Last week Jobs, who has reclaimed the reins at Apple and restored the company to glory–most recently by taking the leadership in selling online music with its 99-cents-a-song iTunes Music Store–announced a new alliance. With Pepsi-Cola. Next February and March, 100 million Pepsi, Diet Pepsi and Sierra Mist bottles with yellow caps will have a code printed on them that grants sugar-water guzzlers a free song from Apple’s slick Internet emporium–and teaches them the joys of legal digital music.
The Pepsi deal was only the fizz in Jobs’s continuing campaign to let the carrot, and not the stick, save the music industry from death at the hands of Internet pirates. He also announced an exclusive arrangement with America Online whereby its 25 million users would be steered to the iTunes store for music purchases and billed directly on their AOL accounts for the downloads. But the big deal was the extension of Apple’s iTunes software–and the online store that works in tandem with the program–from the smallish Macintosh community to the zillions of people who use Windows. Acknowledging the weirdness of Apple’s entry into hard-core Windows development, Jobs introduced the software with a huge slide proclaiming hell froze over. But the program itself was remarkable in its fidelity to the original, easy-to-use Mac version. And the iTunes store will be the same for Windows users as for Mac fanatics.
“This is the best Windows application ever written,” crowed Jobs. The claim wasn’t well received in Redmond, Wash. “Steve has been good in the minor leagues, but Windows is the major leagues, and it’s a different game,” says Dave Fester, general manager of Microsoft Windows Media Division. “Windows is about choice,” he adds, referring to the fact that downloads from iTunes can be moved directly to iPods but not other portable digital music players.
While Apple has a big lead in online sales–13 million downloads so far–others are eager to get into the action. Some competitors believe consumers will gravitate to subscription services that offer un-limited music for those who keep paying a monthly fee. An online store is “yesterday masquerading as tomorrow,” says Sean Ryan, who heads the Rhapsody subscription service. Next week another contender using the notorious Napster name begins with subscriptions, a store and a portable music player made by Samsung. (“We’re going to be one of the big players,” says president Mike Bebel. Since songs are essentially a commodity–“My Girl” is “My Girl” whether you get it from Apple, Musicmatch or the geek down the hall–the iTunes store will have trouble maintaining its lead. But Jobs contends that in the long run the competition will boil down to Apple and Microsoft. “Between the license fees and the credit-card charges, there’s no money in online music,” he says. For Apple, the payoff comes in selling the iPod players that work hand in hand with the store: more than a million have been sold, and in the last quarter, Apple moved 336,000 units. (Microsoft’s agenda is promoting its format for encoding music, Windows Media Player, which the Softies want to establish as the entertainment industry standard.)
At the moment, though, the music man of the hour is Jobs, who takes a personal satisfaction in having a role in a field for which he holds an obvious passion. At last Thursday’s San Francisco rollout, he delivered his usual virtuoso pitch for Apple’s new goodies, which included tweaks to the iPods (voice recording, photo storage) and the online store (gift certificates, audio books, celebrity playlists). On an Inter-net hookup via Apple’s video iChat software, rock star Bono described the event as “the pope of software meets the Dalai Lama of integration.” (Jobs’s other chat buddies were Mick Jagger and Dr. Dre.) He watched in rapture as self-proclaimed Mac enthusiast Sarah McLachlan performed a two-song mini concert. Even picking the music that greeted the spectators was a kick for him. It was a version of the Beatles’ “In My Life,” starkly rendered by the late Johnny Cash. “It was one of the last recordings he made,” says Jobs. “In this age of a lot of fast music, it’s good to have something like that.”
If Jobs meets the new goal he set for the iTunes store–100 million paid downloads by April–he will indeed have made his mark in the struggle to make legal online purchases competitive with the free alternatives. And could that beverage he’s sipping actually be… a Pepsi? “I’m drinking grape juice,” says the most unlikely new developer in the Windows world. Sweet.
title: “Pumping Up The Volume” ShowToc: true date: “2022-12-16” author: “Kevin Murphy”
Why the rush? Well, the Democratic presidential race begins next Monday in Iowa, as perhaps 100,000 voters turn out for caucuses in 1,920 precincts from Sioux City to Waterloo to Davenport. Harkin is well liked, has a well-maintained political machine and might be able to swing undecided voters–by some estimates a third of the Iowa electorate–in Dean’s direction. But there was a more immediate reason for the sense of urgency in Burlington: Dean needed to change the subject.
At least last week, the “surge” in the Dean campaign had vanished. Growth of his supporters’ list on the Web slowed to a trickle. Polls showed his lead fading a bit in Iowa and substantially in New Hampshire, where Wesley Clark was gaining momentum. In the print press, new questions were emerging about Dean’s personal finances, including speaking fees and donations to a charity he had established. On national TV, NBC unearthed four-year-old excerpts from a Canadian talk show in which Dean ridiculed the caucuses as a platform for “extremists” and suggested that some “good” might flow from a triumph of the murderous group Hamas in the Palestinian territories. “The Dean people didn’t want to wait,” a Harkin friend said. “Who can blame them? They needed good news.”
In cyberspace, the Dean campaign has long since become known as an innovative digital force. But now his crusade must prove that it can move from the blogs to the streets, where the politics is still practiced the old-fashioned way–by elected officials making endorsements, by vans hauling voters to polls, by precinct “captains” patrolling turf at the neighborhood polling places. “There’s only so much that you can do with technology and with the Internet,” says Mike Ford, a legendary, 54-year-old organizer who worked Iowa for Ted Kennedy in 1980 and who answered a call last month to go back there for Dean. “We’re all so proud that we have 600,000 names on our Web site. But–hello! It takes 54 million votes to win the presidency. You can’t do that on the Net.”
In fact, for all the media buzz about Digital Dean, he and his top aides have been working the traditional venues and byways of politics with skill and determination for months, even years. Only one Democratic contender called Harkin from the road on a regular basis–Dean. Only one sent a birthday card to Monica Fischer, the press secretary of Iowa’s governor, Tom Vilsack, and the wife of the state Democratic chair–Dean. Only one has imported a squadron of grizzled veterans to explain the mysteries of the caucus system to the kids at headquarters–Dean. They’re called the “Dean Dinosaurs” in Des Moines, and their unofficial chairman is Joe Trippi, the campaign manager, who, like Ford, learned the territory by organizing for Kennedy in ‘80. “We all know the Iowa protocol,” says Ford, a hulking presence who wore an earring back in the day–back before he became a political adviser to Citibank. The chief task: to select and train precinct captains for each caucus. Their job: to control the horse trading for votes. “I know how to move a room,” says Ford. “And I’ve been through this so many times I can be a calming presence.”
But more than placidity will be required to win in Iowa, where Massachusetts Sen. John Kerry–who has thrown all his resources into the state–seemed to have emerged last week as the strongest challenger to Dean. Harkin’s endorsement was a body blow to Rep. Dick Gephardt, who has labor support but not much else. Last week the Missouri congressman, who won the caucuses in 1988, was fighting a rear-guard action in the more rural parts of Iowa against Sen. John Edwards of North Carolina, whose determinedly sunny style set him apart from the cutthroat demeanor of the others–and gave him a boost in the polls. “We think we’re ahead in Iowa, but it’s impossible to know what the rest of the field is going to look like,” says Trippi.
Most campaigns have to worry about too few volunteers; Dean’s frets about having too many. More than 3,500 Deaniacs are expected to inundate the state, giving the rival camps an excuse to raise accusations that the visitors want to “infiltrate” the caucuses and vote in them. To keep out-of-state volunteers busy and out of trouble, the campaign is sending them to canvass neighborhoods in waves called “storms,” and has given them their own “headquarters” next door to–but clearly separate from–the official one. They must sign affidavits pledging not to take part in a caucus, and will be ordered to wear signs identifying themselves as Dean drop-bys should they decide to “observe” a caucus on Election Day. “In an ‘open source’ Linux-based campaign like this one, these people are not a controllable item,” says Ford. “We’ll do what we can.”
The Dean campaign may be open source, but his financial history is not. Dean recently acknowledged he sold $10,500 in shares in five Vermont banks shortly after becoming governor in 1991–and shortly after he got a status report on the state’s banks from the banking commissioner. He told reporters he would look for records of the sale, in part to prove that he hadn’t benefited from inside information. But, spokesman Jay Carson conceded, Dean was unable to find any records when he took a day off at home last week. Carson said that Dean had not had an accountant at the time, and his stockbroker from those days could not be located.
Dean also faced new questions about a tax-exempt charity he once headed, the Vermont Computer Project. Set up in the mid-’90s to provide equipment for local schools, it received at least $62,500 in pledges and contributions from insurance companies regulated by the state. Vermont records reviewed by NEWSWEEK show the donations may have been spurred by the then governor Dean’s somewhat relaxed attitude toward regulating the donors. “We greatly appreciate the flexibility that your administration and its predecessors have promoted in the regulation of the insurance companies,” wrote an executive of Medmark Insurance Co. in 1995. In the letter, the firm says it was making “a second contribution in the amount of $25,000 to” the charity. Dean aides said they were unable to provide a full accounting of which firms had donated to the charity–and how much–because they couldn’t locate the records.
The Clark campaign is also “not a controllable item,” especially in New Hampshire. Clark is focusing on the state and has emerged as the clear alternative, cutting Dean’s lead in one tracking poll nearly in half–from 27 points down to 14. On the trail, Clark seemed stilted at times, lapsing into military lingo that drew blank stares. He had trouble with some tough questions, such as why he had advised a candidate in New Hampshire in 2002 to support the congressional resolution authorizing war in Iraq. (At the time, Clark explained, he wasn’t running for office and did not have a staff to advise him, so therefore didn’t know the precise wording of the resolution.) Still, the retired general found his voice by stressing his military background, love of country and his personal cultural roots in the South. It was an appeal that Yankee Democrats seemed to understand in translation: I’m a Southerner, like the last three Democratic presidents, and, as such, I am more electable than the “Ben & Jerry” guy from Vermont. “I’m talking a little more about patriotism and values, which seems to have had an effect,” he told NEWSWEEK. By inference, Clark portrayed himself as the adult, and Dean as a hothead more concerned with landing punches than winning. “I don’t want to bash George Bush,” he told large crowds, “I want to replace him.” The appeal worked on Dick Gordon, a Vietnam vet reared in Vermont now living in New Hampshire. “Dean is a New Englander,” he said, “but Clark is the kind of guy who can win.”
But to win later you have to start winning now, and Clark isn’t even bothering to compete in the first event, in Iowa. As for Dean, he was campaigning there through the weekend, with Harkin at his side. Between stops, an aide said, Dean would, as usual, be working the phones. There were more endorsements to reel in, and you can’t do that over the Internet.
