Acquired Episode 38: SoundJam (iTunes‪)‬

In episode 38 of the Acquired podcast, hosts Ben Gilbert and David Rosenthal delve into Apple's acquisition of SoundJam MP in 2000, a pivotal move that led to the development of iTunes. This acquisition not only marked Apple's foray into digital music, shaping its future strategy, but also brought former Apple engineers Jeff Robbin, Bill Kincaid, and Dave Heller back into the fold. The trio played instrumental roles in transforming SoundJam into iTunes, which became a cornerstone of Apple's digital hub strategy and set the stage for the iPod and iPhone revolutions. The hosts reflect on the competitive landscape of MP3 players at the time, the significance of SoundJam's features like the visualizer, and the broader impact of Apple's decision to integrate music management software into its ecosystem.

• SoundJam MP was a popular MP3 player application for Macintosh computers in the late 1990s.
• Developed by Jeff Robbin, Bill Kincaid, and Dave Heller, SoundJam MP provided a user-friendly interface for playing and managing MP3 files.
• The application was known for its customizable skins and the brushed metal UI, which influenced Apple's software design for several years.
• Apple acquired SoundJam MP in 2000, which subsequently evolved into iTunes.

"Today we are covering Apple's 2000 acquisition of SoundJam, which would go on to become iTunes."

• This quote sets the stage for the discussion, indicating the podcast's focus on the acquisition that led to the development of iTunes.

"Soundjam was awesome. I remember before Apple acquired them, and then we found out there was going to be an iTunes playing with SoundJam."

• The speaker reminisces about the quality of SoundJam before its acquisition by Apple, suggesting that it was a well-regarded application at the time.

"So Jeff Robin and Bill Kincaid worked at Apple in the mid-nineties... they end up leaving the company."

• This quote provides background on the developers of SoundJam, who previously worked at Apple and later pursued their own project that became SoundJam.

"Jeff and Bill were really good engineers and Apple really highly regarded."

• This quote emphasizes the developers' expertise and reputation, which contributed to their success in creating SoundJam.

• Jeff Robbin and Bill Kincaid left Apple after the Copland operating system project failed.
• Robbin was known for creating Conflict Catcher, a software to manage system extensions on Mac OS.
• Kincaid, inspired by the MP3 format and its potential, decided to create software to manage MP3 files on Macs.
• They formed a team, including Dave Heller, to develop SoundJam MP, focusing on backend encoding and a user-friendly frontend.
• SoundJam MP was distributed by Cassidy and Green, with a manual written by David Pogue, who later became a well-known tech journalist.

"He hears on NPR this discussion of MP3s... He's like, 'Well, I bet I can make it work with Macs.'"

• Kincaid's inspiration for SoundJam came from a radio segment about MP3s, highlighting the need for Mac-compatible MP3 software.

"They decide to call it SoundJam... It's the only Mac MP3 tool capable of not only playing back MP3 files but also encoding tracks from audio CDs."

• SoundJam MP was notable for its comprehensive features, including playback and encoding, which were praised by Macworld magazine.

"The UI is... the stock UI, as we were saying, you could download skins for it and customize it, which were skins for software. It was all the rage at this time."

• The customizable skins and brushed metal UI of SoundJam MP were significant selling points that attracted users and influenced future Apple software design.

• Apple's acquisition of SoundJam MP in 2000 marked a turning point for the company's involvement in digital music.
• The acquisition led to the development of iTunes, which became a cornerstone of Apple's music strategy and ecosystem.
• iTunes played a key role in the success of the iPod and the digital music revolution.

"So fast forward from me playing the MP3s off my zip disk and actually playing them through an application. SoundJam was awesome."

• The speaker reflects on the transition from rudimentary MP3 management to using SoundJam, underscoring the application's importance in the evolution of digital music on Macs.

"This is going to be a fun one... We're really excited to dive in here."

• The hosts express enthusiasm for discussing the history of SoundJam and its impact on the technology industry, setting the tone for a detailed exploration of the topic.

• The podcast includes an advertisement for Statsig, a company that provides tools for data-driven product decisions.
• Statsig is noted for its impressive scale, processing a significant volume of events per day and serving a large percentage of the world's population.
• Notable customers of Statsig include major tech companies like Microsoft and Atlassian.

(Note: As per the user's instructions, the advertisement content is not included in the study notes.)

• The podcast episode delves into the story of SoundJam MP, its acquisition by Apple, and its transformation into iTunes.
• The discussion highlights the technical challenges, market dynamics, and strategic decisions that led to the creation of a pivotal piece of software in the digital music era.
• The hosts' personal experiences and industry insights provide context for understanding the significance of SoundJam MP and iTunes in the broader tech landscape.

• Digital music visualizers were a feature in early digital music players that transformed sound waves into visual landscapes.
• Steve Jobs was particularly fond of this feature, reminiscing about its similarity to his experiences with LSD.
• Apple included a visualizer in iTunes, which was inspired by earlier players like Winamp.

"But when you would listen to digital music on a digital music player on your computer, you could have the option to have a visualizer where it would take the sound waves from the mp3 you were listening to and then put it through all these transformations and make it into this psychedelic landscape that you were watching in time to the music."

• The quote explains the function and appeal of digital music visualizers, which were a nostalgic and innovative feature for users.

• Apple recognized the staying power of digital music and saw an opportunity to integrate technology with the music industry.
• Steve Jobs, after becoming permanent CEO of Apple in early 2000, initiated a strategy focusing on music, starting with iTunes.
• The iPod and the digital hub strategy were key to Apple's success, with iTunes as the software hub.
• Apple's ecosystem approach led to increased Mac sales, as consumers switched from PCs to Macs for compatibility with the iPod.

"And the first thing that he does after this has happened is he starts to initiate the grandmaster strategy. That would be really what sets Apple on the path to being relevant again and becoming the largest company in the world, which is music."

• This quote highlights the strategic importance of music in Apple's resurgence and eventual dominance in the tech industry.

• Apple aimed to accelerate iTunes development by acquiring existing market players.
• Apple released a basic Music Player in June 2000, which was the precursor to iTunes.
• SoundJam and Audion were two leading products in the market, with Audion developed by an indie dev shop called Panic.
• Panic had a rich history in Mac OS development and had quirky company traditions.

"So there's sound jam, obviously. And then there's also, as Ben alluded to, another product at this point in the market called Audion. And audion was made by an indie dev shop in Portland."

• The quote introduces Audion and Panic, key players in the music software market that Apple considered for acquisition.

• The consumerization of the Internet was still early, and Mac software was a tiny market segment.
• There was venture capital available, but it was mostly directed at Internet companies.
• The digital music revolution was not a major focus area for VCs, possibly due to a lack of foresight or the niche market of Mac-only software.
• None of the music software companies, including Napster and Winamp, had significant exits.

"But I think a couple of things. Like one, we're talking about Mac only, and that was just a tiny, tiny portion of the market at that point, at least from a vc perspective."

• This quote discusses why the music software market, particularly Mac-only applications, did not attract significant venture capital interest.

• Apple successfully met with SoundJam, which was then transformed into iTunes.
• Panic, the developers of Audion, had been in negotiations with AOL but never met with Apple due to misunderstandings and AOL's bureaucracy.
• AOL's acquisition of Audion fell through, and Apple then acquired SoundJam, which was kept quiet from the public.

"So Apple tries to meet with both Soundjam and Audion. They're obviously successful in meeting with Soundjam, and they know the folks there well, since they were all former Apple employees."

• The quote reveals Apple's successful acquisition of SoundJam and its attempt to meet with Audion, highlighting the behind-the-scenes business maneuvers.

• Panic's founders, Cable Sasser and Steven Frank, were approached by Steve Jobs with a one-liner email suggesting a partnership.
• Jobs' direct approach and negotiation style were unconventional, often involving candid and blunt statements.
• Jobs offered Panic an opportunity to join Apple, but the founders decided to remain independent.

"Apple had reached out to them. Well, I don't know if it was jobs. Apple had reached out to them."

• This quote reflects the ambiguity of the initial communication between Apple and Panic, which eventually led to direct negotiations with Steve Jobs.

• Steve Jobs' straightforward and sometimes harsh communication may have influenced Panic's decision to decline Apple's offer.
• Jobs was known for his directness and confidence in his strategic vision, which was often proven correct in hindsight.

"And Steve says, oh, really? Well, that's interesting, because honestly, I don't think you guys have a chance."

• This quote exemplifies Steve Jobs' blunt assessment of Panic's chances against Apple's iTunes, showcasing his characteristic straightforwardness and foresight.

• Steve Jobs, despite his difficult personality, was recognized as a true visionary.
• His foresight and drive were instrumental in shaping the future of technology and music.
• Jobs' influence on Apple's direction and product innovation was profound and lasting.

"He was a jerk and he was right. For all his personality foibles, he really was a visionary."

The quote emphasizes Steve Jobs' complex character, acknowledging his challenging personality but also his exceptional foresight and impact on the tech industry.

• Discussion on what might have happened if Apple had acquired Audion instead of SoundJam.
• Speculation on the alternate outcomes and roles the Audion team might have had at Apple.
• Acknowledgment of Apple's intent to build on existing validated products for iTunes.

"There's one fork where maybe they acquire Audion instead of SoundJam, and then sort of the same thing happens, but the two parties are switched."

This quote reflects on a hypothetical scenario where Apple's acquisition history could have differed, leading to a different set of outcomes for the parties involved.

• SoundJam's team, including Jeff Robbin, played significant roles at Apple post-acquisition.
• Robbin's contributions to iTunes, the iPod, and other projects highlight the acquisition's long-term value.
• Steve Jobs' protection of his team from poaching by competitors demonstrates the strategic importance of the acquisition.

"All the SoundJam guys are still 15-17 years later, all at Apple. And Jeff Robbin is actually, he's VP of consumer applications."

This quote notes the longevity and influential positions held by the SoundJam team at Apple, indicating a successful integration and the importance of their expertise to Apple's product development.

• The SoundJam acquisition is characterized as a people acquisition rather than technology.
• Apple valued the expertise and understanding of MP3 software held by the SoundJam team.
• The acquisition's success was due in part to the unique skills and knowledge brought by the acquired team.

"This was a people acquisition... It's really the people that have played around with this newish MP3 software."

The quote distinguishes between different types of acquisitions, emphasizing that the SoundJam deal was primarily about acquiring skilled individuals rather than just technology.

• Discussion on the expiration of MP3 file format patents and its implications for developers.
• The patent-free status of MP3 allows for legal development of MP3 applications without licensing concerns.
• Reflection on the changing landscape of digital audio formats and their management.

"The MP3 file format patents actually expired last month... MP3 for the first time is a patent-free file format."

This quote highlights a significant moment in the digital audio industry, marking the point where MP3 technology became freely available for use without patent restrictions.

• The shift from owning music collections to using subscription services like Spotify.
• Examination of how personal identity is expressed through digital collections and subscriptions.
• Discussion on the broader trend of services replacing ownership across various domains.

"I don't have a music library, which was a part of my identity for a while because I subscribe to Spotify and it's all available on demand."

This quote illustrates the personal impact of the transition from music ownership to streaming subscriptions, reflecting a broader societal shift in consumption habits.

• The search for new forms of individual expression as traditional signifiers like music collections become less common.
• The potential homogenizing effect of social networks on individuality.
• Speculation on whether there will be a resurgence of physical and individual expression in response to digital uniformity.

"What are the new signifiers of identity?"

This quote prompts reflection on how people express their uniqueness in an era where access to digital content and social platforms is ubiquitous and standardized.

• The rarity of companies reacquiring former employees through start-up acquisitions.
• The more common practice of acquiring companies started by individuals from rival firms.
• Consideration of the strategic implications of acquiring talent from competitors.

"Is that a common thread of someone leaving the company, starting a thing and it getting bought and bringing them back in? It seemed like it was a common thing."

The quote questions the frequency of a specific acquisition strategy, where a company reacquires former employees by purchasing their start-ups, and reflects on its prevalence in the tech industry.

• The risk of third-party applications being made redundant by platform-native features.
• The varying outcomes for developers when platforms introduce competing features.
• The importance of having a unique value proposition to survive platform competition.

"There are times where that is terrible and there are other times where they do a bare bones implementation on the platform level and it gets better for everyone."

This quote discusses the double-edged sword of platform integration for third-party developers, highlighting the need for differentiation to maintain relevance despite platform competition.

• Steve Jobs' ability to create products that resonated with a wide audience due to their depth and simplicity.
• The connection between Jobs' personal passions and Apple's successful product strategies.
• The impact of Jobs' leadership on Apple's product development and market dominance.

"Maybe Steve kind of was the everyman in his interests, where when he decided, this is a passion of mine and music is a passion of mine, and we're going to go deep into music and be a music company, that actually was something that just did resonate with tons and tons and tons of people."

The quote suggests that Steve Jobs' personal interests and focus on deep, full-featured products were key to Apple's alignment with consumer desires and subsequent success.

• Steve Jobs had a clear vision and was exacting in managing products to align with technology trends and consumer desires.
• Danger in managing products solely based on specifications or trying to time a wave without solving a problem.

"And I think this is a key component of why he was so right, was he had an experience in his mind that he had a vision of that was so clear to him and that he wanted, and then he was so exacting in managing the products to really, really solve that need and bring delight to what he wanted and that aligned with technology trends and with what lots of people wanted."

This quote emphasizes the importance of having a clear vision and being meticulous in product management to create successful and delightful products that resonate with both technology trends and consumer needs.

• Technology has evolved from the complexity of MP3 codecs to more abstracted forms of programming.
• Abstraction layers have progressed from assembly language to more visual forms of programming.
• Specialized knowledge of underlying technology remains valuable for differentiation and solving complex problems.

"Layers of abstraction that you used to have to write assembly language or even before that the hex or the binary, and then you get the Evan and machine language. And then ever since, you just keep building more abstraction layers on top of the stack."

This quote discusses the historical progression of abstraction in programming, highlighting how each new layer builds upon the previous, simplifying development while still valuing deep technical knowledge for complex tasks.

• It's challenging to compete with free products in technology.
• Long-term value is captured by creating ecosystems or networks rather than mere utilities.
• Instagram's transition from a photo filter utility to a social network exemplifies the importance of building around a core utility.

"And if you have a utility app and it's just a utility, somebody, if there is a big enough market for that, somebody is going to come along and make it free. And you are not going to be able to capture long term value just from utility."

This quote highlights the difficulty of sustaining a business on utility alone and the necessity of creating an ecosystem or network to capture long-term value in the technology industry.

• Financial impact of acquisitions can be difficult to quantify, especially when purchase prices are small.
• The long-term value of a product ecosystem can be immense, as seen with Apple's services revenue.
• Strategic acquisitions can accelerate business growth and contribute to building the best business models.

"And so just for fun, like, I went and looked at last quarter's financials. They break out services revenue. So Apple has like the Mac iPod, no Mac iPhone, they break out a few different product lines and one of them is services. And that alone last quarter was $7 billion."

This quote illustrates the significant financial impact of Apple's service revenue, demonstrating how strategic acquisitions and product ecosystems can lead to substantial long-term business success.

• Amazon is continually innovating, as evidenced by the release of the Echo Show.
• The Echo Show and future versions of Alexa could become the hub of Amazon's e-commerce and communication platforms.

"And you can see the potential here for something like the show and future versions of Alexa and echoes to become the hub of Amazon, the hub of e-commerce."

The quote speculates on the potential for Amazon's Echo Show and Alexa to become central to the company's e-commerce strategy, highlighting the power of a digital hub strategy.

• Major League Baseball's decision to stream games on Facebook may indicate a shift in how sports content is distributed.
• The move could reflect MLB's strategic flexibility and focus on reaching audiences through various platforms.

"But I would assume it will be done on Facebook's infrastructure, not Bamtechs, which is interesting given Bamtech is now an independent company outside of MLB."

This quote suggests that MLB's partnership with Facebook for streaming games is a strategic move to reach audiences on different platforms and may signify a shift away from reliance on Bamtech's infrastructure.

• Snap's first earnings call revealed significant losses, but the focus should be on user growth and competition from Instagram.
• The company's future depends on its ability to reignite user growth and differentiate its offerings.

"But I think the $2.2 billion loss was very overhyped. It's a one time event with a lot of these RSUs, much of it the public already knew about."

This quote downplays the significance of Snap's reported financial loss, suggesting that it was expected and that the key issue for the company is whether it can reinvigorate user growth amidst competition.

• Traveling to Israel provided a deeper understanding of the Middle East and its importance to Western civilization.
• Experiencing different cultures firsthand is recommended for gaining perspective on global issues and history.

"And neither of us had ever been before and was just such an amazing eye-opening experience in so many ways."

This quote reflects on the enriching experience of traveling to Israel and encourages others to visit and gain a deeper understanding of the region and its significance.