It’s amazing what great design and marketing can achieve. I believe that Steve Jobs is one of the most capable CEOs on earth. I believe that he blows Bill Gates out of the water. But I also believe that he is totally and completely missing the boat on Internet content distribution and edge competence.
Now, I do believe that Jobs strategy does make sense to someone that has grown up in a broadcast-only world. If he can make iPods and iTunes completely ubiquitous and force all of the content owners to their knees in the process he wins big. He can structure exclusives and become the de facto point of entry into every major archive of historical and current broadcast content. It is a grand dream that I think is enticing Jobs down a path that is doomed to failure. Just as the goal is starting to look within reach, forces are emerging that will reveal the foolishness of this quest.
The problems revolve around Jobs inability to leverage the social in any meaningful way due to the DRM restrictions imposed by the labels and studios. For example, the real power of an iPod would be the ability to transmit songs from one device to another; to enable a song to grow virally in real time over a living network of interconnected devices. Penetration rates would skyrocket and Apple would sell a ton more devices. This won’t happen, not because it’s too expensive or difficult, but because Apple must restrict content portability to maintain their precious syndication arrangements. It’s going to take a lot more time for Jobs to get the kind of penetration where he will yield enough negotiating leverage to demand that level of control.
But even in a more global sense, iTunes is mimicking the AOL version of the Internet. The ‘we’ll show you the version of the Internet we think you’ll find interesting’; the version largely comprised of content created by corporations, not individuals. This model works well in the beginning, but as we all know, gets dominated by the Google/Yahoo strategy of just providing filtered access to everything. iTunes is till essentially saying we’ll show you the music and video universe we think is relevant. The problem is that we no longer feel content to let others make those decisions for us.
Apple keeps cutting off the tail at a time when this has been proven an unwise (and unnecessary) strategy. Unless Apple alters this approach I think Jobs is doomed to repeat past failures. But if they fix this problem, Apple could dominate is a way that should make the Yahoos and Googles of the world envious. As much as I respect Jobs, I think design and marketing can only take you so far. I think MySpace has proven how important the other stuff is to getting the rest of the way there.