The songs would be encoded as AAC files, protected through the system Apple called FairPlay,
which does not allow for having a file bought on the iTunes store, copied on more than 3
computers. And, of course, it couldn’t be played on any digital player except iPod.
And the files could be copied onto as many iPods as you want.
OK, so how did the labels react, as Steve Jobs called to explain the deal? First, he
called Warner Music. The top management loved it. Sold. Then Universal. Not in love with
the idea, but Warner was in, so they went in too. Sold. BMG. Sold. EMI. Kicking and
screaming, but in. Sold. Sony. Well, they were a holdout. And you can understand how
hard it must have been to make such a decision for Sony. It was an electronics company too.
Made all kinds of consumer music devices. Conquered the market with its revolutionary
portable cassette player, the Walkman. Was leading the portable CD players market with
its Discman. And now it was supposed to hand over the whole new area of the market to Apple
and its iPod. So, of course, they were a holdout. But, one day, a few months before the iTunes
store was to go live online, Steve Jobs called Sony Music execs back, and basically told
them that Apple will unveil the store and commence the music sales through it, with
or without Sony. Well, they simply couldn’t afford to be the only major label not in on
this thing. So they relented, and went in with the others. And so, in April, 2003, the
iTunes store went live. Well, that almost looks too easy, doesn’t
it? How is it that all those labels that for years couldn’t agree on anything about the
online commerce system, now, in such a rapid succession, went in with Apple and its iTunes