Historical Note: The Day Steve Jobs Dissed CDBaby

from the quality-songs dept

Derek Sivers recently had a wonderful post over at the Music Think Tank blog about the day Steve Jobs “dissed” him in a keynote speech. The full story is absolutely worth reading (Sivers, as always, is a wonderful story teller), but the short version is that a bunch of folks who represented independent musicians were invited to Apple soon after the original iTunes store launched (with mainly major label music). They weren’t told they were meeting with Steve Jobs, but he showed up, telling them that the plan was to get “every piece of music ever recorded” into the iTunes store. Apple folks then showed everyone in the room how to upload tracks, and Sivers seemed disappointed that he wouldn’t be able to just use the tracks they already had available, but would have to re-rip and re-enter data:

Then they showed the Apple software we?d all have to use to send them each album. It required us to put the audio CD into a Mac CD-Rom drive, type in all 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 of the info carefully entered by the artist themselves, ready to send to their servers with their exact specifications. They said sorry – you need to use this software – there is no other way.

Ugh. That means we have to pull each 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.

After the meeting, Sivers wrote up the notes he took from the meeting and posted them to his blog… only to get angry messages from people at Apple about how the meeting was confidential (something Sivers claims he was never told). Either way, they got the contract from Apple, signed it immediately, and got to work. In realizing they had to rip and upload 100,000 CDs all over again, and that it was going to be costly, they asked CDBaby musicians to pay $40 to get their songs onto iTunes. Because of the iTunes activity, all the other major music services also asked for all of CDBaby’s music as well — Rhapsody, Yahoo Music, Napster and eMusic. Apparently 5,000 musicians paid the $40 and CDBaby started ripping all those CDs.

They ripped and ripped and ripped… and at some point realized that Apple had never returned the contract. Months went by. Sivers contacted Apple… and nothing. Finally, five months later, Steve Jobs did a keynote where he announced that iTunes was doubling the number of tracks available, from 200,000 to 400,000… and in the middle, he made a crack about how they were trying to be selective, focusing on quality, rather than quantity, and specifically noting that anyone could just pay $40 to have music uploaded to competing sites, but that Apple only wanted the best. Sivers realized: “Whoa! Wow. Steve Jobs just dissed me hard! I’m the only one charging $40. That was me he’s referring to.” You can see the clip below:

Sivers took this to mean that, despite Jobs’ original statements about wanting all songs in iTunes, this meant he no longer wanted independent music. Following the speech, he sent around a note telling everyone he was refunding the $40 fees, giving back the $200,000 — much of which had been spent.

The very next day? CDBaby received the signed contract from Apple with details about how to upload their 500,000 tracks.

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Companies: apple, cdbaby

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Comments on “Historical Note: The Day Steve Jobs Dissed CDBaby”

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Mike Masnick (profile) says:

Re: Re:

What portion of the content on this site doesnt come from reddit?

1. I don’t actually read Reddit much, so, if it’s coming from there, well, that’s coincidental.

2. All the content on Reddit comes from somewhere else to, you know.

3. All of the content on this site comes from elsewhere. I write about things I find interesting on other sites. I did not realize there was a rule that if content appears on Reddit, I am not allowed to talk about it.

4. All of my posts involve me writing up the details, including some analysis. In my experience Reddit is just a link.

5. Who cares? Seriously. Who honestly cares?

Phatnobody (profile) says:

CDBaby looked like it was profiteering

Anyway, back on topic.

From Apple’s perspective, I wonder if the lack of contracto arose because it may have appeared that CDBaby was trying to profit from the iTunes deal by charging all their artists $40 to be included in the upload.

We know that is not the case with hindsight (although $40 to rip a CD – Really?) but from where Apple stood – they saw a guy break a confidentiality notice (through a mistake or miscommunication) and then start charging. I could see why Jobs might be a little pissed off with that not being in charge of all the facts.

As soon as CDBaby offered to return the $40 they were in.

Miscommunication or lack of communication on one or both sides makes this look worse than it probably needed to be.

Damn, Apple and their secrecy leads to so many problems, they really need to improve the balance between total control and customer/partner satisfaction.

vivaelamor (profile) says:

Re: CDBaby looked like it was profiteering

“I wonder if the lack of contracto arose because it may have appeared that CDBaby was trying to profit from the iTunes deal by charging all their artists $40 to be included in the upload.”

Funny how Steve Jobs was emphasising how cheap $40 is then.

“We know that is not the case with hindsight (although $40 to rip a CD – Really?)”

The article says $40 per artist. Considering one album can cost $20 just to buy a copy, $40 to properly format shift an artists entire collection seems potentially cheap.

“As soon as CDBaby offered to return the $40 they were in.”

Is Apple really that passive aggressive? ‘We’ll penalise you but won’t tell you what we’re doing or why, maybe you’ll get lucky and guess’.

fairuse (profile) says:

Did I ever say iTunes drives me crazy?

I remember that presentation. Had to find an antacid after watching it. That said, of course CDBaby was dissed. Reason? Mr. Jobs handles competition with that sort of attack. CDBaby was simply doing a service for the artist at “cover the expense of handling not labor of making price”, as I understand it.

There is a reason CDBaby is the first place I go when I want hard copy. The price point is good for disk format (uncompressed audio) and it has a fair price on MP3s. Amazon is 2nd because of inventory of disks and has an ok price on MP3. There is no number three, unless it is all the other sources lumped together. I don’t buy music on itunes (DRM used as marketing tool to get a higher price and product mix).

For anyone that has “Iron Man 2” listen to the commentary audio over the credits and then tell everyone the consumer market will be download or streaming movie format because Hollywood is not going the iTunes way. The physical CD/DVD distribution channel is not going to be mass market but will be seen in the same light as vinyl is seen today. It will be a slow and painful transition.

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