The ad showed the halo effect of the iPod’s marketing: It helped Dylan win a younger audience, just as the iPod had done for Apple computers. Because of the ad, Dylan’s album was number one on the Billboard chart its first week, topping hot-selling albums by Christina Aguilera and Outkast. It was the first time Dylan had reached the top spot since Desire in 1976, thirty years earlier. Ad Age headlined Apple’s role in propelling Dylan. “The iTunes spot wasn’t just a run-of-the-mill celebrity-endorsement deal in which a big brand signs a big check to tap into the equity of a big star,” it reported. “This one flipped the formula, with the all-powerful Apple brand giving Mr. Dylan access to younger demographics and helping propel his sales to places they hadn’t been since the Ford administration.”
The Beatles
Among Jobs’s prized CDs was a bootleg that contained a dozen or so taped sessions of the Beatles revising “Strawberry Fields Forever.” It became the musical score to his philosophy of how to perfect a product. Andy Hertzfeld had found the CD and made a copy of it for Jobs in 1986, though Jobs sometimes told folks that it had come from Yoko Ono. Sitting in the living room of his Palo Alto home one day, Jobs rummaged around in some glass-enclosed bookcases to find it, then put it on while describing what it had taught him:
It’s a complex song, and it’s fascinating to watch the creative process as they went back and forth and finally created it over a few months. Lennon was always my favorite Beatle. [He laughs as Lennon stops during
the first take and makes the band go back and revise a chord.] Did you hear that little detour they took? It didn’t work, so they went back and started from where they were. It’s so raw in this version. It actually makes them sound like mere mortals. You could actually imagine other people doing this, up to this version. Maybe not writing and conceiving it, but certainly playing it. Yet they just didn’t stop. They were such perfectionists they kept it going and going. This made a big impression on me when I was in my thirties. You could just tell how much they worked at this.
They did a bundle of work between each of these recordings. They kept sending it back to make it closer to perfect. [As he listens to the third take, he points out how the instrumentation has gotten more complex.] The way we build stuff at Apple is often this way. Even the number of models we’d make of a new notebook or iPod. We would start off with a version and then begin refining and refining, doing detailed models of the design, or the buttons, or how a function operates. It’s a lot of work, but in the end it just gets better, and soon it’s like, “Wow, how did they do that?!? Where are the screws?”
It was thus understandable that Jobs was driven to distraction by the fact that the Beatles were not on iTunes.
His struggle with Apple Corps, the Beatles’ business holding company, stretched more than three decades, causing too many journalists to use the phrase “long and winding road” in stories about the relationship. It began in 1978, when Apple Computers, soon after its launch, was sued by Apple Corps for trademark infringement, based on the fact that the Beatles’ former recording label was called Apple. The suit was settled three years later, when Apple Computers paid Apple Corps $80,000. The settlement had what seemed back then an innocuous stipulation: The Beatles would not produce any computer equipment and Apple would not market any music products.
The Beatles kept their end of the bargain; none of them ever produced any computers. But Apple ended up wandering into the music business. It got sued again in 1991, when the Mac incorporated the ability to play musical files, then again in 2003, when the iTunes Store was launched. The legal issues were finally resolved in 2007, when Apple made a deal to pay Apple Corps $500 million for all worldwide rights to the name, and then licensed back to the Beatles the right to use Apple Corps for their record and business holdings.
Alas, this did not resolve the issue of getting the Beatles onto iTunes. For that to happen, the Beatles and EMI Music, which held the rights to most of their songs, had to negotiate their own differences over how to handle the digital rights. “The Beatles all want to be on iTunes,” Jobs later recalled, “but they and EMI are like an old married couple. They hate each other but can’t get divorced. The fact that my favorite band was the last holdout from iTunes was something I very much hoped I would live to resolve.” As it turned out, he would.
Bono
Bono, the lead singer of U2, deeply appreciated Apple’s marketing muscle. He was confident that his Dublin-based band was still the best in the world, but in 2004 it was trying, after almost thirty years together, to reinvigorate its image. It had produced an exciting new album with a song that the band’s lead guitarist, The Edge, declared to be “the mother of all rock tunes.” Bono knew he needed to find a way to get it some traction, so he placed a call to Jobs.
“I wanted something specific from Apple,” Bono recalled. “We had a song called ‘Vertigo’ that featured an aggressive guitar riff that I knew would be contagious, but only if people were exposed to it many, many times.” He was worried that the era of promoting a song through airplay on the radio was over. So Bono visited Jobs at home in Palo Alto, walked around the garden, and made an unusual pitch. Over the years U2 had spurned offers as high as $23 million to be in commercials. Now he wanted Jobs to use the band in an iPod commercial for free—or at least as part of a mutually beneficial package. “They had never done a commercial before,” Jobs later recalled. “But they were getting ripped off by free downloading, they liked what we were doing with iTunes, and they thought we could promote them to a younger audience.”
Any other CEO would have jumped into a mosh pit to have U2 in an ad, but Jobs pushed back a bit. Apple didn’t feature recognizable people in the iPod ads, just silhouettes. (The Dylan ad had not yet been made.) “You have silhouettes of fans,” Bono replied, “so couldn’t the next phase be silhouettes of artists?” Jobs said it sounded like an idea worth exploring. Bono left a copy of the unreleased album, How to Dismantle an Atomic Bomb, for Jobs to hear. “He was the only person outside the band who had it,” Bono said.
A round of meetings ensued. Jobs flew down to talk to Jimmy Iovine, whose Interscope records distributed U2, at his house in the Holmby Hills section of Los Angeles. The Edge was there, along with U2’s manager, Paul McGuinness. Another meeting took place in Jobs’s kitchen, with McGuinness writing down the deal points in the back of his diary. U2 would appear in the commercial, and Apple would vigorously promote the album in multiple venues, ranging from billboards to the iTunes homepage. The band would get no direct fee, but it would get royalties from the sale of a special U2 edition of the iPod. Bono believed, like Lack, that the musicians should get a royalty on each iPod sold, and this was his small attempt to assert the principle in a limited way for his band. “Bono and I asked Steve to make us a black one,” Iovine recalled. “We weren’t just doing a commercial sponsorship, we were making a co-branding deal.”