Steve Jobs, Apple, the iPod and the iTunes Music Store are definitely riding high. With over 3 million songs sold every day from the iTunes Music Store and over 32 million iPods sold in 2005, Apple finally achieved something it had never achieved before: mass-market desirability. Now the mass market is finally focused both on the sexy design of its products and on buying up as many of Jobs’ lovely inventions as fast as they possibly can. As Mike Mella’s iPodFather movie poster indicates, some feel he might have a bit too much power. And unfortunately, this honeymoon won’t last forever, dear Steve.
Competitors are knocking at Apple’s door and while it’s true that insanely great products usually triumph over poor ones, I’m worried about other products, that are just great (read Beta versus VHS etc etc), beating out the insanely great ones out in the end. When Two and a Half Men can get an Emmy-nomination, the world is still ripe for a repeat of Apple’s late-Eighties fall from grace (Could Steve Jobs become another John Scully after all?).
After all these years of using Apple’s products, it still puzzles me why they can’t seem to make any in-roads into the mega-business world or even the business world of entertainment. Sure, they sell rafts of computers to advertising agencies, graphics design houses, video editing shops and now into the scientific community, but why won’t they get serious about getting big…I mean really big?
Blah, blah, keynote, blah, blah
I watched Steve deliver his keynote to the Apple Developers Conference. Wow. What a letdown. He didn’t blow up anyone’s skirt with that speech. Sure he delivered a kick-ass new Mac Pro, but engineers want big, hairy problems to solve. They don’t give a shit about “Time Machine”. You give awards to “Delicious Library“, a slick tool that catalogs your books, DVDs and CDs, but where are the big complex applications? Where’s the big-time new industry within Apple? Where are the amazing server applications that will shape the future and inspire the next generation of business consumers?
I don’t want to bash Jobs and the work he has done with Apple, but it really does puzzle me. Jobs is so focused on the consumer experience that he can’t, or won’t, give any power or credit to those who want the same sort of sexy experience for those trying to use his products in a big way. Business consumers are consumers, too. He’s a retail consumer-focused guy and I’m worried that it will be the end of him and Apple.
Apple the next Novell. Apple the next Microsoft
I work in the entertainment industry and for many years, big-daddy Avid has been the king of all editing, finishing and sound. There are tons of people in the industry who think Apple’s products are little toys for the kiddies. Some great editors won’t even take a job unless they know that they’ll be using Avid. It’s a really big deal. In the end, no executive producer is going to bet their job on Apple when they know they’ll be perfectly safe using Avid products…which is a deal with the devil.
Working with Avid is like working with Novell many years back.
Avid has really great products that have been around for a really long time, but you’re friggin’ enslaved to these guys. They charge at least 10 times retail pricing just to have the Avid logo on something. Want a 73GB drive? It’s not $200, it’s $2000. Why? Because they’ve got you. They’ve locked you into their scheme to keep you enslaved to their products. No other hard drives will work in their equipment. Not because a retail-purchased hard drive is too crappy to occupy your $100K Avid Unity RAID Array (a box you could buy for $25K retail), but because they don’t see any reason to let you buy parts for your system at market-rate. It would hurt their very profitable business.
Novell projected many of the same attitudes that Avid does now. They charged exorbitant prices for Novell Netware. They made their servers so complicated to use that it required thousands of dollars worth of training before you could even get the stuff installed. It cost mega-thousands more in training and administration to run their servers. But in the beginning, Novell was the only game in town if you wanted file-sharing and network printing on an enterprise-scale. Novell Netware, running on their own proprietary network protocol IPX/SPX, dominated the “network operating system” marketplace with 60-70% market share…in 1992.
Unfortunately for Novell, there was this little upstart company called Microsoft that started selling a product called Windows NT for around $500. At first Windows NT was pretty minimal and the big, mean Novell engineers just laughed, “What a joke. No server OS worth its salt should run with these cutsie windows.” I think we all know the rest of this story. Novell nearly went bankrupt within ten years and Microsoft now occupies over 55% of the server market and Novell only 12%, with Unix occupying the other 33% or so.
Do you see the connection here?
Apple links in to this story in a few ways. They’re like Novell in their domination of the digital music marketplace and the iPod and the iTunes Digital Rights Management (DRM) System, ironically named FairPlay. And they’re like Microsoft battling Novell in their quest to beat down Avid.
Unfortunately, Apple doesn’t seem that serious about winning these battles. In the digital music market, they’re lazily going along keeping the iTunes Store walled off from anyone else. In the professional video market, they seem to be waiting for Avid obsessed editors to die, while trying to embed the Final Cut Pro ethos into the next generation of video editors. Sadly for Apple, they seem to be intransigent about really kicking ass in these areas.
Apple stands at the edge of two battles and can win both. Here’s what I think Steve Jobs and Apple must do in the next 12 months.
Open up the iTunes Fairplay DRM system to community work and open competition…NOW
The iTunes Fairplay DRM has worked great for Apple and I think it’s high time for them to open up the technology and let anyone encode their music and videos with their system. Make the system open-source and get all the inspired tech geeks embedding the DRM technology into new devices and other operating systems. Everyone (read opinion leaders in the technology world) hates Microsoft’s “Plays for Sure” DRM, and most hate Fairplay. Opening up the code to community scrutiny will also make your system more secure in protecting content if you have the world’s eyes helping you make sure your code is robust.
Take the lead here, Steve. Set the music distribution technology world on fire by making it simple, easy and secure to encode and distribute music and video content that will work with your iPods and your store. Take the threat from Microsoft seriously and ensure that everyone except Microsoft will be on your side in this battle.
Microsoft is about to release their Zune music player and if history is any guide, they intend to win this battle with the iPod no matter how long it takes. I think this step will help you remain securely on top of the market.
Recognize that only robust collaboration and workflow support will help your Pro Applications win in the future
A critical area of Apple’s business and a robust area for excitement and growth has been in their “Pro Applications” development. Final Cut Pro has inspired an entirely new generation of video editors (nay artists) to cut commercials, films and other works. I recently met the 10 year old niece of one of my coworkers who is completely obsessed with making her own videos. This is an amazing result of all the hard work at Apple.
Unfortunately, unless Apple gets serious about supporting the entire process of making movies and television shows, my friends niece won’t find many movie and television productions that are thrilled to have her cutting on Final Cut. Why? Because Apple doesn’t understand workflow and that workflow is the only way stuff gets made in the entertainment business.
The first example
There is an entire established process to move from an offline cut of a television show to the finished product that eventually airs on television. You need to master the audio, color correct the video and quality check the whole thing to make sure it works for your television network’s standards.
At this point, the artists who do this work work almost entirely in the Avid world. They use Avid Symphonys, Digidesign Pro-Tools (Avid) and loads of other specialized tools to make television shows look and sound great.
Bring these folks a show you’ve just cut on Final Cut Pro and they’ll look at you blankly and wonder why you made such a poor decision. Sure, if you want to leave it to your offline editor to color-correct and master the audio, you’re in luck. But the people who do that work normally are true artists with a completely different skill-set than an editor. They work magic with bad audio and bad camera work so that you never know how poor the original video might have been. You can’t just say to these people that they should go out and buy Final Cut Pro, Logic and a bunch of Mac Pros.
To succeed right now, you need to play along with how the workflow really works. Make your files friendly to the Avid finishing process. You’ll win loads of fans further upstream who can use the amazing tools you’ve created to edit the shows and disrupt the finishing market by allowing them to continue to use the best tools in finishing the final product.
Another example
Apple’s answer to Avid’s very mature, very useful product, Avid Unity Media Network, is a hard drive. A big hard drive: Apple XSan.
This is a classic example of Apple not taking the time to understand business consumers and leaving the door wide open for its competitors to reinvent themselves and recover from Apple’s disruptive entry into their market.
Sure you need a big storage system to keep all your video online, but Avid Unity helps manage the media for you. It manages user workspaces, keeps digitized video organized and lets editors work on different parts of a single show simultaneously. Having an Avid Unity works amazingly well for working on shows with multiple editors…which is the way most television production works.
Right now, Apple is not taking seriously the threat from Avid. Dealing with keeping media organized is still a nightmare. Dealing with multiple editors is a completely manual process.
Dominate the workflow process and you’ll dominate the editing market. Right now, you’re making your greatest fans feel like fools when they try and do real work with your products.
So listen here, Steve…
Get serious about workflow tools for the Apple Pro applications and prepare to dominate the DRM world by letting everyone use the iTunes DRM and you’ll continue to thrive for many more years. Fail in this regard and sadly it’s just a matter of time before Avid and Microsoft wear you down and this heyday will only be a fond memory for us Apple fans.