The resignation of Apple CEO Steve Jobs marks the end of an era not only for Apple, but for the digital music industry that he played a crucial role in shaping.
Which is why the timing of this move is so important.
By any standard, Jobs is the chief architect of the modern digital music business. But that business is on the cusp of fundamental shifts-ownership to access, a personal experience to a social one-and it’s far from clear whether Apple with or without Jobs will lead this transition or merely go along for the ride.
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Apple wasn’t first to market with an MP3 player, a digital music store, podcast downloads, smartphones or mobile apps. But under Jobs’ leadership, the company made those once-niche services and devices part of the consumer mainstream, opening up new revenue streams for a music business struggling to make the transition to a digital marketplace.
In fact, since the launch of the iTunes Music Store in 2003, Jobs has served as the recording industry’s de facto chief digital strategist, prevailing over initial label reservations to push the market toward 99 centcq pricing for digital tracks, the ability to download songs individually and-in exchange for giving in to label demands for variable pricing-stripping digital rights management restrictions from music downloads.
Recording artists who initially refused to let their music be sold as singles eventually relented to the iTunes way. Even the Beatles finally came around and are still only available for digital sale on iTunes, now the largest retailer of music in the United States.
“We have our arguments with Steve,” EMI Group CEO Roger Faxon says. “But in the end what we’re arguing about between us is about how to build the best future for music. There is a commonly held belief that all music is to Apple and to Steve is a vehicle to sell devices. I think it’s exactly the reverse.”
More recently, the success of the iPhone has transformed how smartphones are made and, perhaps more important, how content is delivered to them, becoming a key factor in the success of such music services as Pandora, Slacker and even Spotify.
But the digital music business is entering a new phase, and Apple has yet to show it can have the same impact on this direction. Music is becoming more social, an area where Apple has struggled to date. Its music-centric social network, Ping, fell flat due to a lack of Facebook integration.
There are also signs of a shift toward cloud-based access over ownership of digital media. While Apple’s iCloud looks like the best of the available music locker services, it’s not clear whether the company will roll out a full-featured subscription streaming service.
And finally there’s the movement toward bringing digital entertainment to the living room. Jobs famously described the Apple TV set-top box as nothing more than “a hobby.” But the company will need to offer something more if it is to establish a significant presence in the emerging market for “lean-back” digital entertainment options. Rumors are rampant that Apple is working on a TV to revolutionize this space.
These next steps will be led without Jobs as CEO. He’ll certainly have a great deal of influence in his new role as chairman, but his widely publicized health struggles raise questions of how active-and for how long-he’ll be involved in key decisions.
So all eyes now turn to incoming CEO Tim Cook. According to industry analysts, Apple’s product road map extends about five years out, providing Cook with the opportunity to execute on plans already in place-something he’s already proved adept at doing during Jobs’ extended absences from the CEO suite.
And to keep Apple’s edge in product innovation, Cook won’t be alone. The senior management team at Apple includes design guru Jonathan Ivy, who is largely credited for the sleek look and feel of the company’s devices; software wizard Scott Forstall, who oversees the iOS platforms; and Eddy Cue, who handles all of Apple’s Internet services, including iTunes.
But even the best of teams can’t replace an icon. Jobs’ charisma, brilliance and sheer force of will have transformed the music, mobile and computing industries forever. His absence may eventually do the same for Apple, and not necessarily for the better. ••••
Additional reporting by Glenn Peoples.