Apple Music and Apple’s Focus

In a spot-on introduction to a spot-on piece, Dr. Drang nails why, at least in the context of yesterday’s WWDC keynote, Apple Music was such a disaster:

Endings are important, which is, unfortunately, why today’s WWDC keynote will be remembered as a flop.

Two weeks ago I wrote about how Google I/O (members-only) was two separate keynotes: the beginning was about Google doing stuff primarily, at least as far as I could tell, because they were big; the second part was about Google furthering their original mission and doing what they do best — “Organize the World’s Information” — and it was incredibly compelling and exciting.

WWDC went in the other direction. The first 90 minutes were excellent: very tight, with excellent clarity and momentum, well-rehearsed speakers delivering mostly iterative announcements with the occasional surprise. The final 60, on the other hand — the “one more thing” — were the exact opposite: unclear and dragging, with unprepared speakers delivering…well, I’m honestly not sure what most of them were saying. If there was a surprise the lack of a coherent message has to be top of the list.

After all, as Apple CEO Tim Cook so frequently reminds us, “Apple loves music”. Most of us, including myself, have for years given Apple the benefit of the doubt when it comes to such statements, even as the company’s flagship music product, iTunes, has fallen into an increasingly unusable state, and even as the App Store has long since surpassed the iTunes Music Store as a source of not only revenue but more importantly differentiation. When Apple’s annual music event was switched to a grab-all product announcement in the face of plummeting iPod sales, itself reduced to an app, no one questioned Cook’s insistence that music is “in our DNA”.

There is no question that music was in Steve Jobs’ DNA, and you could certainly argue that that specific aspect of Jobs’ DNA was a key component in transforming Apple from a barely solvent niche computer maker to one capable of creating an iPhone, an App Store, and everything else that makes Apple the most valuable company in the world. None of the latter happened without the iPod, without the iTunes Music Store, without that DNA.

Moreover, to be perfectly clear, the ending of the annual music event, the diminution of the iPod, the eclipse of the iTunes Music Store — each of these was the natural order of things. An important part of what makes Apple so impressive as a company is its willingness to destroy its own businesses, an approach that requires always looking forward to the way the world will be, not backwards to the world as it once was (not to mention an organizational design and incentive structures that remove the very real human tendency to preserve and protect). Recall what Tim Cook said about Steve Jobs at the Apple founder’s memorial:

“Among his last advice he had for me, and for all of you, was to never ask what he would do. ‘Just do what’s right,’” Cook said. Jobs wanted Apple to avoid the trap that Walt Disney Co. fell into after the death of its iconic founder, Cook said, where “everyone spent all their time thinking and talking about what Walt would do.”

Here is my question about Apple Music: it certainly is what most of us think Jobs would do. But is it right?

We know streaming is the future (and, for all intents and purposes, especially when you include YouTube — as you must — the present). Sure, iTunes music is DRM-free, and pirated content is as easy to access as ever, but on mobile devices where space, bandwidth, and time are limited, actual music files you have to move from device to device are as obsolete as physical CDs were once the iPod came along.

The business and strategic implications of this shift are profound: the labels would have never made the original deal with Apple had the Cupertino company not been so clearly the lesser of two evils, which means Apple would never have come to dominate their revenue (and thus to gain monopsony power). But now that the piracy threat is inconsequential the labels are unencumbered in their ability to exact monopoly rents from their music collections, ensuring any streaming service operates at their pleasure, on their terms. Including Apple.

Moreover, the fact that the iPod became just an app is symbolic of a far more profound shift: Apple has become a platform company in a way they never were even in the Mac’s heyday, and certainly unlike they were when the iPod was king. Perhaps the right thing to do is to enable — and extract rents from — services with not just the DNA but also the incentives and focus to deliver a compelling music experience.

I can hear the pushback now: A streaming service is table stakes, it’s an essential part of the ecosystem, Apple needs to diversify into services (Android app!). I get it. It makes no strategic sense to not have a music service. On paper anyway. The great thing about Apple, though, what has made the company so unlike every other, is another lesson Cook learned from Jobs. From the Goldman Sachs Technology and Internet Conference earlier this year:

We are the most focused company that I know of, or have read of, or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number, so that we can put enormous energy behind the ones we do choose, so that we can deliver the best products in the world…

That is not from just saying “Yes” to the right product which gets a lot of focus. It’s saying no to many products that are good ideas, but just not nearly as good as the other ones. And so I think that this is so ingrained in our company that this hubris that you talk about which happens to companies that are successful but then decide that their sole role in life is to get bigger, and they start adding this and that and this and that. I can tell you the management team of Apple would never let that happen. That’s not what we’re about.

“That” sure sounds like Apple Music: there is this (streaming music) and that (curated lists) and this (BeatsOne radio) and that (Ping Connect) and no cogent thread to tie them together beyond the assumption that Apple must do a music service because that is what they do. That’s what big companies do.

Moreover, it’s not like this was the only example of Apple failing to question its assumptions and subsequently losing focus. Yesterday’s demonstration of native Watch apps was very good, but in a very “Why does WatchKit even exist?” sort of way. When the Watch came out most reviews concluded that the Watch made a lot of sense in the long run, but few could get over just how poor the app experience was, with many concluding customers ought to wait.

Imagine an alternate reality where the Watch had the exact same Watch face functionality (including complications), the exact same notifications and communications capabilities, the exact same performant Apple apps, the exact same unexpectedly strong battery life, but no apps beyond a promise they were “coming soon.” Surely reviewers would gripe, but with a “It’s already great, and it’s going to get better” sort of vibe. Yet Apple couldn’t bring themselves to say “no”.

Indeed, what made the first half of yesterday’s keynote so compelling wasn’t just the speakers’ delivery; rather, the clarity of the delivery flowed from the fact Apple was doing what they do best: iterating on products that, once upon a time, were minimum viable products from a feature perspective delivered with a maximum focus on the user experience. John Gruber perfectly captured this quality of Apple in a 2010 piece called This is How Apple Rolls:

Apple has released many new products over the last decade. Only a handful have been the start of a new platform. The rest were iterations. The designers and engineers at Apple aren’t magicians; they’re artisans. They achieve spectacular results one year at a time. Rather than expanding the scope of a new product, hoping to impress, they pare it back, leaving a solid foundation upon which to build. In 2001, you couldn’t look at Mac OS X or the original iPod and foresee what they’d become in 2010. But you can look at Snow Leopard and the iPod nanos of today and see what they once were. Apple got the fundamentals right.

Maybe Apple Music will be great. Maybe the fundamentals are spot on. But the messaging certainly was not, and as I noted after the Watch unveiling, muddled messaging often stems from a muddled product, and muddled products come from a lack of focus. Maybe it’s time for Cook to spend less time talking about how “the management team of Apple would never let that happen” and make absolutely sure that a loss of focus is not, in fact, happening.

Tomorrow’s Daily Update for Stratechery members will include a point-by-point analysis of the rest of yesterday’s keynote