The Tao Of Steve
1. Picking the right horse.
"Apple is a company that doesn’t have the resources that everyone else has. We choose what tech horses to ride, we look for tech that has a future and is headed up. Different pieces of tech go in cycles… they have summer and then they go to the grave."
This is in response to the Flash question. But then Steve goes on to cite that they killed serial and parallel ports, even got rid of optical drives on the MacBook Air and were the first with the 3 1/2 inch floppy, which they ultimately killed with the initial iMac.
In other words, what horse is the music industry betting on?
For a decade, the industry has been trying to prop up the CD and the album, when it’s clear, like Flash, both are headed to the graveyard, because both have been superseded by digital delivery. Online you buy just what you want, doesn’t mean you can’t buy a plethora of tracks, but the idea of an album of ten tracks as the basic unit makes no sense.
Now we’re moving to the cloud, the concept of ownership will evaporate. Don’t listen to what Steve says, he likes that iTunes revenue, he likes that everybody is buying their music from Apple, otherwise why fight Amazon and its deep discounts? But he mostly cares about keeping customers in the Apple ecosystem.
You don’t fight Apple by creating a competitor to iTunes track sales, that’s like fighting the 3 1/2 inch floppy with a 1 1/2 inch floppy. If you want to fight Jobs, you’ve got to come up with a better cloud solution than Apple. And so far, the industry is fighting this, playing right into Jobs’ hands. By refusing to authorize Spotify in the USA, by refusing to enable subscription services to compete with Apple, rights holders are insuring we go to a per track ownership model online. Think about that, that’s exactly what the cable industry is fighting, they don’t want to let you cherry-pick shows, they want you to buy the whole enchilada. If cable capitulated, the price of service would go up, just like the price of digital singles went up. Ultimately, killing the golden goose. Sure, short term revenue may be slightly up, but you’re training people to look at price, to not consume. Whereas cable customers don’t think about price when selecting a show, they just watch, they confront price just once a month, when the bill comes. We need to bill once a month in the music industry, not for every track.
If rights holders want Apple to control the future of the music industry, they should do nothing. If they want competitors, they must license cloud-based subscription services at a low rate. It’s their only hope.
2. Go on record and be accessible.
"We weren’t trying to have a fight, we just decided to not use one of their products. They made a big deal of it — that’s why I wrote that letter. I said enough is enough, we’re tired of these guys trashing us."
You can’t get a single music industry bigwig to go on the record. Could it be that their position is indefensible? Come up with solutions, lead the public, don’t try to convince people to go back to the past.
"You emailed Valleywag…"
The most famous executive in the world, controlling the number one tech company in America, reads and responds to his e-mail.
It’s about a dialogue.
Assuming the people on the other side are rational.
You don’t have to kowtow in your responses. You can be honest. But you’ve got to have a good position to advocate.
3. Admit your mistakes.
"We never saw ourselves in a platform war with Microsoft, and maybe that’s why we lost."
The public is fascinated by the Redmond/Cupertino battle. By admitting Apple lost in the desktop world, the point becomes moot, everybody moves on.
Blow out CDs. Blow out tracks at the iTunes Store. Move everybody to the future, in the cloud.
Meanwhile, admit you played it wrong for a decade.
4. Quality rules.
"We want to make better products then them. What I love about the marketplace is that we do our products, we tell people about them, and if they like them, we get to come to work tomorrow."
He with the best music wins. We’ve known that forever.
Then again, marketing matters. Just look at GaGa and Justin Bieber. The key is to establish trust and then sell on this trust. That’s what Richard Russell has done at XL, that’s what kills the major labels, they say everything they sell is great and lose their credibility. Don’t go for the short term money, go for the long haul.
5. Volume is where it’s at.
"Price it aggressively and go for volume."
The music industry refuses to learn this lesson, all under the banner of "the value of music". What’s the value of a computer, or an iPod? Come on, being able to take all your music with you on a hand-held device…isn’t that worth thousands? But if you price it that way, no one will buy.
CDs should have been ten bucks ten years ago. They should be five now. MP3s should be a dime, since they’re on their way out.
6. Everybody’s equal.
"You know how many committees we have at Apple? Zero. We’re organized like a startup."
Isn’t it funny that perennially successful Interscope has no titles?
Sure, it’s almost an Iovine dictatorship, but imagine if you empowered everybody in the company, instead of dictating and firing them. You don’t have to be CEO to have a good idea. Then again, being surrounded by the egos of the acts, executives like to believe they’re big kahunas too. This blinds you. You’ve got to be secure enough to admit what you don’t know. The role of an executive is to steer the ship, to correct mistakes, not to micro-manage.
7. Constantly improve the user experience.
"Ads now rip you out of your app, you lose your place. Wouldn’t it be great if they didn’t do that?"
Just try and buy a ticket. Then you know we’re not respecting the consumer in the music business.
8. The end user is your customer.
"When we went to music companies, we said who is your customer… they said Target, and Best Buy — they thought the retailer was the customer. What changed in that industry was the front end, the distribution and marketing was able to be done in a much more effective way, going right to the end user."
To this day, rights holders believe the retailer and the radio station are their customers, and this hampers them as both lose influence and power. Bond with the customer, he’s the one with the wallet, and online you can reach him…and maintain the relationship (and isn’t it funny that acts do this but labels don’t, their websites are shite.)
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Smart is the new hit single, the new draw. You believe Jobs has thought about these issues and you want more, more, more. You don’t want much from today’s musicians. Focusing on the dollar first and foremost, they’ll do whatever’s expedient to extricate dollars from your wallet. Acts get no respect, which is why they don’t last.
As for middling or developing acts… Apple used to be in that business. It only went mainstream when it leapfrogged everybody else. In other words, can you come up with what people don’t know they want? And furthermore, can you insure that most people want it? That’s what Apple did. That’s the challenge of not only the companies in the music industry, but the acts.
