker 1>if Jobs had formed that opinion. Yet the songs in

0:35:04.520 --> 0:35:07.480
<v Speaker 1>the iTunes store were in a a C format encoded

0:35:07.520 --> 0:35:11.279
<v Speaker 1>at all bits per second, giving what Jobs claimed was

0:35:11.320 --> 0:35:15.040
<v Speaker 1>a sound quality to rival that of actual audio CDs.

0:35:15.640 --> 0:35:18.320
<v Speaker 1>He revealed that every song would have a free thirty

0:35:18.360 --> 0:35:21.120
<v Speaker 1>second preview so users can make sure that the song

0:35:21.200 --> 0:35:23.600
<v Speaker 1>they were buying was the one they actually wanted in

0:35:23.640 --> 0:35:26.799
<v Speaker 1>the first place, and every song would have album cover

0:35:27.000 --> 0:35:29.600
<v Speaker 1>art to come along with it, no longer making a

0:35:29.600 --> 0:35:33.000
<v Speaker 1>digital song library just a list of file names. The

0:35:33.040 --> 0:35:35.719
<v Speaker 1>crowd at the event was receptive to Jobs as announcement,

0:35:36.239 --> 0:35:38.719
<v Speaker 1>and he didn't really go into the business side on

0:35:38.760 --> 0:35:41.040
<v Speaker 1>the back end. He didn't talk about how much money

0:35:41.120 --> 0:35:44.840
<v Speaker 1>Apple would make off every sale. Generally speaking, the figure

0:35:44.920 --> 0:35:47.319
<v Speaker 1>most people cite in that regard is that Apple would

0:35:47.320 --> 0:35:52.080
<v Speaker 1>take about thirty cents off every sale. The rest would

0:35:52.120 --> 0:35:54.640
<v Speaker 1>go to the artist, or more likely to the music

0:35:54.719 --> 0:35:57.560
<v Speaker 1>label that then would pay out a portion to the artist.

0:35:58.320 --> 0:36:01.480
<v Speaker 1>Thirty cents a pop is pretty small, but Apple was

0:36:01.760 --> 0:36:04.520
<v Speaker 1>able to do the old cliche of making it up

0:36:04.560 --> 0:36:07.600
<v Speaker 1>in volume. Sure, a single purchase would net the company

0:36:07.640 --> 0:36:11.239
<v Speaker 1>three shiny dimes, but in mass, the company was looking

0:36:11.239 --> 0:36:15.840
<v Speaker 1>at millions and later on billions of dollars in revenue.

0:36:16.120 --> 0:36:18.799
<v Speaker 1>In fact, according to Apple, people bought more than a

0:36:18.840 --> 0:36:22.280
<v Speaker 1>million songs in the first week of the iTunes music

0:36:22.320 --> 0:36:25.879
<v Speaker 1>store going live. The company also stated that more than

0:36:26.000 --> 0:36:28.600
<v Speaker 1>half of those songs purchased were in the form of

0:36:28.760 --> 0:36:32.600
<v Speaker 1>album purchases, which helped allay the fears that iTunes was

0:36:32.640 --> 0:36:36.359
<v Speaker 1>going to render the concept of albums completely moot. And,

0:36:36.440 --> 0:36:40.239
<v Speaker 1>perhaps more impressively, Apple announced that more than half of

0:36:40.280 --> 0:36:43.400
<v Speaker 1>the two thousand songs that initially made available had been

0:36:43.400 --> 0:36:47.359
<v Speaker 1>purchased at least once, making three hundred grand within one

0:36:47.400 --> 0:36:51.400
<v Speaker 1>week of launching a brand new online store is pretty sweet.

0:36:51.760 --> 0:36:54.360
<v Speaker 1>But it got better for Apple because the company also

0:36:54.400 --> 0:36:58.000
<v Speaker 1>saw a big jump in iPod sales. So Apple had

0:36:58.040 --> 0:37:00.960
<v Speaker 1>just introduced the third generation I Pod and it was

0:37:01.000 --> 0:37:04.560
<v Speaker 1>a hot commodity. Now Apple was making money both off

0:37:04.600 --> 0:37:08.120
<v Speaker 1>the hardware side and the service side of digital music.

0:37:08.480 --> 0:37:11.319
<v Speaker 1>Apple had launched the store in April two thousand three

0:37:11.360 --> 0:37:14.400
<v Speaker 1>and updated it in October of that year, adding some

0:37:14.440 --> 0:37:17.040
<v Speaker 1>features like the option to buy online gift certificates for

0:37:17.080 --> 0:37:20.480
<v Speaker 1>family and friends, and also an allowance feature that let

0:37:20.560 --> 0:37:23.560
<v Speaker 1>users create sort of a music bank account. They could

0:37:23.600 --> 0:37:26.440
<v Speaker 1>put money into this allowance and that would help them

0:37:26.480 --> 0:37:29.160
<v Speaker 1>budget their entertainment purchases. So they'd say, all right, well,

0:37:29.160 --> 0:37:32.120
<v Speaker 1>I'm gonna put ten bucks aside, and that's all I

0:37:32.160 --> 0:37:34.080
<v Speaker 1>can use this month. So I'm gonna put that in

0:37:34.080 --> 0:37:36.600
<v Speaker 1>my allowance, and once that's gone, I have to wait

0:37:36.680 --> 0:37:38.960
<v Speaker 1>until the following month before I put another ten dollars

0:37:38.960 --> 0:37:41.880
<v Speaker 1>in there. It was kind of a way to control purchases.

0:37:42.400 --> 0:37:45.560
<v Speaker 1>Oh and it was also in that update that iTunes

0:37:45.600 --> 0:37:49.439
<v Speaker 1>would finally come out to the Windows PC market. Now,

0:37:49.520 --> 0:37:52.160
<v Speaker 1>as someone who got iTunes around that time for a

0:37:52.200 --> 0:37:56.040
<v Speaker 1>Windows PC, I can tell you that the effortless experience

0:37:56.120 --> 0:37:59.520
<v Speaker 1>enjoyed by the Mac users wasn't quite the same one

0:37:59.719 --> 0:38:03.640
<v Speaker 1>I had when I used iTunes, which felt like a

0:38:03.680 --> 0:38:06.960
<v Speaker 1>sluggish behemoth on my Windows machine. But we'll chat more

0:38:06.960 --> 0:38:11.439
<v Speaker 1>about the differences in the next episode. Apple was able

0:38:11.480 --> 0:38:14.160
<v Speaker 1>to get the music labels on board with this move

0:38:14.239 --> 0:38:18.640
<v Speaker 1>to Windows, largely because Jobs had user data to support

0:38:18.719 --> 0:38:21.759
<v Speaker 1>his argument. The labels saw that people were eager to

0:38:21.800 --> 0:38:25.319
<v Speaker 1>purchase music online if it was an easy experience. They

0:38:25.360 --> 0:38:28.360
<v Speaker 1>didn't have to worry about downloading a corrupted file or,

0:38:28.360 --> 0:38:31.200
<v Speaker 1>worse yet, accidentally getting a hold of malware when they

0:38:31.239 --> 0:38:34.560
<v Speaker 1>were trying to download a song. They also knew that

0:38:34.920 --> 0:38:37.799
<v Speaker 1>the quality of the recording would meet their expectations because

0:38:37.800 --> 0:38:40.320
<v Speaker 1>it was all coming from Apple and the users hadn't

0:38:40.360 --> 0:38:44.359
<v Speaker 1>ditched the concept of purchasing albums. So iTunes had made

0:38:44.360 --> 0:38:48.400
<v Speaker 1>itself a home over on Windows machines with the blessing

0:38:48.560 --> 0:38:51.279
<v Speaker 1>of the music labels, and it was a license to

0:38:51.320 --> 0:38:53.640
<v Speaker 1>print money. By the end of the year, the iTunes

0:38:53.719 --> 0:38:58.200
<v Speaker 1>music store reportedly sold more than seventy million songs. That's

0:38:58.239 --> 0:39:01.440
<v Speaker 1>a lot of music. Many factor contributed to Apple's phenomenal

0:39:01.520 --> 0:39:04.719
<v Speaker 1>growth in the two thousand's, but I don't think it's

0:39:04.800 --> 0:39:09.759
<v Speaker 1>hyperbole to say that iTunes contributed an enormous amount to

0:39:09.800 --> 0:39:12.879
<v Speaker 1>the financial success of the company. It certainly would prove

0:39:12.920 --> 0:39:15.520
<v Speaker 1>to be a powerhouse in the years to come. By

0:39:15.520 --> 0:39:18.680
<v Speaker 1>two thousand four, the music store contributed to two hundred

0:39:18.800 --> 0:39:22.840
<v Speaker 1>seventy eight million dollars in revenue from quote other music

0:39:22.960 --> 0:39:27.960
<v Speaker 1>products end quote, according to Apple's annual financial report. Now,

0:39:28.000 --> 0:39:31.960
<v Speaker 1>that category wasn't just iTunes Music Store, It also included

0:39:32.000 --> 0:39:36.640
<v Speaker 1>iPod accessories. The iPod itself was separated from that category

0:39:37.160 --> 0:39:40.720
<v Speaker 1>as well as iPod related services. Now, just to peek

0:39:40.760 --> 0:39:43.520
<v Speaker 1>into our crystal ball for a second, on the tenth

0:39:43.560 --> 0:39:46.279
<v Speaker 1>anniversary of the music store launching, that would be in

0:39:46.280 --> 0:39:51.279
<v Speaker 1>two thousand thirteen, analyst Horace, did you estimated that the

0:39:51.480 --> 0:39:57.040
<v Speaker 1>store generated revenue in excess of twelve billion dollars. Now,

0:39:57.040 --> 0:40:00.520
<v Speaker 1>I'll put that into perspective Apple the company, the whole

0:40:00.680 --> 0:40:05.400
<v Speaker 1>company reported a total revenue of eight billion dollars in

0:40:05.480 --> 0:40:09.800
<v Speaker 1>two thousand four, So a decade after launching, the iTunes

0:40:09.880 --> 0:40:13.800
<v Speaker 1>Music store was generating far more revenue than the entire

0:40:14.080 --> 0:40:18.680
<v Speaker 1>company had managed during its launch period. But we've got

0:40:18.719 --> 0:40:20.759
<v Speaker 1>some more stuff to talk about between the years two

0:40:20.800 --> 0:40:23.759
<v Speaker 1>thousand four and two thousand and thirteen, So join me

0:40:23.880 --> 0:40:27.240
<v Speaker 1>for the next episode where we'll continue the iTunes story

0:40:27.560 --> 0:40:31.360
<v Speaker 1>and how the program grew, and maybe even talk about

0:40:31.680 --> 0:40:35.719
<v Speaker 1>why it grew beyond all reason before it finally met

0:40:35.719 --> 0:40:39.200
<v Speaker 1>its end in the summer of twenty nineteen. But this

0:40:39.239 --> 0:40:42.760
<v Speaker 1>wraps up this episode. If you have suggestions for future episodes,

0:40:42.760 --> 0:40:46.200
<v Speaker 1>whether it's a company, a specific technology, a person in tech,

0:40:46.640 --> 0:40:51.080
<v Speaker 1>or any other technologically oriented topic, sent me an email

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<v Speaker 1>the addresses tech stuff at how stuff works dot com,

0:40:54.560 --> 0:40:58.239
<v Speaker 1>or drop on by our website that's tech stuff podcast

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<v Speaker 1>dot com. You'll find in our kind of all of

0:41:01.320 --> 0:41:04.320
<v Speaker 1>our episodes over there, plus links to our social media

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<v Speaker 1>presence and a link to our online store, where every

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<v Speaker 1>purchase you make goes to help the show, and we

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<v Speaker 1>greatly appreciate it, and I'll talk to you again really soon.

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<v Speaker 1>Text Stuff is a production of I Heart Radio's How

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<v Speaker 1>Stuff Works. For more podcasts from I heart Radio, visit

0:41:25.160 --> 0:41:28.279
<v Speaker 1>the I heart Radio app, Apple Podcasts, or wherever you

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<v Speaker 1>listen to your favorite shows.