Here's why Apple can take on the streaming industry

I pulled all the discs I bought from the '80s through the mid-2000s out of their jewelboxes and filed them in big envelopes after I ripped most of them into iTunes years ago—and found a few discs that I don't remember buying. Classic Yo-Yo by Yo-Yo Ma. A Bob Dylan live album. A Johnny Cash live album. Where did they come from?

Then I remembered. Oh, yeah—Steve Jobs bought those for me.

This is a momentous month for Apple's future as a part of the music world. On June 30 we'll get our first glimpse at Apple Music, Apple's own music subscription service. But Apple's history with music goes back 14 years, and what a long, strange trip it's been.

New century, new music

Back in 2001, the music industry was reeling. Computers with CD drives, the growth of the Internet, and the rise of Napster had made music piracy more convenient than it had ever been before. In January, Apple introduced the first version of iTunes for Mac, making it even easier for regular people to rip their CDs and listen to music right on their computer hard drives.

The other shoe dropped in February—coincidentally the very peak of Napster's popularity—when Apple released new iMacs with CD-burning drives that, combined with iTunes, made it easy to "Rip. Mix. Burn.", as the ad campaign went.

That ad campaign infuriated the music industry, but their greatest ire would be saved for the device unveiled in October of 2001—the iPod. Eventually, once it became wildly popular, it would be a convenient target for angry record companies who sought to portray it as a vehicle for pirated music.

But you've got to hand it to Steve Jobs. Stung by the criticism of the "Rip. Mix. Burn." campaign, he wanted to make sure that attendees of the iPod launch would consider only legitimate, legal uses for the device. At the same time, he didn't want reporters—some of them not particularly tech savvy, many of them Windows users—to have to do a bunch of work to load music onto the prerelease iPods that were handed out to every journalist at the event.

The compromise was this: Demo iPods would be preloaded with the contents of a half-dozen CDs, and those CDs would be included in the bag that contained the iPod itself. Attendees could leave the event, plug in some earbuds, and immediately listen to music, while safe in the knowledge that the music on their iPods had been legally obtained. And that's why I still have a bunch of CDs I don't remember buying.

Forget ripping, Just buy

A couple of years later Apple's relationship with music really turned a corner. Apple released the third-generation iPod, which could sync via either FireWire or USB, and the first version of iTunes for Windows.

It's easy to pick the launch of the original iMac or iPod as the moment that Apple's fortunes changed forever, but I think a strong argument can be made for April 28, 2003. Without a version of iTunes for Windows and support for USB syncing (rather than just FireWire, which was rarely seen on a PC not made by Sony), the iPod would've never become a breakout product. For Apple to win the day, it needed to go to Windows, and the third-generation iPod did that.

But the other announcement that day was the iTunes Music Store. Up to this point, Apple was able to create music-related products without any negotiations with the music industry—it was all about clever hardware and software using the digital audio discs sold in every music store around the world.

To do the iTunes Music Store, though, Apple had to cut deals with record companies and convince them that Apple was a trustworthy partner for digital music sales. It seems obvious now, but at the time the conventional wisdom among many music-industry executives was that music downloads were going to cause the end of their industry, and that the only way to stop the bleeding would be to sue the Napsters of the world out of existence and stop the downloads.

Apple convinced these skittish music execs that downloads were inevitable, but that providing a legal alternative to piracy would turn the tide. It took a lot of convincing—and the fact that the store was initially only going to be available on the Mac made it even less scary—but the deal was done. Apple was now in business with content providers, and its trajectory was set.

You can draw a straight line from that day to the company Apple is today. (So long as you draw it through the iPhone, of course. But keep in mind that one-third of the iPhone's initial sales pitch was about playing back content, and that Apple's entire App Store infrastructure was adapted from the systems built to create the iTunes Music Store.)

Into the future!

Steve Jobs famously said that people wanted to buy, not rent, their music. But times change, and Jobs famously changed his mind all the time—once he was convinced that he was wrong.

While a la carte music sales aren't going to disappear entirely, it's clear that there's also a major segment of the music market that would much rather pay to have access to a giant streaming library. With the purchase of Beats and the launch of Apple Music on June 30, Apple's entering yet another phase in its relationship to music.

The iPod and iTunes weren't the first attempts to create portable music hardware and an online music store, respectively. But it's fair to say that Apple's competition in the streaming music field is far more advanced and popular than the competition in those previous music categories.

Still, I had a hard time not rolling my eyes at Rdio's statement, upon the announcement of Apple Music: "Welcome, Apple. Seriously." (That's a reference to Apple's "Welcome, IBM. Seriously." ad campaign when the IBM PC launched.) Apple may be entering the subscription-music market for the first time, but it's the company that popularized music downloads, portable music players, and smartphones that are also audio and video players. Now they're entering your fraction of the market, and I suppose that's validating in a way—but it also seems a little churlish.

Also, I've got to point it out: We remember Apple famously welcoming latecomer IBM to the party, but the IBM PC won the day, not Apple. Be careful who you welcome. Seriously.