The Change Mariner

Stephen Jobs' View on TV Downloads: Very Different From Music

RollingStone.com:

Q: Lots people who work in the movie business have watched what's happened to the music industry and think they're next. Do you see that?

SJ: It is a problem. But movies are very different than music. First of all, they're a hundred times larger. So in countries like the U.S., where broadband is not very evolved, it takes forever to download a high-quality version of a movie. And remember that the bar is going to get raised on that quality in another four years, when we have high-definition DVDs in the market. That's going to increase the download times by another ten X. Because people's of what they want are going to go up with that.

Second, movies are not deconstructable into songs, like an album is, that are easy to download. Five minutes of a movie isn't very useful. You want the whole thing. Third, there's only been one way to buy your music -- that's on a CD. Look at the ways there are to legally buy a movie -- you can see it at the theater, you can buy it on home video, you can buy on DVD. But you can also rent it at Blockbuster or Netflix. You can watch it on pay-per-view. You can also watch it on cable or network TV. There are a lot of ways to legally get a movie. There was only one way to legally get music. That's a really big difference. The distribution is much more highly evolved in the movie industry than it ever was in the music industry.

Now, all this doesn't mean that piracy isn't taking place in movies -- because it is. And that doesn't mean that it's good -- because it's not. But because of all those factors, people who just make the leap that movies are next are wrong. It may take a different path.

...

Q: Apple has had a head start in the digital music business, but obviously lots of other companies are getting into it now too. Last week, for example, Dell come out with it iPod-clone, the Dell DJ.

SJ: We will ship way more digital music players than Dell this quarter. Way more. In the long run, we're going to be very competitive. We beat Dell on operational metrics every quarter. We are absolutely as good of a manufacturer as Dell. Our logistics are as good as Dell's. Our online store is better than Dell's. And we have retail channels. Most people don't want to buy one of these things through the mail. Dell is going to have to sell that thing retail if they are going to succeed. Their distrubution model works against them when they get into consumer electronics. Like they're going to be selling plasma TVs online. Would you ever buy a plasma TV without seeing it? No way.

And then there's Microsoft. What happens to Apple when they build an iTunes-clone into the Windows desktop?

I think Amazon does pretty well [against Microsoft]. Microsoft hasn't really been able to compete with them -- maybe not wanted to. EBay does pretty well; Google's done pretty well. Actually, AOL's done pretty well -- contrary to a lot of the things people say about them. So there are a lot of examples of people offering services, Internet-based services, that have done quite well.

And Apple's in a pretty interesting position. Because, as you may know, almost every song and CD is made on a Mac -- it's recorded on a Mac; it's mixed on a Mac. The artwork's done on a Mac. Almost every artist I've met has an iPod, and most of the music execs now have iPods. And one of the reasons Apple was able to do what we did was because we are perceived by the music industry as the most creative technology company. And now we've created this music store, which I think is nontrivial to copy. I mean, to say that Microsoft can just decide to copy it, and copy it in six months -- that's a big statement. It may not be so easy.

Q: Despite the wonders of digital music services, a lot of musicans and listeners worry it's killing the album as an art form.

A: We've heard both sides of it. Most of the successful artists have carve-outs in their contract for the distribution of music online by their record company. And so even though we could convince, let's say, Universal Music, the largest, to do a deal with us for the iTunes Music Store, they were not able to offer us their top 20 artists. All music companies were like this. We had to go to the individual artists, one by one, and convince them, too. And we did, and they trusted us.

Now, there were a few who said: We don't want to do that -- and we respect that. They said: We will let you distribute our albums as a whole, but not individual tracks. And we declined. We said: You know, our store is about giving the user that choice. And what's happened is that half the songs we've sold, approximately -- about half have been as albums ... and the other half have been individually. I think there's a much higher proportion of sales of songs as albums than anyone thought. We thought it was gonna be around a quarter, but it's around a half.

But for every one of those, we've talked to, probably three or four artists who've said: You know, this is the best thing in the world. Because I don't want to have to wait 18 months to get together a dozen songs to make an album to get in front of my audience.

Q: When is Apple going to start signing musicians - in effect, become a record label?

SJ: Well, it would be very easy for us to sign up a musician. It would be very hard for us to sign up a young musician that was successful. Because that's what the record companies do. Their value is in picking that 1 out of 5,000. We don't do that.

We think there's a lot of structural changes that are probably gonna happen in the record industry, though. We've talked to a large number of artists that really don't like their record company, and I was curious about that. And the general reason they don't like the record company is because they think they've been really successful, but they've only earned a little bit of money.

Q: Do you see a time when a version of the iPod will become more important to Apple than the Mac itself?

SJ: Well, Apple has a core set of talents, and those talents are: We do, I think, very good hardware design; we do very good industrial design; and we write very good system and application software. And we're really good at packaging that all together into a product. We're the only people left in the computer industry that do that. And we're really the only people in the consumer-electronics industry that go deep in software in consumer products. So those talents can be used to make personal computers, and they can also be used to make things like iPods. And we're doing both, and we'll find out what the future holds.

Q: You're well-known as being a technological optimist. Do you still feel as hopeful about what technology has done for us as a culture as you did, say, twenty years ago?

Oh, yeah. I think it's brought the world a lot closer together, and will continue to do that. There are downsides to everything; there are unintended consequences to everything. The most corrosive piece of technology that I've ever seen is called television -- but then, again, television, at its best, is magnificent.

Q: Why do you call television the most corrosive of technology you've ever seen?

Because the average American watches five hours a day of television, and television is a passive medium. Television doesn't turn your brain on. Or, television can be used to turn your brain off, and that's what it's mostly used for. And that's a wonderful thing sometimes -- but not for five hours a day.

Posted by Norm M. Wada at December 12, 2003 10:40 AM | TrackBack
Related Categories: Deep Dive - 'The Future of TV & Film' | Industry - Entertainment - Film | Industry - Entertainment - Music | Industry - Entertainment - TV | Industry - Internet | Theme - 'Digital Impact'

Amazon Price:

Amazon Price: