‘Apple Has Destroyed the Music Business’–Not That We Didn’t Try Our Best
by John Paczkowski
Posted on October 29, 2007 at 9:44 AM PT
Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song. With iTunes, it quickly established a market for paid downloads as the music industry wrung its hands in utter incomprehension at this new age of digital distribution that was dawning.
So it is ironic, enormously ironic, to hear NBC Universal Chief Executive Jeff Zucker accuse Apple of ruining the music business (like that second Lindsay Lohan album didn’t do any damage at all). Speaking at a breakfast organized by Syracuse University’s Newhouse School, Zucker said Apple “destroyed the music business in terms of pricing” and will invariably do the same to the online video business.
Noting that NBCU booked just $15 million in revenue during the last year of its iTunes deal, Zucker described the company’s deal with Apple’s digital media store as one that was corrosive to its media business. “We don’t want to replace the dollars we were making in the analog world with pennies on the digital side,” he said. What Zucker does want is a piece of Apple’s iPod business. “Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.”
Can’t imagine that’s going to change anytime soon, either–no matter how loudly Zucker whines. Apple CEO Steve Jobs would probably rather swallow a Zune whole than be pressured into handing over a percentage of iPod sales to record labels, as Microsoft has done with Zune.
Comments
Is it just me, or doesn’t there seem to be some fudging here. NBC (according to the Washington Post) claims NBC programming makes up some 40 pc of iTunes sales (Apple says more like 30). iTunes, according to Apple’s website has sold some 100 million tv shows. 40 pc of that is 40 mil. That would generate revenues of some 80 mil (at 1.99 per show). So is NBC only making something like less than 19 pc per tv show ($0.40)? Remember Zucker says ‘net’. They must be offsetting revs against cost from elsewhere (Lost sales through pirating?).
Posted by Nerd Brain at October 29th, 2007 at 1:49 pmAre Sony, Panasonic, Mitsubishi & LG sharing hardware revenues with NBC Universal?
Posted by Jeff McCallister at October 30th, 2007 at 4:53 amReplacing analog dollars with digital pennies?
At $1.99 an episode, we were paying $40-$50 a season for ONE SHOW.
I pay about $80 a month for satellite, but obviously that goes to a variety of people – the satellite company, plus the rest is spread across MANY MANY channels.
The $40-$50 per show on iTunes is spread out between two people only. Apple, and the network.
Are television advertisors really spending THAT much to reach me, or isn’t it likely that $1.99 can net more money for NBC than *0* if I listen via rabbit ears.
I think if 10 million people shift towards iTunes, it’s more like moving pennies to dozens of digital pennies.
Posted by Scott Lewis at October 30th, 2007 at 6:41 amConsidering that only a few percentage points of the music on iPods is from downloads – the vast majority of it being from CDs – you can bet that’s the subtext of Zuker’s threnody.
The man is surely smarter than that. He knows the intent of the music industry is to make us pay multiple times for music we buy.
They think copying the files from a CD to a computer to put on a music player is theft! They think recording a TV show to watch later is theft! They think fast-forwarding past commercials we don’t want to see is theft!
Did they every think about trying to create entertaining commercials?
Oh yeah, thats called product placement.
Posted by Eric Welch at October 30th, 2007 at 9:20 amZucker is hilarious. Next thing he’ll be banging on SONY’s door to get a share of the money they’re making off selling TV sets. With this mindset, he must be doing HULU just to see it fail, and make us all understand we should stick to the good old analog days.
Posted by Ronnie Dan at October 31st, 2007 at 6:07 amThe web is saturated with articles and blogs about the death of the music industry & what Madonna, Radiohead and the like in collusion with web 2.0 digital models and P2P sites are doing to the industry … “killing it”?
But this IS the new industry … a place where the majority of content is created and consumed for free, where the creativity embodied on your musical content IS the value attributed to it.
A place where the merit in music conquers all. Or at least in the years to come it will.
It is my absolute belief that “where music leads all else will follow” .. that is the breakdown of the commercial music industry to elements of trade, file sharing, swapping & purchase will one day encompass our whole online commercial structure.
Merit and creative truth will rule, meaningless content (read “pop”) will simply become ignored meaninglessness, and it will struggle for any traction.
The sharing and spread across digital platforms of all online services and products will occur, with value being judged by merit. This will occur whether we are talking about a music track, a new product or a simple day to day service.
Advertisers will no longer be able to saturate our TV screens with useless products and thinly veiled lies about necessity – purchase value & immediacy will be decided by the purchaser.
ok, …. deeper : the human mind is a spark of the almighty consciousness of the creator, imagination and creativity are the doors from which this consciousness emerges.
As human minds develop further and become more fully tuned to the nature of spirit, by stopping thought, abandoning knowledge & trusting intuition, creativity also becomes more fully tuned to this truth. That is, music / knowledge / content / product is freed from the shackles of blind commercialism, prejudice or banality will simply cut through and gain traction by the simple fact of its creative merit.
The deeper the self realization of a person and his/her creativity, the more he/she influences the whole universe by subtle creative vibrations.
Silence is the potent carrier of the present tense. Every sound or action comes from silence & dies back into the ocean of silence.
Death to the music industry, long live the industry of creativity.
Posted by gareth farry at November 4th, 2007 at 10:35 pmSo i am a signed music artist with an indie label out of cincinnati, ohio and i am kinda involved with the music industry as well. personally after this article, i think taht zucker dude is stupid. i mean fa real, i think whoever is or isnt in the music industry we all know that no matter who bangs at the doors of sony ent, interscope records, captial recordings or any of those, we all know that the music industry is all digital. Even the equipment used to create the music is goin digital, for rap/r&b, pop, rock, or any other genre besides clasical. And it is digital cuz right when u run a recording, a guitar sound into a amp, or have music in the background it is converted into digital sound. BUT! This is where Zucker aint thinkin, distribution of peoples music these days, is through the internet which pops off Cd sales. Lil Wayne and TI is a perfect example. Do you really think they give a crap if their label drops them from everything? hell na, they still have millions of dollars comin in just from internet sales. If its their music trust me internet or not there gonna be gettin a cut of the sales in some way. With my indie label, our distributuin is mostly through digital distibution and to be honest i have made thousands of dollars off of it too. so trust me the internet aint hurtin the industry at all its helpin these people in the music industry get their name out more and bring in more revenue. Yea, the main arguement is if people are buyin digital music then that decreases sales in cds, look, they’d be surprised in how many ppl still buy cds. Cuz bein that our economy is bad, do ya really think that everybody has an mp3 or an ipod? hell na i aint even got one i jus hi jack my step brothers lol Not all cars these days have mp3 jacks either except the newer cars but even then can everybody afford a newer car? no. It all balances out and ppl are too into their money these days and when they are they try bangin at somebodies door wantin more. Record labesl are a great example too, they invest in the artist but if they know they aint gonna get a cut off the artist they aint gonna get signed. So think about all that
Posted by Tim MacDonald at October 3rd, 2008 at 9:10 am