John Paczkowski

Recent Posts by John Paczkowski

Bill Gates on iTunes in 2003: “Jobs Has Us Flat-Footed Again”

The Comes vs. Microsoft antitrust case is proving to be a gold mine for embarrassing company communiques. First there was former Windows chief Jim Allchin’s 2004 “I would buy a Mac today if I was not working at Microsoft” email exchange with CEO Steve Ballmer.

Now comes news of another exchange, this one in 2003, in which Allchin, Bill Gates and a handful of other Microsoft (MSFT) execs react to the the debut of Apple’s (AAPL) iTunes music store and wonder how the company managed to negotiate such a good licensing deal with the recording industry.

Interesting to consider in light of reports that Apple is in talks with the television networks about lowering the price of iTunes TV episodes ahead of the iPad’s official launch.

—– Original Message —–
From: Bill Gates
Sent: Wed 4/30/2003 10:46 PM
To: Amir Majidimehr; Dave Fester
Cc: Will Poole; Christopher Payne; Yusuf Mehdi; David Cole; Hank Vigil

Subject: Apple’s Jobs again.., and time to have a great Windows download service…

Steve Jobs ability to focus in on a few things that count, get people who get user interface right and market things as revolutionary are amazing things. This time somehow he has applied his talents in getting a better Licensing deal than anyone else has gotten for music.

This is very strange to me. The music companies own operations offer a service that is truly unfriendly to the user and has been reviewed that way consistently. Somehow they decide to give Apple the ability to do something pretty good.

I remember discussing EMusic and us saying that model was better than subscription because you would know what you are getting. With the subscription who can promise you that the cool new stuff you want (or old stuff) will be there?

I am not saying this strangeness means we messed up – at least if we did so did Real and Pressplay and Musicnet and basically everyone else.

Now that Jobs has done it we need to move fast to get something where the UI and Rights are as good. I am not sure whether we should do this through one of these JVs or not. I am not sure what the problems are. However I think we need some plan to prove that even though Jobs has us a bit flat footed again we move quick and both match and do stuff better. I’m sure people have a lot of thoughts on this. If the plan is clear no meeting is needed. I want to make sure we are coordinated between Windows DMD, MSN and other groups.

…. Original Message ….
From: Jim Allchin
Sent: Wednesday, April 30, 2003 4:58 PM
To: Amir Majidimehr; Chris Jones (WINDOWS); Will Poole; David Cole

Subject: Apple’s music store

1. How did they get the music companies to go along?
2. We were smoked.

jim