Steve Jobs - iPad

STEVE JOBS - PROVES THEM WRONG AGAIN

From the book "Steve Jobs"

The Launch, January 2010


The usual excitement that Jobs was able to gin up for a product
launch paled in comparison to the frenzy that built for the iPad
unveiling on January 27, 2010, in San Francisco. The Economist
put him on its cover robed, haloed, and holding what was dubbed
"the Jesus Tablet." The Wall Street Journal struck a similarly
exalted note: "The last time there was this much excitement about
a tablet, it had some commandments written on it."
As if to underscore the historic nature of the launch, Jobs
invited back many of the old-timers from his early Apple days.
More poignantly, James Eason, who had performed his liver
transplant the year before, and Jeffrey Norton, who had operated
on his pancreas in 2004, were in the audience, sitting with his
wife, his son, and Mona Simpson.
Jobs did his usual masterly job of putting a new device into
context, as he had done for the iPhone three years earlier. This
time he put up a screen that showed an iPhone and a laptop with a
question mark in between. "The question is, is there room for
something in the middle?" he asked. That "something" would have
to be good at web browsing, email, photos, video, music, games,
and ebooks. He drove a stake through the heart of the netbook
concept. "Netbooks aren't better at anything!" he said. The
invited guests and employees cheered. "But we have something that
is. We call it the iPad."
To underscore the casual nature of the iPad, Jobs ambled over to
a comfortable leather chair and side table (actually, given his
taste, it was a Le Corbusier chair and an Eero Saarinen table)
and scooped one up. "It's so much more intimate than a laptop,"
he enthused. He proceeded to surf to the New York Times website,
send an email to Scott Forstall and Phil Schiller ("Wow, we
really are announcing the iPad"), flip through a photo album, use
a calendar, zoom in on the Eiffel Tower on Google Maps, watch
some video clips (Star Trek and Pixar's Up), show off the iBook
shelf, and play a song (Bob Dylan's "Like a Rolling Stone," which
he had played at the iPhone launch). "Isn't that awesome?" he
asked.
With his final slide, jobs emphasized one of the themes of his
life, which was embodied by the Wad: a sign showing the corner of
Technology Street and Liberal Arts Street. "The reason Apple can
create products like the iPad is that we've always tried to be at
the intersection of technology and liberal arts," he concluded.
The iPad was the digital reincarnation of the Whole Earth
Catalog, the place where creativity met tools for living.
For once, the initial reaction was not a Hallelujah Chorus. The
iPad was not yet available (it would go on sale in April), and
some who watched Jobs's demo were not quite sure what it was. An
iPhone on steroids? "I haven't been this let down since Snooki
hooked up with The Situation," wrote Newsweek's Daniel Lyons (who
moonlighted as "The Fake Steve Jobs" in an online parody).
Gizmodo ran a contributor's piece headlined "Eight Things That
Suck about the iPad" (no multitasking, no cameras, no Flash ...).
Even the name came in for ridicule in the blogosphere, with
snarky comments about feminine hygiene products and maxi pads.
The hashtag "#iTampon" was the number-three trending topic on
Twitter that day.
There was also the requisite dismissal from Bill Gates. "I still
think that some mixture of voice, the pen and a real keyboard -
in other words a netbook - will be the mainstream," he told Brent
Schlender. "So, it's not like I sit there and feel the same way I
did with the iPhone where I say, 'Oh my God, Microsoft didn't aim
high enough.' It's a nice reader, but there's nothing on the iPad
I look at and say, 'Oh, I wish Microsoft had done it.'" He
continued to insist that the Microsoft approach of using a stylus
for input would prevail. "I've been predicting a tablet with a
stylus for many years," he told me. "I will eventually turn out
to be right or be dead."
The night after his announcement, Jobs was annoyed and depressed.
As we gathered in his kitchen for dinner, he paced around the
table calling up emails and web pages on his iPhone.
I got about eight hundred email messages in the last twenty-four
hours. Most of them are complaining. There's no USB cord! There's
no this, no that. Some of them are like, "Fuck you, how can you
do that?" I don't usually write people back, but I replied, "Your
parents would be so proud of how you turned out." And some don't
like the iPad name, and on and on. I kind of got depressed today.
It knocks you back a bit.
He did get one congratulatory call that day that he appreciated,
from President Obama's chief of staff, Rahm Emanuel. But he noted
at dinner that the president had not called him since taking
office.
The public carping subsided when the iPad went on sale in April
and people got their hands on it. Both Time and Newsweek put it
on the cover. "The tough thing about writing about Apple products
is that they come with a lot of hype wrapped around them," Lev
Grossman wrote in Time. "The other tough thing about writing
about Apple products is that sometimes the hype is true." His
main reservation, a substantive one, was "that while it's a
lovely device for consuming content, it doesn't do much to
facilitate its creation." Computers, especially the Macintosh,
had become tools that allowed people to make music, videos,
websites, and blogs, which could be posted for the world to see.
"The iPad shifts the emphasis from creating content to merely
absorbing and manipulating it. It mutes you, turns you back into
a passive consumer of other people's masterpieces." It was a
criticism Jobs took to heart. He set about making sure that the
next version of the iPad would emphasize ways to facilitate
artistic creation by the user.
Newsweek's cover line was "What's So Great about the iPad?
Everything." Daniel Lyons, who had zapped it with his "Snooki"
comment at the launch, revised his opinion. "My first thought, as
I watched Jobs run through his demo, was that it seemed like no
big deal," he wrote. "It's a bigger version of the iPod Touch,
right? Then I got a chance to use an iPad, and it hit me: I want
one." Lyons, like others, realized that this was Jobs's pet
project, and it embodied all that he stood for. "He has an
uncanny ability to cook up gadgets that we didn't know we needed,
but then suddenly can't live without," he wrote. "A closed system
may be the only way to deliver the kind of techno-Zen experience
that Apple has become known for."
Most of the debate over the iPad centered on the issue of whether
its closed end-to-end integration was brilliant or doomed. Google
was starting to play a role similar to the one Microsoft had
played in the 1980s, offering a mobile platform, Android, that
was open and could be used by all hardware makers. Fortune staged
a debate on this issue in its pages. "There's no excuse to be
closed," wrote Michael Copeland. But his colleague Jon Fortt
rebutted, "Closed systems get a bad rap, but they work
beautifully and users benefit. Probably no one in tech has proved
this more convincingly than Steve Jobs. By bundling hardware,
software, and services, and controlling them tightly, Apple is
consistently able to get the jump on its rivals and roll out
polished products." They agreed that the iPad would be the
clearest test of this question since the original Macintosh.
"Apple has taken its controlfreak rep to a whole new level with
the A4 chip that powers the thing," wrote Fortt. "Cupertino now
has absolute say over the silicon, device, operating system, App
Store, and payment system."

Jobs went to the Apple store in Palo Alto shortly before noon on
April 5, the day the iPad went on sale. Daniel Kottke - his
aciddropping soul mate from Reed and the early days at Apple, who
no longer harbored a grudge for not getting founders' stock
optionsmade a point of being there. "It had been fifteen years,
and I wanted to see him again," Kottke recounted. "I grabbed him
and told him I was going to use the iPad for my song lyrics. He
was in a great mood and we had a nice chat after all these
years." Powell and their youngest child, Eve, watched from a
corner of the store.
Wozniak, who had once been a proponent of making hardware and
software as open as possible, continued to revise that opinion.
As he often did, he stayed up all night with the enthusiasts
waiting in line for the store to open. This time he was at San
Jose's Valley Fair Mall, riding a Segway. A reporter asked him
about the closed nature of Apple's ecosystem. "Apple gets you
into their playpen and keeps you there, but there are some
advantages to that," he replied. "I like open systems, but I'm a
hacker. But most people want things that are easy to use. Steve's
genius is that he knows how to make things simple, and that
sometimes requires controlling everything."
The question "What's on your iPad?" replaced "What's on your
iPod?" Even President Obama's staffers, who embraced the iPad as
a mark of their tech hipness, played the game. Economic Advisor
Larry Summers had the Bloomberg financial information app,
Scrabble, and The Federalist Papers. Chief of Staff Rahm Emanuel
had a slew of newspapers, Communications Advisor Bill Burton had
Vanity Fair and one entire season of the television series Lost,
and Political Director David Axelrod had Major League Baseball
and NPR.
Jobs was stirred by a story, which he forwarded to me, by Michael
Noer on Forbes.com. Noer was reading a science fiction novel on
his iPad while staying at a dairy farm in a rural area north of
Bogota, Colombia, when a poor six-year-old boy who cleaned the
stables came up to him. Curious, Noer handed him the device. With
no instruction, and never having seen a computer before, the boy
started using it intuitively. He began swiping the screen,
launching apps, playing a pinball game. "Steve Jobs has designed
a powerful computer that an illiterate six-year-old can use
without instruction," Noer wrote. "If that isn't magical, I don't
know what is."
In less than a month Apple sold one million iPads. That was twice
as fast as it took the iPhone to reach that mark. By March 2011,
nine months after its release, fifteen million had been sold. By
some measures it became the most successful consumer product
launch in history.

Advertising

Jobs was not happy with the original ads for the iPad. As usual,
he threw himself into the marketing, working with James Vincent
and Duncan Milner at the ad agency (now called TBWA/Media Arts
Lab), with Lee Clow advising from a semiretired perch. The
commercial they first produced was a gentle scene of a guy in
faded jeans and sweatshirt reclining in a chair, looking at
email, a photo album, the New York Times, books, and video on an
iPad propped on his lap. There were no words, just the background
beat of "There Goes My Love" by the Blue Van. "After he approved
it, Steve decided he hated it," Vincent recalled. "He thought it
looked like a Pottery Barn commercial." Jobs later told me:
It had been easy to explain what the iPod was-a thousand songs in
your pocket-which allowed us to move quickly to the iconic
silhouette ads. But it was hard to explain what an iPad was. We
didn't want to show it as a computer, and yet we didn't want to
make it so soft that it looked like a cute TV. The first set of
ads showed we didn't know what we were doing. They had a cashmere
and Hush Puppies feel to them.
James Vincent had not taken a break in months. So when the iPad
finally went on sale and the ads started airing, he drove with
his family to the Coachella Music Festival in Palm Springs, which
featured some of his favorite bands, including Muse, Faith No
More, and Devo. Soon after he arrived, Jobs called. "Your
commercials suck," he said. "The iPad is revolutionizing the
world, and we need something big. You've given me small shit."
"Well, what do you want?" Vincent shot back. "You've not been
able to tell me what you want."
"I don't know," Jobs said. "You have to bring me something new.
Nothing you've shown me is even close."
Vincent argued back and suddenly Jobs went ballistic. "He just
started screaming at me," Vincent recalled. Vincent could be
volatile himself, and the volleys escalated.
When Vincent shouted, "You've got to tell me what you want," Jobs
shot back, "You've got to show me some stuff, and I'll know it
when I see it."
"Oh, great, let me write that on my brief for my creative people:
I'll know it when I see it."
Vincent got so frustrated that he slammed his fist into the wall
of the house he was renting and put a large dent in it. When he
finally went outside to his family, sitting by the pool, they
looked at him nervously. "Are you okay?" his wife finally asked.
It took Vincent and his team two weeks to come up with an array
of new options, and he asked to present them at Jobs's house
rather than the office, hoping that it would be a more relaxed
environment. Laying storyboards on the coffee table, he and
Milner offered twelve approaches. One was inspirational and
stirring. Another tried humor, with Michael Cera, the comic
actor, wandering through a fake house making funny comments about
the way people could use iPads. Others featured the iPad with
celebrities, or set starkly on a white background, or starring in
a little sitcom, or in a straightforward product demonstration.
After mulling over the options, Jobs realized what he wanted. Not
humor, nor a celebrity, nor a demo. "It's got to make a
statement," he said. "It needs to be a manifesto. This is big."
He had announced that the iPad would change the world, and he
wanted a campaign that reinforced that declaration. Other
companies would come out with copycat tablets in a year or so, he
said, and he wanted people to remember that the iPad was the real
thing. "We need ads that stand up and declare what we have done."

He abruptly got out of his chair, looking a bit weak but smiling.
"I've got to go have a massage now," he said. "Get to work."
So Vincent and Milner, along with the copywriter Eric Grunbaum,
began crafting what they dubbed "The Manifesto." It would be
fast-paced, with vibrant pictures and a thumping beat, and it
would proclaim that the iPad was revolutionary. The music they
chose was Karen O's pounding refrain from the Yeah Yeah Yeahs
"Gold Lion." As the iPad was shown doing magical things, a strong
voice declared, "iPad is thin. iPad is beautiful.... It's crazy
powerful. It's magical.... It's video, photos. More books than
you could read in a lifetime. It's already a revolution, and it's
only just begun."
Once the Manifesto ads had run their course, the team again tried
something softer, shot as day-in-the-life documentaries by the
young filmmaker Jessica Sanders. Jobs liked them-for a little
while. Then he turned against them for the same reason he had
reacted against the original Pottery Barn-style ads. "Dammit," he
shouted, "they look like a Visa commercial, typical ad agency
stuff."
He had been asking for ads that were different and new, but
eventually he realized he did not want to stray from what he
considered the Apple voice. For him, that voice had a distinctive
set of qualities: simple, declarative, clean. "We went down that
lifestyle path, and it seemed to be growing on Steve, and
suddenly he said, 'I hate that stuff, it's not Apple,'" recalled
Lee Clow. "He told us to get back to the Apple voice. It's a very
simple, honest voice." And so they went back to a clean white
background, with just a close-up showing off all the things that
"iPad is . . ." and could do.

Apps

The iPad commercials were not about the device, but about what
you could do with it. Indeed its success came not just from the
beauty of the hardware but from the applications, known as apps,
that allowed you to indulge in all sorts of delightful
activities. There were thousands-and soon hundreds of
thousands-of apps that you could download for free or for a few
dollars. You could sling angry birds with the swipe of your
finger, track your stocks, watch movies, read books and
magazines, catch up on the news, play games, and waste glorious
amounts of time. Once again the integration of the hardware,
software, and store made it easy. But the apps also allowed the
platform to be sort of open, in a very controlled way, to outside
developers who wanted to create software and content for it-open,
that is, like a carefully curated and gated community garden.
The apps phenomenon began with the iPhone. When it first came out
in early 2007, there were no apps you could buy from outside
developers, and Jobs initially resisted allowing them. He didn't
want outsiders to create applications for the iPhone that could
mess it up, infect it with viruses, or pollute its integrity.
Board member Art Levinson was among those pushing to allow iPhone
apps. "I called him a half dozen times to lobby for the potential
of the apps," he recalled. If Apple didn't allow them, indeed
encourage them, another smartphone maker would, giving itself a
competitive advantage. Apple's marketing chief Phil Schiller
agreed. "I couldn't imagine that we would create something as
powerful as the iPhone and not empower developers to make lots of
apps," he recalled. "I knew customers would love them." From the
outside, the venture capitalist John Doerr argued that permitting
apps would spawn a profusion of new entrepreneurs who would
create new services.
Jobs at first quashed the discussion, partly because he felt his
team did not have the bandwidth to figure out all of the
complexities that would be involved in policing third-party app
developers. He wanted focus. "So he didn't want to talk about
it," said Schiller. But as soon as the iPhone was launched, he
was willing to hear the debate. "Every time the conversation
happened, Steve seemed a little more open," said Levinson. There
were freewheeling discussions at four board meetings.
Jobs soon figured out that there was a way to have the best of
both worlds. He would permit outsiders to write apps, but they
would have to meet strict standards, be tested and approved by
Apple, and be sold only through the iTunes Store. It was a way to
reap the advantage of empowering thousands of software developers
while retaining enough control to protect the integrity of the
iPhone and the simplicity of the customer experience. "It was an
absolutely magical solution that hit the sweet spot," said
Levinson. "It gave us the benefits of openness while retaining
end-to-end control."
The App Store for the iPhone opened on iTunes in July 2008; the
billionth download came nine months later. By the time the iPad
went on sale in April 2010, there were 185,000 available iPhone
apps. Most could also be used on the iPad, although they didn't
take advantage of the bigger screen size. But in less than five
months, developers had written twenty-five thousand new apps that
were specifically configured for the iPad. By July 2011 there
were 500,000 apps for both devices, and there had been more than
fifteen billion downloads of them.
The App Store created a new industry overnight. In dorm rooms and
garages and at major media companies, entrepreneurs invented new
apps. John Doerr's venture capital firm created an iFund of $200
million to offer equity financing for the best ideas. Magazines
and newspapers that had been giving away their content for free
saw one last chance to put the genie of that dubious business
model back into the bottle. Innovative publishers created new
magazines, books, and learning materials just for the iPad. For
example, the high-end publishing house Callaway, which had
produced books ranging from Madonna's Sex to Miss Spider's Tea
Party, decided to "burn the boats" and give up print altogether
to focus on publishing books as interactive apps. By June 2011
Apple had paid out $2.5 billion to app developers.
The iPad and other app-based digital devices heralded a
fundamental shift in the digital world. Back in the 1980s, going
online usually meant dialing into a service like AOL, CompuServe,
or Prodigy that charged fees for access to a carefully curated
walled garden filled with content plus some exit gates that
allowed braver users access to the Internet at large. The second
phase, beginning in the early 1990s, was the advent of browsers
that allowed everyone to freely surf the Internet using the
hypertext transfer protocols of the World Wide Web, which linked
billions of sites. Search engines arose so that people could
easily find the websites they wanted. The release of the iPad
portended a new model. Apps resembled the walled gardens of old.
The creators could charge fees and offer more functions to the
users who downloaded them. But the rise of apps also meant that
the openness and linked nature of the web were sacrificed. Apps
were not as easily linked or searchable. Because the iPad allowed
the use of both apps and web browsing, it was not at war with the
web model. But it did offer an alternative, for both the
consumers and the creators of content.

Publishing and journalism

With the iPod, jobs had transformed the music business. With the
iPad and its App Store, he began to transform all media, from
publishing to journalism to television and movies.
Books were an obvious target, since Amazon's "Kindle" had shown
there was an appetite for electronic books. So Apple created an
iBooks Store, which sold electronic books the way the iTunes
Store sold songs. There was, however, a slight difference in the
business model. For the iTunes Store, Jobs had insisted that all
songs be sold at one inexpensive price, initially 99 cents.
Amazon's Jeff Bezos had tried to take a similar approach with
ebooks, insisting on selling them for at most $9.99. Jobs came in
and offered publishers what he had refused to offer record
companies: They could set any price they wanted for their wares
in the iBooks Store, and Apple would take 30%. Initially that
meant prices were higher than on Amazon. Why would people pay
Apple more? "That won't be the case," Jobs answered, when Walt
Mossberg asked him that question at the iPad launch event. "The
price will be the same." He was right.
The day after the iPad launch, jobs described to me his thinking
on books:

Amazon screwed it up. It paid the wholesale price for some
books, but started selling them below cost at $9.99. The
publishers hated thatthey thought it would trash their
ability to sell hardcover books at $28. So before Apple even
got on the scene, some booksellers were starting to withhold
books from Amazon. So we told the publishers, "We'll go to
the agency model, where you set the price, and we get our
30%, and yes, the customer pays a little more, but that's
what you want anyway." But we also asked for a guarantee
that if anybody else is selling the books
cheaper than we are, then we can sell them at the lower
price too. So they went to Amazon and said, "You're going to
sign an agency contract or we're not going to give you the
books."

Jobs acknowledged that he was trying to have it both ways when it
came to music and books. He had refused to offer the music
companies the agency model and allow them to set their own
prices. Why? Because he didn't have to. But with books he did.
"We were not the first people in the books business," he said.
"Given the situation that existed, what was best for us was to do
this akido move and end up with the agency model. And we pulled
it off."

Right after the iPad launch event, Jobs traveled to New York in
February 2010 to meet with executives in the journalism business.
In two days he saw Rupert Murdoch, his son James, and the
management of their Wall Street Journal; Arthur Sulzberger Jr.
and the top executives at the New York Times; and executives at
Time, Fortune, and other Time Inc. magazines. "I would love to
help quality journalism," he later said. "We can't depend on
bloggers for our news. We need real reporting and editorial
oversight more than ever. So I'd love to find a way to help
people create digital products where they actually can make
money." Since he had gotten people to pay for music, he hoped he
could do the same for journalism.
Publishers, however, turned out to be leery of his lifeline. It
meant that they would have to give 30% of their revenue to Apple,
but that wasn't the biggest problem. More important, the
publishers feared that, under his system, they would no longer
have a direct relationship with their subscribers; they wouldn't
have their email address and credit card number so they could
bill them, communicate with them, and market new products to
them. Instead Apple would own the customers, bill them, and have
their information in its own database. And because of its privacy
policy, Apple would not share this information unless a customer
gave explicit permission to do so.

Jobs was particularly interested in striking a deal with the New
York Times, which he felt was a great newspaper in danger of
declining because it had not figured out how to charge for
digital content. "One of my personal projects this year, I've
decided, is to try to help - whether they want it or not - the
Times," he told me early in 2010. "I think it's important to the
country for them to figure it out."
During his New York trip, he went to dinner with fifty top Times
executives in the cellar private dining room at Pranna, an Asian
restaurant. (He ordered a mango smoothie and a plain vegan pasta,
neither of which was on the menu.) There he showed off the iPad
and explained how important it was to find a modest price point
for digital content that consumers would accept. He drew a chart
of possible prices and volume. How many readers would they have
if the Times were free? They already knew the answer to that
extreme on the chart, because they were giving it away for free
on the web already and had about twenty million regular visitors.
And if they made it really expensive? They had data on that too;
they charged print subscribers more than $300 a year and had
about a million of them. "You should go after the midpoint, which
is about ten million digital subscribers," he told them. "And
that means your digital subs should be very cheap and simple, one
click and $5 a month at most."
When one of the Times circulation executives insisted that the
paper needed the email and credit card information for all of its
subscribers, even if they subscribed through the App Store, Jobs
said that Apple would not give it out. That angered the
executive. It was unthinkable, he said, for the Times not to have
that information. "Well, you can ask them for it, but if they
won't voluntarily give it to you, don't blame me," Jobs said. "If
you don't like it, don't use us. I'm not the one who got you in
this jam. You're the ones who've spent the past five years giving
away your paper online and not collecting anyone's credit card
information."

Jobs also met privately with Arthur Sulzberger Jr. "He's a nice
guy, and he's really proud of his new building, as he should be,"
Jobs said later. "I talked to him about what I thought he ought
to do, but then nothing happened." It took a year, but in April
2011 the Times started charging for its digital edition and
selling some subscriptions through Apple, abiding by the policies
that Jobs established. It did, however, decide to charge
approximately four times the $5 monthly charge that Jobs had
suggested.

At the Time-Life Building, Time's editor Rick Stengel played
host. Jobs liked Stengel, who had assigned a talented team led by
Josh Quittner to make a robust iPad version of the magazine each
week. But he was upset to see Andy Serwer of Fortune there.
Tearing up, he told Serwer how angry he still was about Fortune's
story two years earlier revealing details of his health and the
stock options problems. "You kicked me when I was down," he said.
The bigger problem at Time Inc. was the same as the one at the
Times: The magazine company did not want Apple to own its
subscribers and prevent it from having a direct billing
relationship. Time Inc. wanted to create apps that would direct
readers to its own website in order to buy a subscription. Apple
refused. When Time and other magazines submitted apps that did
this, they were denied the right to be in the App Store.
Jobs tried to negotiate personally with the CEO of Time Warner,
Jeff Bewkes, a savvy pragmatist with a no-bullshit charm to him.
They had dealt with each other a few years earlier over video
rights for the iPod Touch; even though Jobs had not been able to
convince him to do a deal involving HBO's exclusive rights to
show movies soon after their release, he admired Bewkes's
straight and decisive style. For his part, Bewkes respected
Jobs's ability to be both a strategic thinker and a master of the
tiniest details. "Steve can go readily from the overarching
principals into the details," he said.
When Jobs called Bewkes about making a deal for Time Inc.
magazines on the ipad, he started off by warning that the print
business "sucks," that "nobody really wants your magazines," and
that Apple was offering a great opportunity to sell digital
subscriptions, but "your guys don't get it." Bewkes didn't agree
with any of those premises. He said he was happy for Apple to
sell digital subscriptions for Time Inc. Apple's 30% take was not
the problem. "I'm telling you right now, if you sell a sub for
us, you can have 30%," Bewkes told him.
"Well, that's more progress than I've made with anybody," Jobs
replied.
"I have only one question," Bewkes continued. "If you sell a
subscription to my magazine, and I give you the 30%, who has the
subscription - you or me?"
"I can't give away all the subscriber info because of Apple's
privacy policy," Jobs replied.
"Well, then, we have to figure something else out, because I
don't want my whole subscription base to become subscribers of
yours, for you to then aggregate at the Apple store," said
Bewkes. "And the next thing you'll do, once you have a monopoly,
is come back and tell me that my magazine shouldn't be $4 a copy
but instead should be $1. If someone subscribes to our magazine,
we need to know who it is, we need to be able to create online
communities of those people, and we need the right to pitch them
directly about renewing."

Jobs had an easier time with Rupert Murdoch, whose News Corp.
owned the Wall Street Journal, New York Post, newspapers around
the world, Fox Studios, and the Fox News Channel. When Jobs met
with Murdoch and his team, they also pressed the case that they
should share ownership of the subscribers that came in through
the App Store. But when Jobs refused, something interesting
happened. Murdoch is not known as a pushover, but he knew that he
did not have the leverage on this issue, so he accepted Jobs's
terms. "We would prefer to own the subscribers, and we pushed for
that," recalled Murdoch. "But Steve wouldn't do a deal on those
terms, so I said, 'Okay, let's get on with it.' We didn't see any
reason to mess around. He wasn't going to bend - and I wouldn't
have bent if I were in his position - so I just said yes."
Murdoch even launched a digital-only daily newspaper, The Daily,
tailored specifically for the iPad. It would be sold in the App
Store, on the terms dictated by jobs, at 99 cents a week. Murdoch
himself took a team to Cupertino to show the proposed design. Not
surprisingly, Jobs hated it. "Would you allow our designers to
help?" he asked. Murdoch accepted. "The Apple designers had a
crack at it," Murdoch recalled, "and our folks went back and had
another crack, and ten days later we went back and showed them
both, and he actually liked our team's version better. It stunned
us."
The Daily, which was neither tabloidy nor serious, but instead a
rather midmarket product like USA Today, was not very successful.
But it did help create an odd-couple bonding between Jobs and
Murdoch. When Murdoch asked him to speak at his June 2010 News
Corp. annual management retreat, Jobs made an exception to his
rule of never doing such appearances. James Murdoch led him in an
after-dinner interview that lasted almost two hours. "He was very
blunt and critical of what newspapers were doing in technology,"
Murdoch recalled. "He told us we were going to find it hard to
get things right, because you're in New York, and anyone who's
any good at tech works in Silicon Valley." This did not go down
very well with the president of the Wall Street Journal Digital
Network, Gordon McLeod, who pushed back a bit. At the end, McLeod
came up to Jobs and said, "Thanks, it was a wonderful evening,
but you probably just cost me my job." Murdoch chuckled a bit
when he described the scene to me. "It ended up being true," he
said. McLeod was out within three months.

In return for speaking at the retreat, Jobs got Murdoch to hear
him out on Fox News, which he believed was destructive, harmful
to the nation, and a blot on Murdoch's reputation. "You're
blowing it with Fox News," Jobs told him over dinner. "The axis
today is not liberal and conservative, the axis is
constructive-destructive, and you've 'cast your lot with the
destructive people. Fox has become an incredibly destructive
force in our society. You can be better, and this is going to be
your legacy if you're not careful." Jobs said he thought Murdoch
did not really like how far Fox had gone. "Rupert's a builder,
not a tearerdowner," he said. "I've had some meetings with James,
and I think he agrees with me. I can just tell."
Murdoch later said he was used to people like Jobs complaining
about Fox. "He's got sort of a left-wing view on this," he said.
Jobs asked him to have his folks make a reel of a week of Sean
Hannity and Glenn Beck shows - he thought that they were more
destructive than Bill O'Reilly - and Murdoch agreed to do so.
Jobs later told me that he was going to ask Jon Stewart's team to
put together a similar reel for Murdoch to watch. "I'd be happy
to see it," Murdoch said, "but he hasn't sent it to me."
Murdoch and Jobs hit it off well enough that Murdoch went to his
Palo Alto house for dinner twice more during the next year. Jobs
joked that he had to hide the dinner knives on such occasions,
because he was afraid that his liberal wife was going to
eviscerate Murdoch when he walked in. For his part, Murdoch was
reported to have uttered a great line about the organic vegan
dishes typically served: "Eating dinner at Steve's is a great
experience, as long as you get out before the local restaurants
close." Alas, when I asked Murdoch if he had ever said that, he
didn't recall it.

One visit came early in 2011. Murdoch was due to pass through
Palo Alto on February 24, and he texted Jobs to tell him so. He
didn't know it was Jobs's fifty-sixth birthday, and Jobs didn't
mention it when he texted back inviting him to dinner. "It was my
way of making sure Laurene didn't veto the plan," Jobs joked. "It
was my birthday, so she had to let me have Rupert over." Erin and
Eve were there, and Reed jogged over from Stanford near the end
of the dinner. Jobs showed off the designs for his planned boat,
which Murdoch thought looked beautiful on the inside but "a bit
plain" on the outside. "It certainly shows great optimism about
his health that he was talking so much about building it,"
Murdoch later said.
At dinner they talked about the importance of infusing an
entrepreneurial and nimble culture into a company. Sony failed to
do that, Murdoch said. Jobs agreed. "I used to believe that a
really big company couldn't have a clear corporate culture," jobs
said. "But I now believe it can be done. Murdoch's done it. I
think I've done it at Apple."
Most of the dinner conversation was about education. Murdoch had
just hired Joel Klein, the former chancellor of the New York City
Department of Education, to start a digital curriculum division.
Murdoch recalled that Jobs was somewhat dismissive of the idea
that technology could transform education. But Jobs agreed with
Murdoch that the paper textbook business would be blown away by
digital learning materials.
In fact Jobs had his sights set on textbooks as the next business
he wanted to transform. He believed it was an $8 billion a year
industry ripe for digital destruction. He was also struck by the
fact that many schools, for security reasons, don't have lockers,
so kids have to lug a heavy backpack around. "The iPad would
solve that," he said. His idea was to hire great textbook writers
to create digital versions, and make them a feature of the ipad.

In addition, he held meetings with the major publishers, such as
Pearson Education, about partnering with Apple. "The process by
which states certify textbooks is corrupt," he said. "But if we
can make the textbooks free, and they come with the iPad, then
they don't have to be certified. The crappy economy at the state
level will last for a decade, and we can give them an opportunity
to circumvent that whole process and save money."
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