iTunes hoists the Jolly Roger - East Valley Tribune: Business

iTunes hoists the Jolly Roger

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Posted: Monday, May 12, 2003 12:05 pm | Updated: 1:34 pm, Thu Oct 6, 2011.

CUPERTINO, Calif. - Allen Evans of Middlesex, Vt., is no stranger to digital music. About two-thirds of his music collection comes from free copies on file-swapping networks. The remainder was ripped from CDs he and his family already owned.

Recently, Evans downloaded four songs — and gladly paid for them.

The 19-year-old’s purchases, along with 1 million other tracks sold in the first week of business for Apple Computer’s online music store, mark a refreshing turn of events for the ailing music industry.

Steve Jobs, Apple’s chief executive and the closest thing Silicon Valley has to a rock star, has succeeded in a major coup, forcing tectonic change in an industry notorious for its dinosaur pace and dragon tactics.

At 99 cents a download with virtually no restrictions on how and where the songs can be played, Apple’s service for Macintosh users is proving to be the most promising alternative yet to free, pirated music.

‘‘The hardest part was to convince the labels that 99-cents-a-download is a legitimate business, and Apple did that work already,’’ said Josh Bernoff, an industry analyst at Forrester Research.

‘‘If it weren’t for Steve Jobs’ persistence, I don’t think this would have happened,’’ said Hilary Rosen, chief executive of the Recording Industry Association of America and its most vocal piracy fighter.

Over 18 months, Jobs and a small team of high-level Apple employees negotiated the deals with Universal, Warner, BMG, EMI and Sony Music Entertainment. At times, Jobs personally demonstrated the music service to persuade the Eagles, Dr. Dre, Sheryl Crow and other reluctant artists to come aboard.

Jobs hit the right chord with artists and with some of the very record executives who had, two years ago, accused him of encouraging piracy.

Rosen said Jobs sold them on the elegance and simplicity of the iTunes Music Store design. He persuaded them, she said, to bet on his strong belief that consumers want to ‘‘own’’ the music they download — instead of see songs disappear from their computers under existing subscription-based services.

Because Apple commands less than 3 percent of the desktop computer market, the iTunes Music Store amounts to a trial run, Rosen said.

More importantly, Jobs struck at the right time.

After two years of declining CD sales, unabated online piracy and lukewarm consumer interest for its own online subscription services, the industry was ready for something new.

Jobs, who also runs the Pixar Animation Studios behind such hits as the ‘‘Toy Story’’ movies, ‘‘had the integrity and talent, with the experience of movie and songs and technology,’’ said Jimmy Iovine, chairman of Interscope Geffen A&M, part of Universal Music Group.

Jobs’ success is encouraging to competitors and wannabes, especially those that serve the Windows market, which Apple says the iTunes Music Store won’t serve until later this year.

‘‘If he’s the one that gets the game going — great,’’ said Dan Hart, chief executive of Echo, a joint venture of Tower Records, Best Buy and four other retail chains that plans to mirror Apple’s payper-song model in the larger Windows world.

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