The Day Steve Jobs Dissed Me In A Keynote [Video]

It was October 2003 and Steve Jobs was on stage for a different worldwide simulcast keynote speech about iTunes. About four minutes into the presentation, he said something that made my pounding heart sink to my burning stomach.

In May 2003, Apple invited me to their headquarters to talk about getting CD Baby ‘s catalog into the iTunes Music Store.

iTunes had just launched two weeks before, with only a few music from the key labels. Many people within the music biz were unsure this concept was going to work. Especially folks that had seen companies like eMusic do that exact same model for years without big success.

I flew to Cupertino thinking I’d be meeting with one of their marketing or tech people. Once I arrived, I discovered that about a hundred people from small record labels and distributors had also been invited.

We all went into a bit presentation room, not knowing what to expect.

Then out comes Steve Jobs. Whoa! Wow.

He was in full persuasive presentation mode. Seeking to convince everyone to offer Apple our entire catalog of music. Talking about iTunes success up to now, and all of the reasons we must always work with them.

He really made some extent of asserting, ” We want the iTunes Music Store to have each piece of music ever recorded. Despite the fact that it’s discontinued or not selling much, we would like it all.”

This was huge to me, because until 2003, independent musicians were always denied access to the gigantic outlets. For Apple to sell all music, not just artists who had signed their rights away to a company, this was amazing!

Then they showed the Apple software we’d all should use to send them each album. It required us to place the audio CD into a Mac CD-Rom drive, type in each of the album info, song titles and bio, then click [encode] for it to rip, and [upload] when done.

I raised my hand and asked if it was required that we use their software. They said yes.

I asked again, saying we had over 100,000 albums, already ripped as lossless WAV files, with all the info carefully entered by the artist themselves, able to send to their servers with their exact specifications. They said sorry – you should use this software – there’s no wrong way.

Ugh. Which means we’ve to drag every one of those CDs off of the shelf again, stick it in a Mac, then cut-and-paste every song title into that Mac software. But so be it. If that’s what Apple needs, OK.

They said they’d be ready for us to start out uploading inside the next couple weeks.

I flew home that night, posted my meeting notes on my website, emailed all of my clients to announce the inside track, and went to sleep.

When I woke, I had furious emails and voicemails from my contact at Apple.

” What the hell are you doing? That meeting was confidential! Take those notes off your site immediately! Our legal department is furious!”

There was no mention of confidentiality at the meeting and no agreement to sign. But I removed my notes from my site immediately, to be nice. (You’ll discover still a duplicate someone posted here .)

All was well, or so I assumed.

Apple emailed us the iTunes Music Store contract. We immediately signed it and returned it an identical day.

I started building the system to deliver everyone’s music to iTunes.

I decided we’d need to charge $40 for this service, to cover our bandwidth and payroll costs of pulling each CD out of the warehouse, entering the entire info, digitizing, uploading, and putting it back within the warehouse.

5000 musicians signed up beforehand, each paying $40. That $200,000 helped pay for the extra equipment and folk needed to make this happen.

Within two weeks, we got contacted by Rhapsody , Yahoo Music , Napster , eMusic , and more – each saying they wanted our entire catalog.

Yes! Awesome!

Maybe one can’t appreciate this now, but the summer of 2003 was the most important turning point that independent music has ever had. Until that point, almost no big business would sell independent music. (That’s why I had to start out CD Baby, because nobody would sell my music.)

By iTunes saying they wanted everything, then their competitors needing to maintain, we were in! Since the summer of 2003, every musician everywhere can sell all their music in almost every outlet online. Do you realize how amazing this is?

But there was one problem.

iTunes wasn’t getting back to us.

Yahoo, Rhapsody, Napster and the remaining were all up and running. But iTunes wasn’t returning our signed contract.

Was it because I posted my meeting notes?

Had I pissed-off Steve Jobs?

Nobody at Apple would say anything. It have been months.

My musicians were getting impatient and angry.

I gave optimistic apologies, but I was beginning to get worried, too.

Then in October, Steve Jobs did a unique worldwide simulcast keynote speech about iTunes.

People have been criticizing iTunes for having less music than the competition. They’d 300,000 songs while Rhapsody and Napster had over 2 million songs. (Over 500,000 of those were from CD Baby.)

Four minutes in, he said something that made my pounding heart sink to my burning stomach:

” This number can have easily been much higher, if we needed to let in every song. But we realize record companies do a good service. They edit! Were you aware that in case you and I record a song, for $40 we will pay many of the services to get it on their site, through some intermediaries? We will be on Rhapsody and most of these other guys for $40? Well we don’t would like to let that stuff on our site! So we’ve had to edit it. And these are 400,000 quality songs.”

( Watch the video, here .)

Whoa! Wow. Steve Jobs just dissed me hard!

I’m the simplest one charging $40. That was me he’s concerning.

Shit. OK. That’s that. Steve changed his mind. No independents on iTunes. You heard the guy.

I hated the location this put me in.

Ever since I started my company in 1998, I were offering a brilliant service. I may make promises and keep them, because I was in full control.

Now, for the first time, I had made a promise for something that was out of my control.

So it was time to do the ideal thing, despite how much it hurt.

I decided to refund everybody’s $40, with my deepest apologies. With 5000 musicians signed up, that meant I was refunding $200,000.

Since we couldn’t promise anything, I couldn’t charge money in good conscience.

I removed all mention of iTunes from my site.
I removed the $40 cost to make it free.
I changed the language to assert we are able to’t promise anything.
I emailed everyone to let them know what had happened.

I decided to make it a free service from that point on.

The next day, we got our signed contract back from Apple, in conjunction with upload instructions.

Unbelievable.

We asked, ” Why now?” , but got no answer.

Whatever. Fucking Apple.

We started encoding and uploading immediately.

I quietly added iTunes back to the list of companies on our site.

But I never again promised a customer that i’ll do something beyond my full control.

Derek Sivers is healthier referred to as the founder of CD Baby. a certified musician (and circus clown) since 1987, Derek started CD Baby accidentally in 1998 when he was selling his own CD on his website, and friends asked if he could sell theirs, too. CD Baby was the biggest seller of independent music on the net, with over $100M in sales for over 150,000 musician clients. After he won the 2003 World Technology Award, Esquire Magazine’s annual ” Best and Brightest” cover story said, ” Derek Sivers is changing the way in which music is bought and sold… one of several last music-business folk heroes.” In 2008, Derek sold CD Baby to spotlight his new ventures to profit musicians, including his new company MuckWork where teams of efficient assistants help musicians do their ” uncreative dirty work” . His current projects and writings are all at sivers.org and on his blog . While you’d desire to keep close track of Derek, that you can follow him on Twitter .

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This post is tagged: independent musicians, itunes music store, persuasive presentation, presentation mode, presentation room