| Thursday, February 5, 2009 |
05:55 - Credit where it's believed to be due
http://www.nytimes.com/2009/02/02/business/media/02apple.html?_r=1&emc=eta1
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Illuminating article via JMH on the tense relationship between Apple and the music labels. From the sound of it, Jobs holds all the cards, and he knows it:
In interviews, several high-level music executives, who spoke on the condition that they not be named to avoid angering Apple, said they operated in fear of Apple’s removing a label’s products from the iTunes store over a disagreement, even though that has never happened. The labels do not have much leverage in negotiating with Apple.
“I think Steve has been smart, and he knows he has the upper hand,” said Dave Goldberg, the former general manager of Yahoo Music who is now an entrepreneur in residence at Benchmark Capital, a Silicon Valley venture capital firm. “They can’t afford to pull their music.”
One result of the dicey relationship is the increasing search by the music industry for a future in which Apple is not so dominant. Many executives say they believe the future of music buying is over the mobile phone, not from buying individual songs but by paying a monthly subscription fee to hear vast database of music.
And that's why, evidently: the labels are still stuck on the belief that the future of digital music is the subscription model. What will it take to convince them otherwise? If not the failure of Napster and Rhapsody and all their ilk, and if not the fact (noted in the article) that iTunes now occupies the industry-bellwether position that the Billboard charts once did, then what possibly could? And even if they were to hedge their bets in favor of music downloading over mobile devices, doesn't Apple's ascendant dominance in that market give them pause?
I love the conclusion:
“They believe they created MTV, and will say they revived Apple,” said Mr. Goldberg, speaking about the music industry in general.
Mr. Card of Forrester, however, has a different take. “If it weren’t for Apple, God knows how bad the music industry would be,” he said.
Sounds to me like they're pretty well screwed even with Apple to cling to.
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Brian Tiemann
