On April 28, 2003, Apple revolutionized the way the world would download and consume music, (and eventually other forms of digital media) – forever.
Yes, this was the day that the (now late) Steve Jobs introduced the iTunes Music Store. If we go back prior to the initial public introduction of iTunes itself, on January 9, 2001, we see that Jobs did something pretty clever behind the scenes.
According to reports at the time, he approached the big music labels and eventually set the price he wanted to sell their music for. That price was 79p.
The proposition Jobs made to the labels was simple.
The labels could accept Apple’s pricing terms and (almost immediately) enjoy having their entire artist and track catalogs exposed to Apple’s 125 Million+ iTunes customers, with the option for one-click purchasing.
Or, they could continue selling music through their own channels and only reach a limited audience.
Thankfully for everyone involved, the labels took the bate.
What Jobs perhaps failed to mention to the labels, though, is that Apple would soon after begin selling little hardware boxes – called iPods – for hundreds of dollars a piece.
If you think about it, it was a genius move by Jobs. Apple had in one move successfully cajoled the big labels into allowing them to sell their music through iTunes, and then left the record labels selling 79p (and more recently 99p) products.
Apple, on the other hand, was taking a hefty cut from these 79p and 99p tracks, alongside making a profit from selling music-listening hardware for $150-200.
The content which is available on the iTunes Store, (and the digital ecosystem which powers such a system), continues to be a driving force for the sales of Apple’s mobile devices – today.