CDBaby Exec Recalls Getting “Dissed” by Steve Jobs in 2003

If there’s one thing that Apple fans love almost as much as their beloved Macs and iOS products, it’s hearing tales of CEO Steve Jobs from years past. The founder of music service CDBaby.com took to his blog to relate one such tale from 2003 which sheds some light on how iTunes embraced independent music.

CDBaby.com founder Derek Sivers has an interesting tale about his own encounter with Apple CEO Steve Jobs back in 2003, shortly after Cupertino unleashed the iTunes Music Store upon the world — which later became simply the iTunes Store, once the company added movies, apps and more into the mix.

The tale begins with an invitation from Apple to come to their Cupertino headquarters in May, 2003 to discuss getting CDBaby’s catalog into the iTunes Music Store, which had just made its debut two weeks earlier, its virtual shelves stocked primarily with tracks from major label artists.

Enter CEO Steve Jobs, who announces, “We want the iTunes Music Store to have every piece of music ever recorded. Even if it’s discontinued or not selling much, we want it all.” Sivers recalls this being huge news in 2003, because at the time “independent musicians were always denied access to the big outlets.”

The downside of the tale was that Apple insisted that indie music companies use their own proprietary software to create the tracks required to get onto the iTunes Music Store — quite a feat for a small company like CDBaby who had more than 100,000 albums in their catalog.

As a result, Sivers decided that they’d have to charge indie artists a modest fee for the service, which included “bandwidth and payroll costs of pulling each CD out of the warehouse, entering all the info, digitizing, uploading and putting it back in the warehouse.” That fee was , and CDBaby had 5,000 eager musicians who signed up for the service — not to mention iTunes competitors Rhapsody, Yahoo Music, Napster and eMusic who also came knocking at CDBaby’s door for the same thing.

While CDBaby was hard at work preparing these files, Apple was dragging their feet returning the signed agreement — and then Steve Jobs himself unleashed the bombshell that October in a keynote speech about iTunes, which was widely being criticized for carrying only 300,000 songs versus Rhapsody and Napster with more than two million (more than 500,000 of which came from CDBaby).

“This number could have easily been much higher, if we wanted to let in every song,” Jobs announced. “But we realize record companies do a great service. They edit! Did you know that if you and I record a song, for we can pay a few of the services to get it on their site, through some intermediaries? We can be on Rhapsody and all these other guys for ? Well, we don’t want to let that stuff on our site! So we’ve had to edit it. And these are 400,000 quality songs.”

Of course, CDBaby was the only one charging the fee at that time, meaning that Jobs was clearly dissing the company and their service, despite the fact that so many musicians were knocking down their door to get into iTunes.

Sensing that Apple was backpedaling on their commitment to indie music, Sivers did the right thing and refunded everyone’s money — all 0,000 of it!

You can probably guess what happened next — the mail arrived the following day with a signed agreement from Apple along with instructions to start uploading the CDBaby catalog. Sivers considers it a lesson learned.

“I quietly added iTunes back to the list of companies on our site,” Sivers concludes. “But I never again promised a customer that I could do something beyond my full control.”

You can watch a video of the music event in question embedded below — jump ahead to about four minutes in to hear the “diss.”

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