iTunes: Where Does Innovation Come From?

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Obstacles make for great innovations. When something can’t be done, there is likely a great mind working to prove that wrong. The Wright brothers were scoffed at for their ideas on flight. Both Henry Ford and Bill Gates were ridiculed for thinking automobiles and computers should be owned by all. Innovation doesn’t come easy, but there is inspiration everywhere we look as long as we know what to look for.

Walter Isaacson’s new book The Innovators centers around the great minds that created the internet and computers that have irrevocably shaped the modern world. The visionary ideas of innovators like Bill Gates and Steve Jobs gave rise to some of the disruptive products that revolutionized the way people live. I want to explore the story of one of Steve Job’s greatest creative leaps, the obstacles he encountered, and the reverberating effects it had on the marketplace and the world.

Down With Napster

The music industry in 1999 was going through a “wild west” phase brought on by the increasing accessibility of the internet and digital music. Napster, the infamous file sharing and free downloading service, had over 80 million users and appeared ready to change the music industry forever. Tangible albums and CDs were rapidly becoming relics of the past, and stores like Tower Music and Best Buy were being replaced by desktop computers and internet connections. However, in 2002, after a legal battle with The Recording Industry Association of America regarding copyright infringement, Napster declared bankruptcy and shut its cyber doors forever.

Steve Jobs saw his opening.

A Different Approach

In 2002, the music industry had all but given up on its own customers. As a result of services like Napster and the rise of illegal downloading, music executives made the assumption that their customers’ interest in music had waned so much so that they were no longer willing to purchase the CDs and albums that artists were producing. The music industry had declared war against these illegal downloaders.

Jobs saw it differently. As the music industry was manufacturing ways to lock these downloaders out, Jobs was inventing new ways to let them back in. Eric Garland, chief executive of media tracking at BigChampagne, was quoted in a post on MediaDecoder explaining,

“Steve Jobs came into the music industry at a time when the incumbents had given up on their own fans. Virtually all the leaders in the industry retrenched and began to focus on a scheme of locks and braces on music. Steve Jobs recognized that people on the Internet were not thieves. They were fans — rabid fans.”

It was this realization that drove Jobs towards an industry-redefining innovation.

A Market Begging for Change

Most people looked at Napster and the way its users interacted and thought: this new generation only wants free music. The music industry (and just about every other person) saw a market filled with consumers that wanted to ripoff artists and labels.

Jobs saw something different a market that was changing. The new customers were not attached to whole albums the way their parents had been. Without directly saying it, the new wave of consumers was clamoring for single tracks, not entire albums. As Steve Knopper explains in a column for Rolling Stone Magazine,

By late 2002, he [Jobs] believed music fans clearly wanted to download songs they liked in an affordable and easy way but during this period, the record industry had no affordable, easy and legal option allowing this to happen.

Jobs created one.

The Spark

As with most great disruptive innovations, Jobs saw a massively underserved customer segment and created a service that answered their needs legally. He began contacting the heads of major record labels to give his pitch for a platform he called iTunes. The message was simple and Knopper delineates it perfectly here,

There was no choice. There would always be online music thieves, but most consumers simply needed an easy, legal way to download songs. This was how fans would buy music in the future, whether the record industry liked it or not.

Building The Brand

Within one week of its launch, iTunes had over one million paid downloads, and had displaced both Best Buy and Walmart as the world’s top music store. Jobs’ new service had disrupted a market that was experiencing a revolution. iTunes took the music retail industry a world wide market and made it more affordable, efficient, and consumer friendly.

What We Can Learn

In a time when nearly an entire industry was shutting customers out, Jobs found a way to bring them back in. The record industry wasn’t ready to go digital or at least they thought they weren’t. But Jobs identified a service his customers were demanding and created an entire line of products (iTunes, iPods) that were designed to satisfy that need, creating a new technological paradigm in the process.

Where many people see an obstacle, others see an opportunity. Every pain point is a potential for successful innovation. Learn to look at the world a little differently, and you could be the next innovator who revolutionizes an entire industry.

Keep checking back for more stories of great innovators, their inspiration, and how we can see the world through their eyes!

Have your own stories about great innovations or thoughts on Steve Jobs? Tweet us @EidsonPartners!

5 thoughts on “iTunes: Where Does Innovation Come From?

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