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iTunes Music Store Introduction – Apple Special Event (2003)


Historic keynote in which Steve Jobs introduced the iTunes Music Store, changing forever the way people get their music.

When Steve Jobs announced the iTunes Music Store, the shift to digital music was already started. But no existing solutions were compelling enough for users to drop their music CDs in favor of mp3s. It was a complex world of Digital Right Management and small online music portfolios. It sucked.

iTunes Music Store keynote summary

Apple iPod 3rd generation 2003

iPod 3rd generation were also introduced.

00:00. Update on Apple and music
06:30. New iPods (3rd gen) & demo
15:18. iTunes 4 & demo
20:17. Online music alternatives
25:16. iTunes Music Store introduction
32:23. iTunes Music Store demo
55:48. iTunes Music Store video iTunes (with Iann Robinson)
1:02:46. iTunes Music Store TV Ads

Date: April 28, 2003
Location: Apple Town Hall, Cupertino
Steve was 48 years old.

The iTunes Music Store impact

The iTunes Music Store single handedly changed the business landscape of the music industry. It’s one of the most important Apple product ever introduced. (Watch Apple’s top 10 product announcements)

The revolutionary store allowed users to quickly find, purchase and download the music they wanted for just 99 cents per song. Steve Jobs accurately prophesied:

Consumers don’t want to be treated like criminals and artists don’t want their valuable work stolen. The iTunes Music Store offers a groundbreaking solution for both.

iTunes Music Store Sales

iTunes Music Store impressive growth. (click to enlarge)

Initially, the iTunes Music Store featured only 200,000 songs from the big 5 music companies: BMG, EMI, Sony Music Entertainment, Universal and Warner. That’s a far cry from the 26 millions songs available today (2013). And it only worked on the Mac until a few years later when a Windows version was released. With millions of songs in its catalog, it quickly became the best place to find music and overtook WallMart as the #1 music store in the world.

The ability to browse the entire music store by genre, artist and album combined with a free 30-second high-quality previews of every song was amazing. It let users explore music in an entirely new way, to easily find the hits they loved and discover gems they’ve never heard before.

The iTunes Music Store helped Apple sell more iPods and brought the Apple brand in contact with even more people. One didn’t need to own an Apple product to purchase songs.

The lessons learned with the iTunes Music Store served Apple to start many other online activities and products. It’s responsible for the creation of the Apple TV. But more importantly, the creation of the App Store.

The Story behind the iTunes Music Store

Note: The following story is an excerpt of Jon Snyder’s article on Wired.com. It’s based on the book “The Perfect Thing: How the iPod Shuffles Commerce, Culture and Coolness” written by Steven Levy and available on Amazon.com

Between the mid-1980s and late 1990s, the media were undergoing a massive conversion from analog to digital. The music industry hated it.

Shawn Fanning founder of Napster

Online Music Celeb: Shawn Fanning founder of Napster

Much to the chagrin of the Recording Industry Association of America, internet users quickly caught on to digital music as a free alternative to paying for albums. In fear of declining album sales, record labels filed lawsuit after lawsuit against online services Napster and MP3.com for hosting digital music. Clearly for the recording industry, change wasn’t easy.

In stepped Steve Jobs. The Apple CEO harbored a vision in 2002 of an online music store hosted by Apple that would be easy to use, complete in selection and reliable in performance. These factors, Jobs thought, would be enough to convince customers to pay for something they could otherwise obtain for free illegally. The store, then, would enable record labels to compete with pirates rather than pursue a futile attempt to destroy them.

But in order for online music to work, Jobs believed his store would have to allow customers to purchase music in a completely different way: a la carte. Convincing labels was hardly easy.

“When we first approached the labels, the online music business was a disaster,” Jobs told Steven Levy, author of The Perfect Thing. “Nobody had ever sold a song for 99 cents. Nobody really ever sold a song. And we walked in, and we said, ‘We want to sell songs a la carte. We want to sell albums, too, but we want to sell songs individually.’ They thought that would be the death of the album.”

Jobs started his talks with the big players first: Warner Music and Universal. Apple flew the firms’ teams up to Cupertino, California. In a boardroom at One Infinite Loop, Jobs proceeded to present his plan.

iTunes Music Store Introduction Keynote

Rip. Mix. Burn baby Burn.

Jobs first reeled in the labels with one crucial proposal: Apple would sell songs through iTunes, music-player software that was then available only for Macs. After all, how could Apple, whose Mac operating system held only single-digit market share, ruin the record business if the iTunes Store took off?

After a series of long and painful negotiations, the two labels ultimately agreed they would play, but only after Apple agreed to bake in some restrictions (aka digital rights management): iTunes-purchased songs would be limited to being playable on three “authorized” computers, and a playlist could only be burned on a CD seven times.

Watch one of the original iTMS TV ad

Labels BMG and EMI soon followed, and later Sony hopped on board. Apple opened the iTunes Music Store on April 28, 2003, with 200,000 songs. (Simultaneously, Apple released its third-generation iPod.) In the first week, iTunes Store customers bought more than a million songs. Six months later, Apple convinced the labels to allow iTunes to be shared with Windows users.

By now,The iTunes Store has expanded to include movies, TV shows and the App Store providing third-party software for iPhone, iPod Touch and iPad customers. To date, the iTunes Store has served more than 25 billion songs!

iTunes on iPad and iPhone