Steve Jobs warned Jeff Bezos that iTunes would kill CD sales

Over some platters of takeout sushi, just before the release of iTunes for Windows on October 16, 2003, Apple CEO Steve Jobs warned Amazon founder Jeff Bezos that iTunes would kill CD sales.

compact disc

Luke Dormehl for Cult of Mac:

Steve Jobs
Steve Jobs
The anecdote comes from an excellent new book, titled Working Backwards: Insights, Stories, and Secrets from Inside Amazon. It’s written by Amazon employees Colin Bryar and Bill, both of whom joined the company in the late 1990s. In the book, the authors recount a fall 2003 meeting in which Bezos, Bryar and Diego Piacentini — a former Apple VP who had jumped to Amazon — traveled from Seattle to Cupertino to meet with Jobs. He recalls:

Jobs and another Apple employee greeted us, then ushered us into a nondescript conference room with a Windows PC and two platters of takeout sushi. We had an informal discussion about the state of the music industry (note: this was not long after Apple launched iTunes) while doing some serious damage to the sushi platters, for it was already past dinnertime. After dabbing his mouth with a napkin, Jobs segued into the real purpose of the meeting and announced that Apple had just finished building their first Windows application. He calmly and confidently told us that even though it was Apple’s first attempt to build for Windows, he thought it was the best Windows application anyone had ever built.

…after the demo, Jobs made a comment to Bezos that could be interpreted in a couple of ways. “Amazon has a decent chance of being the last place to buy CDs,” Jobs said. “The business will be high-margin but small. You’ll be able to charge a premium for CDs, since they’ll be hard to find.”

MacDailyNews Take: As usual, Steve Jobs foresaw the future.

According to the Recording Industry Association of America (RIAA), CD album sales in the United States have dropped by 97% since peaking in 2000 and are currently at their lowest level since 1986. In 2020, 31.6 million CD albums were sold in the United States, accounting for less than 4 percent if music industry revenues.

CD sales 1983-2020

13 Comments

  1. The move away from owning music is a regrettable reality. Subscriptions require a tether to a third-party…independence diluted again. Yes Amazon. Yes Apple. Yes Google. We have needs and desires…you can fulfill them.

    1. Dystopia from not having to use CDs? We are talking about music, right? I have experienced no injustice or suffering from not using CDs. I’m glad I don’t have to keep hundreds or thousands of CDs for my music collection. I prefer hard drives or SSDs to keep my music on. I’m glad Steve Jobs killed the CD if that’s actually the case in point. I thought one of the things about iTunes was the ability to burn music to CD if you really needed to use a CD. Retail music CDs seem to be a huge waste of plastic from my perspective.

      1. Remember, I speak as a consumer and my interests as a consumer.

        Normally choice is good, steering a consumer to what you want them to do makes for less choice.

        Between 2020 to now I purchased 4 free Apple Music eligible devices, along with Apple TV. Declined it all. I prefer to own my media. On music I buy the CD, rip it, and archive it.

        1. I agree. Everyone wants you to subscribe to something these days. It’s like100 ticks sucking your blood each month.

          And speaking of Ticks, Amazon, which I am a Prime member and like, enrolled me in their “free” music trial but never asked, just informed me. I went online right away and unsubscribed.

          Here we are three weeks later and I get an email from them that my Amazon Music will renew April 5th, and when I logged in they had turned on auto-renew again. WTF!!

          Did anyone else notice that?

  2. Roon solves all those problems…I prefer to own most of my collection of ripped CD’s….In fact I still buy them…..The second you stop paying for Qobuz, Tidal or whatever then your whole collection disappears…

  3. Napster killed CD sales (along with Kazaa and other file sharing services). . . Jobs offered iTunes as a remedy for Music Executives to have some sort of revenue moving forward . . . No college student at the time was paying for music (ask Mark Zuckerberg) . . . as one college student in the 2000s famously said, “I went to college because they had a T1 line, and I could download unlimited free music.”

  4. Well, it bugs me a lot that I don’t actually “own” the music I’ve purchase (or movies).

    Digital property rights vanish in a haze. Purchase physical media (CDs, DVDs, BRDs) and you actually own an asset.

    I’ve ripped almost all of my CD collection into iTunes. Why? Because I spend most of my time at my iMac, and love having my library at my fingertips.

    But there is no long-term asset value to buying albums or tracks in iTunes (Apple Music) or movies in the TV app. If I die (will I care?), my sibs can’t inherit my digital purchases.

    I’m all in favor of remuneration for the artists and production staffs that deliver music and movies to us — I’ve a degree in classical music, fercrynoutloud, with a minor in theatre arts. Piracy bugs me, and that’s my happiest takeaway from Jobs’s announcement of the iTunes Store in the first place.

    He pushed that people are actively searching for an honorable alternative to piracy.

    I’m in. I’ll buy digital for convenience and for near-reference copy editing, but I don’t cotton to the value spectrum in doing so, even as I do so.

  5. No one here is talking about the damage done to the music industry by not paying artists enough. I hear that things are changing slightly for app developers but some sort of variable pay scale is needed for the little guys and gals of music, especially post-covid. They make pittance now.

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