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Jobs set course forward for music, movies, books

Thu, 10/06/2011 - 2:05pm
RYAN NAKASHIMA - AP Business Writer - Associated Press

Steve Jobs made it easy for people to entertain themselves on high-tech devices, and he unveiled gadget after gadget with an effortless touch. But away from the bright lights of the stage, Jobs was a tough negotiator who took turns charming and berating potential business partners to pull off his latest act.

The influential co-founder of Apple Inc., who died Wednesday at 56, combined persuasion and power to shoehorn content into devices. He rattled existing business models and became a headache to executives at other companies.

And consumers loved him for it.

Today, iPods, iPhones and iPads are great tools to listen to music, watch videos, play games and read print material bought on the iTunes digital store. Devices are still core to Apple's profits, but what's in them — songs, novels, magazines and movies — took Jobs' signature determination to get there.

Anne Sweeney, president of Disney-ABC, remembers when Jobs wooed her several years ago with what was then his latest device, the video iPod, in order to persuade her to license ABC shows to be shown on the iPod's tiny screen.

Jobs flew down to Burbank, California, with a team from Cupertino and wowed ABC's top brass with an episode of the broadcaster's own hit show, "Lost." This was well before Jobs became a billionaire when The Walt Disney Co. bought the animated movie company Pixar from him in 2006.

Sweeney was so entranced she forgot to ask where he got a copy of the program. "I thought, 'He's Steve Jobs, he can do anything.'"

On a later phone call, Jobs told Sweeney that she was talking about Disney "all wrong."

"He said, 'You keep calling yourself a media company. And you just keep talking about content. You're a media and technology company and you had better come to terms with that and you better embrace it because that's who you are.' And he wasn't wrong," Sweeney said at a Los Angeles media conference last month.

Jobs had no qualms about telling company suits what he thought they ought to be doing. A lot of the time, he said they were doing things "all wrong."

Before iTunes was a music store, Apple made iMac computers that could "Rip, Mix, (and) Burn" music from CDs. The company was one of many that jumped onto the wave of music piracy that brought the recording industry to its knees.

As the industry struggled to find a way out of the mess, Jobs brought them a way to promote the legal consumption of music, and he had specific ideas of how to do it. He dressed down lower-level record company executives over their ideas in early meetings and then showed off his plan for what would become the world's largest music store.

In 2002, he charmed Warner Music's then CEO, Roger Ames, into believing 99-cent digital songs were the way of the future. For a lack of better alternatives, the other major recording labels, even Sony Corp. with its competing file format, jumped aboard. A year later, the iTunes music store launched with 200,000 tracks.

The store, now with more than 20 million tracks, has become immensely popular, having sold more than 16 billion songs so far. It has a 70 percent share of the digital download market, according to NPD Group. More than a fifth of U.S. music sales by revenue come through Apple.

But iTunes has proven to be a mixed blessing for the music industry: Digital revenue is growing, but CD sales have continued to plunge in the decade since its debut. The music industry often blames the fact that iTunes encourages people to buy songs individually rather than entire albums.

It was only two years ago that major recording companies got Apple to sell tracks for up to $1.29, the price all top-sellers go for today. The pricing change has provided a needed boost to revenue. But the hike might not have worked if songs weren't initially priced so cheaply that they offered a good alternative to pirated songs that were free but troublesome to find and download.

"Steve and Apple made it once again easy and accepted to pay for music," Recording Industry Association of America CEO Cary Sherman said in a statement. "His legacy will live on, long past his all-too-short time on Earth."

Jobs' influence on the movie and publishing industries has been less profound.

While his $7.4 billion sale of the Pixar animation studio to Disney made him rich, it hasn't turned people into mass buyers of digital movies. Studios are still looking for ways to spur sales, doing everything from adding social media functions to online streams to ensuring that purchased discs come with digital copies that are stored online in the so-called cloud.

Jobs was instrumental in creating a new pricing model for digital e-books, hiking some online prices but cutting into publishers' share of revenue. But the iPad has not become the dominant way people consume books, even digital ones. Amazon.com Inc.'s Kindle dominates that realm.

Meanwhile, magazine and newspaper publishers are hoping that the iPad can get them out of the funk of falling circulation and advertising, but it hasn't happened yet.

Even the music industry is evolving. Services such as Spotify and Rhapsody are gaining traction by moving people away from owning music and toward subscribing to all-you-can-listen plans. It remains to be seen if Apple can stay on top with its iCloud system of storing songs, photos and documents online and pushing them to you on all your devices. ICloud will debut Wednesday.

Jobs' legacy may be that he helped point the way for the music industry to pull out of a devastating downward spiral and paved the way for the consumption of digital entertainment on devices that are easy to use.

"I think he's our generation's Thomas Edison," said Russ Crupnick, a digital music analyst with NPD Group. "When the skies were really cloudiest about where music was going to go, his vision was where the sun was shining."

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