Benjamin franklin and albert einstein, this is the exclusive biography of steve jobs

CHAPTER THIRTY-ONE
THE iTUNES STORE
I’m the Pied Piper
Warner Music
At the beginning of 2002 Apple faced a challenge. The seamless connection between your iPod, 
iTunes software, and computer made it easy to manage the music you already owned. But to get 
new music, you had to venture out of this cozy environment and go buy a CD or download the 
songs online. The latter endeavor usually meant foraying into the murky domains of file-sharing 
and piracy services. So Jobs wanted to offer iPod users a way to download songs that was simple, 
safe, and legal.
The music industry also faced a challenge. It was being plagued by a bestiary of piracy 
services—Napster, Grokster, Gnutella, Kazaa—that enabled people to get songs for free. Partly as 
a result, legal sales of CDs were down 9% in 2002.
The executives at the music companies were desperately scrambling, with the elegance of 
second-graders playing soccer, to agree on a common standard for copy-protecting digital music. 
Paul Vidich of Warner Music and his corporate colleague Bill Raduchel of AOL Time Warner 
were working with Sony in that effort, and they hoped to get Apple to be part of their consortium. 
So a group of them flew to Cupertino in January 2002 to see Jobs.
It was not an easy meeting. Vidich had a cold and was losing his voice, so his deputy, Kevin 
Gage, began the presentation. Jobs, sitting at the head of the conference table, fidgeted and looked 
annoyed. After four slides, he waved his hand and broke in. “You have your heads up your asses,” 
he pointed out. Everyone turned to Vidich, who struggled to get his voice working. “You’re 
right,” he said after a long pause. “We don’t know what to do. You need to help us figure it out.” 
Jobs later recalled being slightly taken aback, and he agreed that Apple would work with the 
Warner-Sony effort.
If the music companies had been able to agree on a standardized encoding method for 
protecting music files, then multiple online stores could have proliferated. That would have made 
it hard for Jobs to create an iTunes Store that allowed Apple to control how online sales were 
handled. Sony, however, handed Jobs that opportunity when it decided, after the January 2002 
Cupertino meeting, to pull out of the talks because it favored its own proprietary format, from 
which it would get royalties.
“You know Steve, he has his own agenda,” Sony’s CEO Nobuyuki Idei explained to 
Red 
Herring
editor Tony Perkins. “Although he is a genius, he doesn’t share everything with you. This 
is a difficult person to work with if you are a big company. . . . It is a nightmare.” Howard 
Stringer, then head of Sony North America, added about Jobs: “Trying to get together would 
frankly be a waste of time.”
Instead Sony joined with Universal to create a subscription service called Pressplay. 
Meanwhile, AOL Time Warner, Bertelsmann, and EMI teamed up with RealNetworks to create 
MusicNet. Neither would license its songs to the rival service, so each offered only about half the 
music available. Both were subscription services that allowed customers to stream songs but not 
keep them, so you lost access to them if your subscription lapsed. They had complicated 
restrictions and clunky interfaces. Indeed they would earn the dubious distinction of becoming 
number nine on 
PC World
’s list of “the 25 worst tech products of all time.” The magazine 
declared, “The services’ stunningly brain-dead features showed that the record companies still 
didn’t get it.”

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At this point Jobs could have decided simply to indulge piracy. Free music meant more valuable 
iPods. Yet because he 
really
liked music, and the artists who made it, he was opposed to what he 
saw as the theft of creative products. As he later told me:
From the earliest days at Apple, I realized that we thrived when we created intellectual property. If 
people copied or stole our software, we’d be out of business. If it weren’t protected, there’d be no 
incentive for us to make new software or product designs. If protection of intellectual property begins to 
disappear, creative companies will disappear or never get started. But there’s a simpler reason: It’s 
wrong to steal. It hurts other people. And it hurts your own character.
He knew, however, that the best way to stop piracy—in fact the only way—was to offer an 
alternative that was more attractive than the brain-dead services that music companies were 
concocting. “We believe that 80% of the people stealing stuff don’t want to be, there’s just no 
legal alternative,” he told Andy Langer of