Steven Levy

April 2007

By Anna Carugati

Steven Levy is a senior editor and the writer of “The Technologist” column at Newsweek. He’s spent his entire career chronicling the digital revolution, which he believes is the biggest story of our time. On the technology beat he has often rubbed elbows with Steve Jobs; Bill Gates; the “Google guys,” Larry Page and Sergey Brin; and countless others who have reshaped our world through computers, the Internet and all sorts of gizmos and gadgets. Levy has written six books, the most recent being The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness. He shares with World Screen some of his insights into what technology will serve up in the future.

WS: What have been Steve Jobs and Apple’s major contributions to the media world?

LEVY: Apple’s big contribution, and Jobs had a lot to do with it, was taking technology, which could have been complicated or awkward to use, and making it much easier to use—so much so that it almost was a different kind of product. Apple made the Macintosh much more accessible to people [than computers that came before] and you could do much more with it. Likewise, with devices like the MP3 player and the iPod—MP3 players were hard to use. It was difficult to navigate the music, difficult to load it up and sync it with your software on a computer. And Jobs transformed that with the iPod, and I think that’s what he wants to do with the iPhone.

And also from a design perspective, not just in the computer industry, but in all of Apple’s products, Jobs has used design to make products more attractive and give people a sense that they’ve joined the cool crowd when they use them.

WS: You’ve interviewed Jobs lots of times. What’s he like and how does he motivate his team to come up with such brilliant ideas?

LEVY: He works by setting the bar very high, sometimes even impossibly high, and by doing that people try to play above their game. It’s like a sports team knowing they are playing the best team in the league. Even though they are not up to the best team, they prepare for it and play over their heads. I don’t think there is anyone as good as Jobs is in having talented people �exceeding what they can do. Sometimes, even capriciously, he’ll reject things knowing that people will come back and try to top themselves. It’s rare in life to have a manager who will take your A- work and say, “That’s not good enough, I want an A+.” That is the standard he sets. And that is why Apple is consistently able to deliver products that give people a “Wow!” experience when other companies very seldom do that.

WS: What’s your impression of the iPhone?

LEVY: It remains to be seen what it’s like when you actually connect it to one of these cell-phone networks that we all suffer with—the dropped calls and things like that—but there are some ideas in the iPhone that are just magical. I’ve played with it a few times. As he did with the iPod, Jobs has solved some difficulties, like navigating the web in a device that size, and he has made improvements on what was already a pretty good interface with the iPod. There are a lot of great ideas in the iPhone that quite possibly will make communicating with the telephone that also handles information a different experience.

WS: He’s pretty proud of it, isn’t he?

LEVY: He’s very proud of it. I’ve been in a situation with him more than once where he’s showing me something before it is released to the public and on one hand as a journalist, you want to keep your objectivity, but he keeps saying, “Isn’t this fantastic, isn’t this amazing?” and often it is, but you don’t want to commit yourself to saying, “This is the greatest thing ever!” Sometimes his enthusiasm is such that it’s tough to resist or respond.

WS: It’s infectious?

LEVY: Yeah, people describe being around him as being in his reality distortion field and that he can get you thinking anything. In some cases it can be really productive when he gets you to believe you can do the impossible. But in other cases it doesn’t work out so well, like in the early days of the Macintosh when he chose to believe it was doing better than it was, and that actually got him into trouble at Apple.

WS: How revolutionary have the iPod and the iTunes Store been?

LEVY: The iPod really was a significant change in the way we listen to music. The store changed the way we buy music and will buy music in the future, and the way music is distributed. Obviously, the Internet proved itself a very effective way of distributing music before the iTunes Store, but not a way that you could collect money for distributing music. That was due in large part to the fact that the record labels resisted that business model. Understandably, adopting this would mean that there would be a gap between the bulk of their revenues, because a huge bulk of their revenues came from selling physical objects—CDs—before this transition to selling music digitally. They didn’t want to take that step and they also very strongly [associated] digital distribution with piracy.

Jobs [wanted these] labels to go along with [the iTunes Store] so that for the very first time we would be able to legally sell music. [He wanted to create] an experience that was pleasurable. In part he succeeded because he had the advantage of being a person who was very involved in their industry. He had a movie studio [Pixar]. He was a content owner as well as a guy in charge of a technology company. And he understood their concerns. Once he convinced them to sell music by the track, things changed. One of the reasons for the popularity of the iTunes Store is that people were pretty much fed up with spending $16, $17, $18 for a CD when they only wanted one or two songs on it. This liberated the CD and [allowed] people to pick and choose.

WS: What was Bill Gates’s reaction when you showed him the iPod?

LEVY: On the same day that Apple delivered me the iPod, which was the day it launched, Microsoft was announcing Windows XP. Microsoft was hosting a few events for the launch, including a dinner, and I brought my iPod along, knowing I would be seeing Bill Gates. I actually sat next to him during that dinner. At the end of the dinner I said, “Bill, have you seen this?” and I pulled out my little iPod, which already had some music on it, and his eyes turned into saucers. He ripped the thing from my hands and it was almost like a force tunnel was created between him and the iPod. Almost as if he were moving in fast motion, he spun the wheel and pressed the buttons, he looked at the menus, he basically learned everything you can learn and went every place you can go on the iPod within 45 seconds. It was just this communication between him and the iPod. It was almost as if he were some alien who had the ability to suck up information about the object he had found on earth. After this intense interaction with it, he finally handed it back to me and the force tunnel disappeared and he said, “Wow, this is a really cool product,” and added, “Is this only for the Macintosh?” And back then it was.

WS: Do you think the Hollywood studios and other distributors of content are being wiser in what they are making available on the Internet?

LEVY: I definitely think so. Hollywood has an advantage in that the way we consume movies and television shows is different from how we consume music. By and large you are going to watch movies or TV shows once, and not time and time again, and not when you are driving or walking down the street or on the subway, as you can with the iPod. The Hollywood studios have shown a willingness to say, “Let’s see how this works,” much more than the music industry has. I think Disney, using its most popular shows to help open the iTunes video store, is a good example of that.

WS: Was it Jobs who approached Bob Iger [the president and CEO of The Walt Disney Company] about that?

LEVY: Yes, it was, and there were a couple of things going on. In Jobs’s mind it was a definite diss of Michael Eisner, whom he couldn’t stand. And the idea that as soon as Eisner was out and Iger was in [Jobs would contact Iger] was a statement Jobs wasn’t unhappy to make. When the iTunes deal was made, I spoke to both Jobs and Iger and asked, “Does this mean it’s a done deal that Disney and Pixar are going to renew their distribution contract?” At the time they were talking about �merging, but they had a distribution contract that was up for renewal. When they said, “We won’t comment on that,” it became clear to me [that there would be a merger.]

WS: How much of an impact do you think the Internet is going to have on traditional linear television?

LEVY: Television shows are still going to be there, but eventually—I don’t want to put a time frame on it—the idea that you’re going to have to buy your television in a package that some big company like Comcast or Time Warner or DIRECTV chooses for you is going to die.

I never quite understood why that wasn’t subject to antitrust [regulations]—the idea that we let one cable company serve an area and they chose their content, not based on the appeal to their viewers, but on deals they made with the companies distributing channels, whether or not they were part of their same operation. It should die and it will die. And eventually, you’ll start your television experience by going to something that is more like Google or Yahoo! than you will with that incredibly huge grid that comes now. I have digital TV from Time Warner Cable, but it’s quite an effort for me to find something that is on at a given time that I want to watch. What’s going to happen, I believe, is [we will watch television the] same way we wind up navigating the web. We’re going to have our favorites page and we’re going to have alerts and there are going to be thousands and thousands of what could be called channels but they won’t be channels in the traditional sense in that they won’t air programming for 24 hours and fill the dead space with infomercials.

WS: Do you think MySpace and YouTube are passing trends?

LEVY: I don’t think they are anomalous blips or fads. And whether those particular brands survive or not isn’t as important as the idea that this kind of consumption of video, and this kind of support and [online community], is something we’ll see more and more of.

In a way they are both social-networking efforts, so a lot of people think of YouTube strictly as, “Oh this is the way people upload videos.” But the secret sauce of YouTube is really in how you can find videos and how it networks people to get videos noticed and let the cream—I don’t know if you want to call some of those videos cream—rise to the top. But clearly it’s stuff that people want to see. It’s a way by which the videos that the audience wants to see get seen through this social-�networking approach. I think that’s going to be applied more and more to traditional media. You might eventually see a company like NBC having thousands of streams of programming that are determined by what viewers think.

WS: When you first took notice of Google, would you have thought that it would now be the biggest media company in the world?

LEVY: I definitely saw Google early on as a major company. I visited them in 1998 or 1999 for the first time. I sought them out because I had to get to know these guys. I thought, this is an important company. So the first time I visited Sergey and Larry it was around Halloween and one was dressed like a Viking and the other like a cow. We went to a room and I talked with the Viking and the cow about their ideas of how search is a viable thing to build a company around. I wouldn’t have predicted it would have come to this, but certainly it was clear that they were going to be big players.

WS: Is it conceivable that they could buy a major media company down the road?

LEVY: I don’t think they want to. They could; it would not be a huge percentage of their market cap. But their nature is to be a very omnivorous company in terms of information—bring it all in. And I’m not sure they see what the advantage is of owning one specific news or [content] source that would compete with others. I think they would be more interested in trying to be a Craigslist or have something where users generate content rather than hire professionals to [produce it]. They are very eager to take content from other companies, search it and deliver it to people, whether it’s articles, books or video.

WS: What are the big challenges for media companies as technology keeps serving up new platforms and devices?

LEVY: The big challenge is to keep up with the opportunities of unlimited forms of distribution—where people can get what they want when they want it on whatever device. Instead of seeing this as a threat and thinking about the works they produce as things that lose value as more people see them, the opportunities are so broad and so are the ways to make money—a lot of the ones that will be the most successful haven’t even been thought of yet. Seeing that world as an opportunity and seizing it is the big challenge to media companies in this century.

The nature of this technology is that it’s not slowing down and we are not going to see a point where all this stuff plateaus and say, “This is what we’ve got.” It’s not like the automobile, which is not really that much different than our grandfather’s automobile. We don’t go down the highway at 7,000 miles per hour on six cents for a gallon of gas. But that’s the way things work in technology. It’s not going to stop for the foreseeable future, so it’s more opportunity.