Steve Jobs Was an Idiot

NEW YORK (TheStreet) -- I love Steve Jobs as much as the next person -- my lengthy article history at TheStreet confirms this. But, I've grown so weary over the last few days that I have no problem going all anti-Steve Jobs on you just to prove a point.

In response to the Apple (AAPL)/Beats deal, run-of-the-mill scribes to passport-toting Apple haters continue to pull this Jobs' quote from the archives:

People don't want to buy their music as a subscription. They bought 45s, then they bought LPs, they bought cassettes, they bought 8-tracks, then they bought CDs. They're going to want to buy downloads.

From there we get this type of nuance- and context-lacking analysis from writers:

... so far streaming music has had a difficult time gaining a mainstream audience in the U.S.

No need for a link. We've seen that Jobs' quote and the standard reaction to it many times, particularly this week.

First, a lot has changed since Steve Jobs died. And who knows if he was even being forthright when he was alive and saying these things.

Second, in the rush to canonize Jobs (again) we fail to acknowledge that he was wrong! Insofar as "they're going to want to buy downloads" he was right, however he absolutely did not see the future beyond downloads.

You should read the article I wrote last month -- Is Steve Jobs Rolling In His Grave Or Did he Dig One For Apple's iTunes? I wrote it in response to a report that Apple was so concerned with iTunes Radio's slow start that it was considering alternatives, including starting its own on-demand subscription-based streaming service. Here's a key excerpt:

Steve Jobs was alive when Pandora (P) took off. In fact, Pandora exploded ...
Jobs was witness to (Pandora's iPhone-facilitated success). And you mean to tell me he didn't have sight lines somewhere over the next several years to start extricating Apple from the music download business and move it toward a streaming model.
So we can't put this all on Cook. Jobs deserves a considerable portion, if not all of the blame. Maybe Jobs was perfectly happy relying on third party apps to provide the iOS music experience outside of the iTunes Store and your iTunes collection. Maybe he never would have done iTunes Radio. Maybe he didn't see the need for it. We'll likely never achieve certainty with respect to any of this.
But here's what we do know -- Apple did not anticipate the death of the iTunes Steve Jobs built. And now it's almost as far behind the curve as the music industry. And it's displaying an uncharacteristic patheticism as it flails ineptly trying to not merely keep up, but save a business model that simply cannot be saved. We're not buying music anymore. We're buying apps, but we're not buying music. And there's nothing Apple can do to change this.

So Jobs and Apple visioned people buying downloads, but they didn't vision people moving away from downloads to streaming. Apple came way late to streaming, copying Pandora several years after Pandora established itself as Internet radio's clear leader. That's absolutely on Steve Jobs.

Spin forward to the often-regurgitated notion that "so far streaming music has had a difficult time gaining a mainstream audience in the U.S." Let's put some nuance and context around that statement ...

Streaming radio absolutely has caught on -- free, ad-supported streaming. And, despite all of the predictions that subscription-based streaming will not catch on, it will. It's just going to take time.

We're conditioned to believe we should get music for free. And that's because from YouTube to Pandora to the free tastes of subscriptions services to piracy we do get music for free. That's the music industry's own fault for allowing others to dilute the value of its content. By making free or, for a while, $0.99 seem like the only socially acceptable options.

I'm convinced Apple finally sees the tide turning from downloads to streaming. And it knows subscription-based streaming can not only play a role, it can dominate.

To this point, the folks behind subscription-based streaming servies have done a horrible job marketing what incredible deals they are. It was pretty easy to pass off $0.99 per single so you don't have to buy a bunch of songs you'll never listen to on the rest of the album as a good deal. That's like shooting consumer psychology in a barrel. It should be equally as easy to find a convincing way to say ...

For $10 or $15 a month, you can listen to -- and store in the cloud -- an unlimited number of songs.

Go subscribe to my subscription-based streaming service of choice, Rdio, and tell me it's not a better deal than anything else out there. In fact, it's a wet dream for the music fan -- casual or diehard.

So, if Apple's smart it pours resources into iTunes Radio. It gets serious about making that work, which would have to include dumping Pandora and even considering a version for Android. Make that the gateway to Beats Music by Apple marketed as the superior choice for your music collection in the cloud. Or take a mea culpa on iTunes Radio and focus completey on a repositioned Beats Music.

It'll take some time and marketing to make it work. But that's the direction we're headed. Apple seems to understand this now, as evidenced by its concern over iTunes Radio performance and its subsequent purchase of Beats. But you just can't expect people, given the environment we have operated under, to buy music service subscriptions in droves overnight.

The tide will turn and, if there's any justice in the world, Tim Cook will get credit for seeing the future at Apple. Not Steve Jobs. Because, if this Apple/Beats deal works out from a digital music perpsective, that's exactly what the record should show.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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