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Steve Jobs’ Greatest Legacy: Persuading The World To Pay For Content

Ten years is, of course, a long time in media. Ten years ago, if you wanted to download some music, your best bet was Napster or one of the filesharing systems such as LimeWire or KaZaA.

There were legal services, but they were so dire they wouldn’t pass much muster today: there was PressPlay and MusicNet (from rival groups of record companies), which required $15 a month subscriptions for low-quality streaming (when most people had dialup connections, not today’s broadband). You couldn’t burn to CD. They were stuffed with restrictive software to prevent you sharing the songs.

What happened? Steve Jobs happened, mainly. The hardware and design team at Apple (NSDQ: AAPL) came up with the iPod (initially intended to be a way to sell more Macintosh computers), and then followed the iTunes Music Store – a great way to tie people to Apple by selling music. In 2003 Jobs persuaded the music companies – which wouldn’t license their songs to bigger names like Microsoft (NSDQ: MSFT) – to go with him because, he said, Apple was tiny (which it was, at the time). The risk if people did start sharing songs from the store was minimal, he argued. The record labels looked at Apple’s tiny market share (a few per cent of the PC market) and reckoned they’d sell about a million songs a year, so they signed up.

Apple sold a million in the first week of the iTunes Music Store being open (and only in the US). It sold 3m within a month. It’s never looked back.

Nowadays Apple sells TV shows, films, books, apps, as well as music. We take the explosion in available content for granted. But without Jobs, it’s likely we wouldn’t be here at all; his negotiating skill is the thing that Apple, and possibly the media industry, will miss the most, because he got them to open up to new delivery mechanisms.

Content companies have been reluctant to let their products move to new formats if they aren’t the inventors, or at least midwives. Witness Blu-ray, a Sony (NYSE: SNE) idea which wraps up the content so you can’t ever get it off the disc (at least in theory); or 3D films. Yet neither is quite living up to its promise, and part of that comes down to people wanting to be able to move the content around – on an iPod, iPhone, iPad or even a computer – in ways the content doesn’t allow. Apps downloaded directly to your mobile? Carriers would never have allowed it five years ago. Flat-rate data plans? Ditto. But all good for content creators.

Jobs pried open many content companies’ thinking, because his focus was always on getting something great to the customer with as few obstacles as possible. In that sense, he was like a corporate embodiment of the internet; except he thought people should pay for what they got. He always, always insisted you should pay for value, and that extended to content too. The App and Music Store remains one of the biggest generators of purely digital revenue in the world, and certainly the most diverse; while Google’s Android might be the fastest-selling smartphone mobile OS, its Market generates pitiful revenues, and I haven’t heard of anyone proclaiming their successes from selling music, films or books through Google’s offerings.

Jobs’s resignation might look like the end of an era, and for certain parts of the technology industry it is. For the content industries, it’s also a loss: Jobs was a champion of getting customers who would pay you for your stuff. The fact that magazine apps like The Daily haven’t set the world alight (yet?) isn’t a failure of the iPad (which is selling 9m a quarter while still only 15 months old; at the same point in the iPod’s life, just 219,000 were sold in the financial quarter, compared with the 22m – 100 times more – of its peak). It’s more like a reflection of our times.

So if you’re wondering how Jobs’s departure affects the media world, consider that it’s the loss of one of the biggest boosters of paid-for content the business ever had. Who’s going to replace that?

This article originally appeared in MediaGuardian.

14 Responses to “Steve Jobs’ Greatest Legacy: Persuading The World To Pay For Content”

  1. Josh Goldberg

    I think we owe Mr. Jobs credit for providing a convenient, easy way to download music legally.  With the itunes store, content was easy to find, you could preview it, and then download it almost instantly.  This system probably prevented millions of songs from being downloaded illegally, saving artists tens of millions of dollars.
    Now that users can do almost the same thing with Spotify (except that songs are only streamed, not permanently downloaded) I fear that people will never want to pay for music again.

    In the future, it seems artists will have to start being more concerned with not only the number of people who listen to their music, but the number of TIMES each person streams each song.  
    Each stream only paying a tiny fraction of a cent to the artist, which means that it takes hundreds of streams before approaching the 99 cents the itunes store charges. 
    So, my question is- are we near the end of artists seeing ANY significant profit from record sales?

  2. Steve Jobs is a genius. I enjoyed his business-savy negotiation skills and the way that he convinced some of the largest media companies in the world to follow his “pay for content” point of view. Will there ever be another mind like Jobs’? Who knows. The world of music and digital media is progressing so fast, I believe there will be.

  3. It took Apple 10 years to make huge leaps in technology: from the Macintosh to iMac, iPod, iTunes Phone, iPhone, and the iPad.  the “i” has stood to mean internet, individual, instruct, inform, inspire.  I believe that Apple creates these packaged products and makes them as desirable as possible because that is what a smart company would do. The constant churning of desirable products my have been due to Job’s brainchild but since the man is smart, I would hope he has taught his predecessors to think as he did. I would recommend checking this out:

  4. Great article! The genius of Jobs has always been so very helpful to the creative community!
    Thanks for pointing out some further contributions I had not considered! Bravo

  5. A footnote worth considering: Charles writes for Guardian, one of the few papers that at the time Apple and others were making “the world pay for content,” was vehemently against any “paywalls” as they often called payments obtained directly from the users. It was especially true during Emily Bell’s tenure as the director of digital content for Guardian.

  6. Actually, the legacy here is a little more complex. Apple made a la carte buying of digital music available to millions at a price that was a killing to any other provider. For the first 3 or 4 years, Apple was subsidizing the $0.99 price of a single tune. Apple’s biggest contribution is in making music relatively cheap and thus sending the industry down the spiral of ever lowering the prices. The result: the lowest ever amount of money an individual spends on music. Is this good?

  7. dslguru

    More revisionist history. The main reason people were sharing content all over the place is that the bandwidth became available and people had machines to play it on. In the early days no one really provided a good way to buy content electronically – so the only convenient way to get music on a computer was the usenet binaries or eventually sharing apps. If Jobs did anything it was to provide a better storefront and a better integration with the end user device. He didn’t invent paid content – he just happened to have a pretty nice device and a storefront with a good amount of content under one roof.

  8. Ah, the myth of Steve Jobs is perpetuated. Take a look behind the curtain though and you find that he was manipulative and cunning, using Apple’s marketing power to exploit the hard work and intellectual capital of others. My advice Charles, design an App and see what onerous conditions Apple places on you, then rewrite this article.

  9. Have a look through the itunes store…how many products are free, and how many are paid? If anything apple has put a downward pressure on the price of content. Making content companies have no other option BUT to go free. Apple didn’t care about the content business – naturally they’d take a ‘loss’ on content in exchange for selling more hardware – that was sort of always the goal right?

  10. Steve Jobs didn’t make anyone want to pay for music – what he did was realise that we already wanted to, and he made it easy for us. He didn’t do that good a job of it though. Bandcamp are a lot better at it.

  11. Hardly. It’s like complimenting someone on patenting white paper, convincing everyone that this is the only way to read, and then charging a license fee from every book and newspaper printed on it. It is a bad thing since it makes it even harder to sell content on grey paper… 

    Point is that Apple invented nothing, added nothing. It just sold brand, style and status. Not content. You just have to pay extra to get your otherwise free content in a stylish manner. It’s like having to pay to watch CNN on plasma TV, but getting it free on a low-def TV.

    Hmmm. On second thought, all this is is a tax on the fashionable or stupid. Isn’t it? As long as that money is used to make the content available for free to the level-headed or smart ones, I guess it’s a good thing.

    Huh, okay. Yeah Jobs, then. For now.