Apple and Universal Statement

[MacRumors]

In an uncharacteristic move, Apple released a statement today regarding the rumors of the aquisition of Universal Music. In a statement from Steve Jobs:

Apple (Nasdaq: AAPL - News) has never made any offer to invest in or acquire a major music company. The press statements this morning attributed to Vivendi board member Claude Bebear are untrue, as Mr. Bebear has confirmed in a later report. Beyond these comments, we will abide by Apple's policy of not commenting on rumors.

[sparkleytone]

wow...someone is upset. steve jobs must be having a fit over there in cupertino.

[davy the bunny]

uncharacteristic indeed

[nuckinfutz]

Get to makin' the Deal then. I want my Music!!

[G4scott]

NO MUSIC FOR YOU!!!

This may be a move to keep it confidential. Whether or not Apple does this, it'll be cool. They'll still have their music service (which we will see in the upcoming weeks.)

[Le Big Mac]

Originally posted by G4scott
NO MUSIC FOR YOU!!!

This may be a move to keep it confidential. Whether or not Apple does this, it'll be cool. They'll still have their music service (which we will see in the upcoming weeks.)


That would be a lawsuit waiting to happen. Sure, apple could deny having made an "offer" if all it's done is discuss the possibility, but securities lawyers will be all over them if a deal comes to pass for making false and misleading disclosures. Normally when a company is in negotiations, all they can say is neither confirm nor deny, because otherwise they subject themselves to claims that they made material misrepresentations. Since these negotiations are affecting the stock price significantly (up .50c since this release), Apple is probably pretty concerned.

[G4scott]

This certainly contradicts this story: http://www.theregister.com/content/39/30289.html

Maybe they're talking about Apple Records...

It's a scandal I tell you. Corporate BS. I just want my music...

[Snowy_River]

I think that this probably has to do with the effect that these rumors (which seemed to be a bit more widely publicized than most usually are) were having on both Apple and Vivendi stock. I imagine both companies wanted to squash these rumors ASAP.

[noel4r]

Steve should have made that statement when the rumor was first reported, he could have prevented the Apple stock from dropping.

[j33pd0g]

Good. Apple should pool all energy into newer, faster, peecee envy, hardware/software anyway.

[Kid Red]

He had no choice, Apple stock has fallen since the rumor broke. If he doesn't comment, it would appear to be true and the stock would continue to suffer.

[slavey]

Well, it seems that maybe it's a good time to pick up a few shares of Apple.

[szark]

Notice that this carefully-worded statement does not preclude the possibility of them making an offer in the future. It simply states that they have not (yet) made any offer to invest in or purchase a music company.

Having said that, I think it would be better if Apple concentrated on other things.

[moosecat]

Originally posted by Le Big Mac
That would be a lawsuit waiting to happen. Sure, apple could deny having made an "offer" if all it's done is discuss the possibility, but securities lawyers will be all over them if a deal comes to pass for making false and misleading disclosures. Normally when a company is in negotiations, all they can say is neither confirm nor deny, because otherwise they subject themselves to claims that they made material misrepresentations. Since these negotiations are affecting the stock price significantly (up .50c since this release), Apple is probably pretty concerned.

But normally when companies are in negotiations, the CEO of one company is not running around making statements about a supposed offer made by the other company.

I am a securities lawyer (though I defend, rather than prosecute, the suits -- so I might be biased), and you sound like you know what you're talking about too, so maybe we just disagree. The usual reason companies can get away with a "no comment" is that they don't have to talk about negotiations absent a duty to disclose. However, I wonder whether this rogue CEO's odd comments may have generated a duty on Apple's part to correct them (just as the CEO had done earlier).

And it's simply not the case that companies never discuss negotiations. They often don't, but there may be good business reasons for doing so, as long as they are careful about minimizing the risks of liability should things not pan out. And there are sometimes legal reasons for doing so (e.g., if necessary to make other statements made by the company -- perhaps in earnings forecasts to be broadcast later today -- not misleading).

The statement was obviously crafted with the assistance of counsel (given that it sounds so weird), and it specifically does not disclaim any ongoing negotiations. Asserting that there's been no offer is highly unlikely to be found later to have been misleading, since it's doubtlessly true.

[copperpipe]

I agree, (and took adavantage already), this last bit of rumor sent the stock to an all time low from investors who are usually quite skittish and do react to rumors. This year is going to be a banner year for Apple, in my opinion. We are going to see the end of the G4 vs x86, and we are going to see OS X get EVEN BETTER! All the while Windows flounders. In the meantime, check out this thread from the readers of slashdot about OSX, and tell me, is it hitting home in the Linux community?

http://apple.slashdot.org/apple/03/04/16/144226.shtml?tid=179

Anyway, I know this was off-topic, I'm sorry about that, but hey I'm psyched about this summer and fall for my favorite company!

[deepkid]

Originally posted by noel4r
Steve should have made that statement when the rumor was first reported, he could have prevented the Apple stock from dropping.

I disagree.

Apple would become a rumor-refuting entity instead of a computer hardware/software corporation if they had to quell every rumor made about them.

Considering the magnitude of *this* rumor, it was probably decided in the best interest of the company and its stockholders (me!) to carefully make a statement regarding the issue.

There's nothing in the statement that could be considered misleading other than if they really did tender an offer for Universal Music prior to releasing the statement.

[gopher]

Wording is everything:

Apple (Nasdaq: AAPL - News) has never made any offer to invest in or acquire a major music company. The press statements this morning attributed to Vivendi board member Claude Bebear are untrue, as Mr. Bebear has confirmed in a later report. Beyond these comments, we will abide by Apple's policy of not commenting on rumors

Perhaps Apple is considering only the Universal part of Vivendi.
Perhaps Apple does not consider Universal/Vivendi a major music company.
Perhaps Apple is considering investing in another company it hasn't commented about.

One can infer anything you like from this. What really intrigues me is how such a reputable source as the "Los Angeles Times" becomes the one to first make a story of this outside of the rumor sites to begin with? Now where will they be now that Apple has denied it?

[type_r503]

Has anybody heard the specifics of the service? I have read $.99 per song download. That seems a little steep compared to free. A $15 monthly fee seems more resonable.

type R

[BaghdadBob]

Originally posted by gopher
What really intrigues me is how such a reputable source as the "Los Angeles Times" becomes the one to first make a story of this outside of the rumor sites to begin with? Now where will they be now that Apple has denied it?

Did you just call the LA Times "reputable?" HA!

HA! HA! HA!

[Le Big Mac]

Originally posted by moosecat
But normally when companies are in negotiations, the CEO of one company is not running around making statements about a supposed offer made by the other company. . . .

The statement was obviously crafted with the assistance of counsel (given that it sounds so weird), and it specifically does not disclaim any ongoing negotiations. Asserting that there's been no offer is highly unlikely to be found later to have been misleading, since it's doubtlessly true.

I'm a lawyer too, but not a sec. lawyer, so you've got the upper hand there. I agree the statement was carefully crafted, and it does seem conspicuously not to deny discussions, which may well make Apple safe.

I'm guessing the Vivendi guy made a lapse in judgment and said something basically blowing off Apple's current position to the wrong person. Then it got published.

What's really odd is that the denial has nothing to do with what Vivendi said, which was that it "expected" apple to make a bid that wouldn't be high enough. It sounds like the guy was trying to get the music business into an auction by a) saying apple was going to offer close to $6b, but b) that wouldn't be enough. In other words, Microsoft and others, you can top apple. Jobs, meanwhile, stifles the auction that vivendi is trying to create by denying there's an offer on the table, and privately calls up vivendi to bitch and say he'll stop dealings if they don't deny the quote, at which point they deny their claim.

Apple's denial really doesn't deny any claims. Vivendi expects an offer of 6b; apple says it has yet to make an offer. Translation: Apple and Vivendi have discussed a purchase and Apple has indicated that it might be willing to pay $5.9b for the business.

[Le Big Mac]

Originally posted by type_r503
Has anybody heard the specifics of the service? I have read $.99 per song download. That seems a little steep compared to free. A $15 monthly fee seems more resonable.

type R

$1 a song is expensive? Hardly, considering the price of a new CD that has only 10-12 songs. (Well, you can call someone for 20 minutes . . .). And you don't have to buy the rest of the stuff.

They can't make it unlimited use, because the music cos. would never get any money back, unless you just "rent" the songs -- that is listen to any song in our catalog for $15 per month.

[makkystyle]

It is very common for companies in negotiations, or "talks" rather, to make statements like this if rumors get out of hand. The real question is, as someone stated earlier in another thread, "what was the motivation for the leak"???

As for the music service, I think they should stay FAR away from monthly fees. This requires thought, planning and most importantly COMMITMENT by the consumer. What they need is a payment system that is spontaneous so people can make impulse buys with ease. The "one-click" Apple licenses from Amazon is perfect for this. I think it will be a raging success.

[Nebrie]

Originally posted by noel4r
Steve should have made that statement when the rumor was first reported, he could have prevented the Apple stock from dropping.

They couldn't, they were in a mandated "quiet period" before earnings are released. They couldn't say anything at all.

[type_r503]

Originally posted by Le Big Mac
$1 a song is expensive? Hardly, considering the price of a new CD that has only 10-12 songs. (Well, you can call someone for 20 minutes . . .). And you don't have to buy the rest of the stuff.

They can't make it unlimited use, because the music cos. would never get any money back, unless you just "rent" the songs -- that is listen to any song in our catalog for $15 per month.

They are not competing with CD's they are competing with Kazaa, Gnutella, OpenNap. Which all are free. What is going to make someone pay $1 for a song they can get for free. The market value for a song is $0. What people are saying is, "because apple is doing this, it will work." Well there are currently several sites that allow you to download music on a per song fee basis, can you name them?

[Eniregnat]

Another link to a diffrent thread about nearly the same thing. (http://forums.macrumors.com/editpost.php?s=&action=editpost&postid=317059)

Search here for the original wire. (http://www.prnewswire.com/news/)

Apple is sure keeping a lid on this if it is a real press release. If it is a legitimate press release it isn't on apples press (http://www.apple.com/pr/) page or in their hot news (http://www.apple.com/hotnews/) page. They may be letting the rumor process work for them. By using only one wire service and by not listing the press release on their website they may be trying to halt the damage that rumors have already done, by using the same process, but by controling the news source. I still find it odd. By not posting it on their website, it makes it hard to verify that it actually came from Apple. Wire news can be faked if one understands how the different wire services work and how to properly code a release.

I question this release.

[Le Big Mac]

Originally posted by type_r503
. What is going to make someone pay $1 for a song they can get for free. The market value for a song is $0. What people are saying is, "because apple is doing this, it will work." Well there are currently several sites that allow you to download music on a per song fee basis, can you name them?

1) If the market price of music is zero, then apple couldn't charge a monthly fee either. Some honest people actually believe it's not unreasonable to pay something for music.

2) The sites, from what I understand, don't have Apple's usual ease of use and don't have access to all cos' music libraries. If apple provides both, they have a better chance of success.

[cubist]

Hey, maybe it's Apple Records that's buying Universal:D

[mnkeybsness]

i read in the minnesota daily (http://www.mndaily.com) today in a section from the wall street journal (or new york times-can't remember) that apple IS implementing a downloading service at $0.99 per download as a way to detract users from downloading illegal copies. they cited no sources for this information.

[Perceptes]

This was quite a suprising statement from Apple... But to be honesty, I just don't care. All I want is a new iPod! :P

[kylos]

Originally posted by Eniregnat
Another link to a diffrent thread about nearly the same thing. (http://forums.macrumors.com/editpost.php?s=&action=editpost&postid=317059)

Search here for the original wire. (http://www.prnewswire.com/news/)

Apple is sure keeping a lid on this if it is a real press release. If it is a legitimate press release it isn't on apples press (http://www.apple.com/pr/) page or in their hot news (http://www.apple.com/hotnews/) page. They may be letting the rumor process work for them. By using only one wire service and by not listing the press release on their website they may be trying to halt the damage that rumors have already done, by using the same process, but by controling the news source. I still find it odd. By not posting it on their website, it makes it hard to verify that it actually came from Apple. Wire news can be faked if one understands how the different wire services work and how to properly code a release.

I question this release.

Fred Andersen read the press release in the conference call.

[Phil Of Mac]

Originally posted by type_r503
They are not competing with CD's they are competing with Kazaa, Gnutella, OpenNap. Which all are free. What is going to make someone pay $1 for a song they can get for free. The market value for a song is $0. What people are saying is, "because apple is doing this, it will work." Well there are currently several sites that allow you to download music on a per song fee basis, can you name them?

eMusic.com is one of them.

The market value for music is not 0. If it was, there would be no music. Someone has to buy the music before they pirate it. Apple can't compete with looting, and they're not intending to. I simply hope people realize that music piracy is immensely stupid. It's because of those freeloading looters that DRM is being pushed.

[weev]

Originally posted by slavey
Well, it seems that maybe it's a good time to pick up a few shares of Apple.

Indeed!

I am surprised that the shares drop at all. But then again the market is a terribly fickly creature.

When a company makes expansion moves the shares usually drop. Perhaps this a hang-over from the AOL - Time Warner traversty.

But this is different. Online music - unlike the Internet pre-bubble burst - has NO hype at all - quite the opposite. If Apple can add any polish to this burgeoning market sector than this will reap great rewards.

I hope that the Apple vision expands, and that Jobs is the visionary. Just look at Virgin. There's a company that just bigger and bigger through diversifying.

[Centris 650]

I read somewhere that Apple had it's sites on hopefully charging 10 cents per song. (Don't ask where) I think if you could have a price that low it would eliminate a lot of piracy.

[maxterpiece]

There has never been an effort to make online music sales as publicly visibly as Apple is (apparently) trying to make them. Don't try to compare what Apple is doing to eMusic, or anyone else, because eMusic was never visible to 95% of the public. The 5% who do know about are primarily computer saavy enough to have no problem dealing with cooky programs like kazaa and figuring out how to get those downloaded mp3s onto a cd. It's not as easy for everyone as it might seem to the crowd who visits this site.

[type_r503]

Originally posted by Phil Of Mac
eMusic.com is one of them.

The market value for music is not 0. If it was, there would be no music. Someone has to buy the music before they pirate it. Apple can't compete with looting, and they're not intending to. I simply hope people realize that music piracy is immensely stupid. It's because of those freeloading looters that DRM is being pushed.

Why do you think that Vivendi is going bankrupt and wants to sell Universal Music? No one is buying music. Thus the market price is at or near nothing. I do not advocate stealing but is it in the best interest of apple to compete against the proliferation of theft. I don't think so.

The music industry needs a complete shift in revenue generation, people will no longer accept overpaying for music. This includes $.99 per song.

[frinky23]

Originally posted by Phil Of Mac
eMusic.com is one of them.

The market value for music is not 0. If it was, there would be no music. Someone has to buy the music before they pirate it. Apple can't compete with looting, and they're not intending to. I simply hope people realize that music piracy is immensely stupid. It's because of those freeloading looters that DRM is being pushed.

Actually, that isn't true. Most major releases are available on the internet weeks or even months before the CD goes on sale. Whether it's someone at the record company, someone in the band, or a music writer/DJ that got a promotional copy, I don't know. I don't think anyone cares who the source is, so we may never know.

That said, if Apple does start a music service, I hope they include a lot of the smaller labels as well as providing a way for unsigned artists to be distributed. I rarely download anything these days and my music purchases are just as rare. It's just too hard to find new and interesting music since Napster shut down. If Apple can change that and make it relatively cheap to find new stuff (I may have to suffer through 20 bands that suck to find one unknown that rocks), they will have a very happy paying customer.

[Phil Of Mac]

Originally posted by type_r503
Why do you think that Vivendi is going bankrupt and wants to sell Universal Music? No one is buying music. Thus the market price is at or near nothing. I do not advocate stealing but is it in the best interest of apple to compete against the proliferation of theft. I don't think so.

The music industry needs a complete shift in revenue generation, people will no longer accept overpaying for music. This includes $.99 per song.

Universal Music alone pulled down $500 million in profits last year.

Besides, if no one bought music, it would be pretty damn hard to pirate it, wouldn't it? Where would they get it from? People seem to forget that music doesn't come out of a vaccuum. Music labels spend millions on bands who never earn them any money on the rare chance that they'll find one who will be profitable. When one is profitible, it takes millions in advertising to support them, not to mention the costs of producing videos and the production of the actual music. Does *anyone* deserve to have the music stolen from them at that point? Is music *really* overpriced? It's sold at these prices for decades. If it was truly not worth the price, people wouldn't have bought it all these years. It's only been when stealing became easier that people complain.

Well, face it, parasites. You may not be able to afford a 1990 Ford Thunderbird, but that doesn't give you the right to steal mine. Same with music. And you wonder where DRM comes from? You wonder why they shut down Napster? You wonder why copy-protection is turning into a religion for major software providers? Look at your own thieving, looting, parasitic selves. The recent looting in Baghdad is merely the real-life manifestation of Napster. No, you may not be storming into hospitals with Kalashnikovs to steal gurneys, but you are little better than the thugs who are.

[type_r503]

Originally posted by Phil Of Mac
Universal Music alone pulled down $500 million in profits last year.

Besides, if no one bought music, it would be pretty damn hard to pirate it, wouldn't it? Where would they get it from? People seem to forget that music doesn't come out of a vaccuum. Music labels spend millions on bands who never earn them any money on the rare chance that they'll find one who will be profitable. When one is profitible, it takes millions in advertising to support them, not to mention the costs of producing videos and the production of the actual music. Does *anyone* deserve to have the music stolen from them at that point? Is music *really* overpriced? It's sold at these prices for decades. If it was truly not worth the price, people wouldn't have bought it all these years. It's only been when stealing became easier that people complain.

Well, face it, parasites. You may not be able to afford a 1990 Ford Thunderbird, but that doesn't give you the right to steal mine. Same with music. And you wonder where DRM comes from? You wonder why they shut down Napster? You wonder why copy-protection is turning into a religion for major software providers? Look at your own thieving, looting, parasitic selves. The recent looting in Baghdad is merely the real-life manifestation of Napster. No, you may not be storming into hospitals with Kalashnikovs to steal gurneys, but you are little better than the thugs who are.

Actually it was E961 Million a 21% decrease over the previous year. And UMG was the only profitable music outfit in 2002.

The idea that the music industry invests millions in no name bands hoping they make it big is simply false. A more accurate description would be that they create bands like Britney Spears, NSYNC and eminem, and force them upon us with overplayed music videos, and looped radio playlists, yes the record companies pay for play. The investment on their part is not very risky at all.

I am not advocating theft, am simply saying that the days of charging $.99 per song are over. What if you had to pay $7 per TV show you watched? This happened before the invention of TV. If you wanted to watch a show you would have to go to the movies and pay per show. TV was feared by the movie industry, when it came out it was free. The Warner Bros, who are now the largest TV studio, claimed that television will never make it. As the Television industry grew they developed ways to make money, through comercials and pay services.

The music industry is at a similar crossroad. They can figure out how to use the internet as a media or the can go out of business, like so many early movie studios.

type R

[maxterpiece]

Originally posted by type_r503
Actually it was E961 Million a 21% decrease over the previous year. And UMG was the only profitable music outfit in 2002.

The idea that the music industry invests millions in no name bands hoping they make it big is simply false. A more accurate description would be that they create bands like Britney Spears, NSYNC and eminem, and force them upon us with overplayed music videos, and looped radio playlists, yes the record companies pay for play. The investment on their part is not very risky at all.

I am not advocating theft, am simply saying that the days of charging $.99 per song are over. What if you had to pay $7 per TV show you watched? This happened before the invention of TV. If you wanted to watch a show you would have to go to the movies and pay per show. TV was feared by the movie industry, when it came out it was free. The Warner Bros, who are now the largest TV studio, claimed that television will never make it. As the Television industry grew they developed ways to make money, through comercials and pay services.

The music industry is at a similar crossroad. They can figure out how to use the internet as a media or the can go out of business, like so many early movie studios.

type R
I'm not agreeing necessarily or disagreeing with this quote... more like adding and clarifying where I disagree.
- TV is weighed down with commercials. Do you want little
commercials laced into every song you buy?
- Almost all people pay for their TV through cable or sattelite dish. If you opt for just the free part of TV, you get about 4 or 5 channels, reception is often sketchy, and every 10 minutes you get a 3 minute commercial break. That type of entertainment is not the same as going to movie theater with a huge screen, no ads (except previews in the beginning), an incomparable sound system.
- The movies that do get onto TV (even normal cable), are have spent time in the theatre, then on DVD before they ever make it onto TV. Plus they are edited. If you want a movie sooner (although still long after a theatre release) you have to pay even more money for a premium channel like HBO.
- It is true that by selling online, the cost and investment of "releasing" an album will go down to almost nothing. The record companies will suffer a miniscule loss from a flop of an album, if it is released online vs. if it is released on CD. Prices will drop. Right now, however, just as when any new technology is released (see CDs in the 80s), there is an investment, and early adopters are going to pay a bit more until the companies gain confidence in the new format.
- Record companies are by no means sure that internet trading is the cause of the decline in music sales. Perhaps pop music is just not as much of a fad as it was during the last 35 years. People are finding their culture elsewhere (IE the internet!). It is pretty obvious from the relatively limited selection that P2P share software like Kazaa provide that online music trading is not that huge of a thing. It reached its height with Napster 3.5 years ago, and has never come close to recovering.
- P2P sharing is an awkward thing. First, it is absolutely necessary to have high speed internet. Second, songs are often mislabeled, not complete, or just plain not available. Finding a whole album of an average band means searching for each song, then downloading a few copies of each song, then waiting... waiting ... waiting. Then figuring out if that song is the song you were looking for. Most people don't have the time or patience for it... even if they are skilled enough with a computer to figure out P2P share software.
- I am hopeful that, with this new format it would make it less profitable for the record companies to make pop bands like NSYNC. There would be much less pressure to create a product that is sure to sell because the $ risk of putting out an album is so much smaller. Something tells me that they will still create pop bands that they will shove down people's throats, but maybe they'll feel a little more comfortable dealing with experimental stuff and making it more available to the whole public.
- My major qualm with the above quote is that people would not be willing to pay $1 a song. I think the availability of a wider variety of music and the dynamic quality of having a song in a digital format (IE you can burn it, put on iPod, listen to it from the comp... all from just one copy that you paid $1 for), along with a wider variety of music will bring music back to people who perhaps became alienated by the shenanigans of the pop music world. In short, the $ of the music isn't the heart of the issue... its the lifestyle of the people.
I'm not sure what my "thesis" would be for this massive post, but a mish-mosh of ideas is better than no ideas at all!

[maxterpiece]

One more thing:
The other directions that the music industry has experimented with are way more wrong than the one Apple is potentially following. People aren't interested in liner notes (we got em online), nor are they interested in DVD with no special content. They buy music for music. And most importantly, they are not interested in buying CDs that cannot be burned. Its really just plain dumb to try to hold technology back. It'll have its way (it is having its way). Maybe if there was a true visionary in charge of one of these record companies he could pioneer the way.... cough cough, steve jobs, cough cough.

[BaghdadBob]

I'm gonna go through some emoticon labeled thoughts here:

:mad: Grrr! All you pirates out there need to quit implying that any legitimate music business needs to compete with music piracy. Look, I have lately taken to not liking Metallica for other reasons, but they did the right thing by attacking Napster. And they weren't the only ones involved, they were just the most vocal. Rich rock stars are not the only people who need records to sell to support themselves. The music industry employs a LOT of people. If you don't think so check out the credits on your album sometime. Those are only the people who have a contractual requirement for credit on the record. And as I think you've seen, many people are morally opposed to stealing music.

:eek: I've done some pirating myself. I don't want to tell you what expensive software I have on my personal computer that shouldn't be there. But I do have some morals...I never pirate anything I can afford and would buy if pirating it wasn't an option. To me that never includes music, because anyone can afford a CD, and if it aint worth buying, it aint worthy of imbedding in your brain. I only listen to pirated music long enough to figure out if I like it or not. Honestly. Whether that has anything to do with the rest of the world...I think maybe...

:) Even at $1 a song, you can buy an entire album cheaper than you could at the store. This could also bring about an era where bands stop putting in CRAPPY FILLER SONGS on their records. Because you're not trying to sell a record, you're trying to sell the songs. And from a studio standpoint, the number of songs created is directly related to the cost of producing the record.

:( I like liner notes. When you have an artistic band (see Tool, for example) liner notes are a killer way to employ 2D artists in the record industry and provide the buyer with something that is representative of the musicians visual sensibilities. They also serve to employ photographers for some of the dumbest photos you will ever see...

:D An online music revolution may finally put an end to pretty-boy bands (that includes other forms of pretty, not just boy bands). Maybe to MTV (wishful thinking). I am so, so, so very tired of bands that are marketed more by their looks than their talent. It has permeated every music scene, and it is the reason I don't even pay attention to current music as of a couple of years ago (except for the pending release of Lateralus). It could also spell a redistribution of wealth from the bands the record companies had to push on us in their old business model, to some of the talent scattered all over this country and the world.

:cool: A thorough and complete collection of all recorded music in one place available for a small fee could truly revolutionize things, and I believe forums not unlike this one will help spread the good word about lesser known bands. The more people are online to get their music, the more people will be online to talk about it. Think about it. How many Trent Reznors will pop up out there when all you need is a keyboard, a microphone, a G4, and the internet to get your music out there?

:confused: Anyway, babbling again. I wonder if anyone reads an entire post when it goes on this long?

[dongmin]

Originally posted by maxterpiece
- It is true that by selling online, the cost and investment of "releasing" an album will go down to almost nothing. The record companies will suffer a miniscule loss from a flop of an album, if it is released online vs. if it is released on CD. Prices will drop. Right now, however, just as when any new technology is released (see CDs in the 80s), there is an investment, and early adopters are going to pay a bit more until the companies gain confidence in the new format.

you make lot of intelligent points, but I disagree with you about the costs going down to nothing with online distribution. I doubt distribution costs is the main piece of the pie; marketing probably makes up a big part. How else are you gonna make people buy into acts like Britney and Backstreet Boys?

[MacAnonymous]

I really can't believe some people on here.

ANY online music service is trying to make it easy enough to buy music online... easy enough so people will bypass all the crap that goes along with Kazaa and other similar apps.

If it's easy to buy music online, by the song, search online, preview online.... I'll buy.

BUT, one thing everyone seems to forget is that most people that buy music these days are kids. Kids who DON'T HAVE credit cards. Hmmmm.....

ANY music venture started by ANYone will be based on the fact that music will be encrypted enough that ONLY certain services can offer it. Kazaa will be dead. Any music from now on (2004 on or some where close) will be dramatically different.

Or so the theory goes. ;-)

[xDANx]

Originally posted by Phil Of Mac
Besides, if no one bought music, it would be pretty damn hard to pirate it, wouldn't it? Where would they get it from? People seem to forget that music doesn't come out of a vaccuum. Music labels spend millions on bands who never earn them any money on the rare chance that they'll find one who will be profitable. When one is profitible, it takes millions in advertising to support them, not to mention the costs of producing videos and the production of the actual music. Does *anyone* deserve to have the music stolen from them at that point? Is music *really* overpriced? It's sold at these prices for decades. If it was truly not worth the price, people wouldn't have bought it all these years. It's only been when stealing became easier that people complain.

the statement that someone made earlier that the market value of music is zero is obviously false in a technical sense. but i think the point that an online music service is competing more with P2P apps than printed and pressed CDs is a valid one, and one that a company providing an online music service ignores to its detriment.

major record labels do not throw millions of dollars at bands hoping that one of them hits it big. they give bands restrictive loans that are payed back by the record label keeping the vast majority of the revenue from sales. never mind that many of the most profitable music acts were created ground up by producers and music execs...their profitability being a function of their created image and massive advertising. some bands work their way to the top, but for every metallica who bitches about internet thieves there's a courtney love or john denver to point out that internet file sharing doesn't hurt them but the label, which they feel is mostly screwing them anyway.

as for bands on independent labels, file sharing does nothing but good for them. they don't make much money on CD sales anyway...it's all about touring...tickets and merchandise, including CDs bought at their shows. if when they show up in your town, a hundred more kids show up to the concert because they downloaded the music from the internet that's a good thing for the band. just because people 'pirate' music on the internet does not mean that they don't support the bands that they like when they get the chance.

Well, face it, parasites. You may not be able to afford a 1990 Ford Thunderbird, but that doesn't give you the right to steal mine. Same with music. And you wonder where DRM comes from? You wonder why they shut down Napster? You wonder why copy-protection is turning into a religion for major software providers? Look at your own thieving, looting, parasitic selves. The recent looting in Baghdad is merely the real-life manifestation of Napster. No, you may not be storming into hospitals with Kalashnikovs to steal gurneys, but you are little better than the thugs who are.

:eek: oh, the melodrama...! this has to be one of the most overstated things i've read in a very long time, possibly ever on this site...and that's saying something.

[xDANx]

Originally posted by BaghdadBob
:mad: Grrr! All you pirates out there need to quit implying that any legitimate music business needs to compete with music piracy.
major record labels obviously feel like music piracy is their greatest challenge at the moment...i don't know why it's so hard to accept that an online music service needs to take alternative forms of procuring music online into account. personally, i hardly ever use P2P apps to find music, but mostly because the selection is crap. i stick to soulseek (please, oh please let there be an OS X version soon...!) and hotline/carracho/kdx servers that have the kinds of music i'm interested in.

:) Even at $1 a song, you can buy an entire album cheaper than you could at the store. This could also bring about an era where bands stop putting in CRAPPY FILLER SONGS on their records. Because you're not trying to sell a record, you're trying to sell the songs. And from a studio standpoint, the number of songs created is directly related to the cost of producing the record.
sure, at $1/song you can by an album _slightly_ cheaper than at the store...with no insert/art/lyrics, no hard copy...assuming that the album fits into the mainstream paradigm of 10-12 songs, 30-40 minutes. i have a number of albums that have 25-35 songs on them, all relatively short. it's not really worth it for me to spend $29 on 25 minutes of music now is it? of course, those types of albums are from from the mainstream...but if this upcoming music service only provides music put out by the big 5 it will have squandered much of its potential. i'm sure that a vast multitude of indie labels would love to get involved with apple on this...it would raise their visibility immensely and provide apple with a much wider range in their catalog.

[BaghdadBob]

Originally posted by xDANx
major record labels obviously feel like music piracy is their greatest challenge at the moment...i don't know why it's so hard to accept that an online music service needs to take alternative forms of procuring music online into account.

I don't find it hard to accept, but how do you compete with free? I don't know that you can. Offering a great service as an opportunity to legitimately support the musicians is about all they can do.



sure, at $1/song you can by an album _slightly_ cheaper than at the store...with no insert/art/lyrics, no hard copy...assuming that the album fits into the mainstream paradigm of 10-12 songs, 30-40 minutes. i have a number of albums that have 25-35 songs on them, all relatively short. it's not really worth it for me to spend $29 on 25 minutes of music now is it? of course, those types of albums are from from the mainstream...but if this upcoming music service only provides music put out by the big 5 it will have squandered much of its potential. i'm sure that a vast multitude of indie labels would love to get involved with apple on this...it would raise their visibility immensely and provide apple with a much wider range in their catalog.

Yes, they do need to make sure they implement a way to get all the goodies you get with a CD (in a digital form).

True, sometimes we forget about the indie labels because labels that one once thought were independant are bought up by people like UMG. I believe they will find their way in when the service becomes high profile, especially because they will need Apple more than Apple will need them it will be to Apple's advantage.

Also, I'm sure the pricing schedule will have more ins and outs than $1 a song. 50¢ a song actually might trigger massive revenues because impulse buying will be very high at that price, in my opinion.

But as far as the "credit cards" thing goes, most bank cards have Visa/MC on it now. How that works for kids...well, if a kid has high speed internet and a computer I bet they could get a bank card, but I don't know if those have the Visa/MC stuff on it.

Maybe Apple will implement debit accounts for the service that can be set up by an adult with a CC? It is a good point, as kids buy a whole lot of records.

They could also work these into kiosks or PATs in the future. You'll have to replace the corporate record stores with something...

[xDANx]

Originally posted by BaghdadBob
I don't find it hard to accept, but how do you compete with free? I don't know that you can. Offering a great service as an opportunity to legitimately support the musicians is about all they can do.

i think that you can compete with free in this case...you can compete by removing all the problems of P2P file sharing for a reasonable amount of money ($1/song is not reasonable, IMHO). those problems include: spending hours looking for songs you can never find, improperly labelled songs, songs encoded with poor quality, etc. i think people would be willing to pay a nominal fee to rectify that.

[Phil Of Mac]

Originally posted by type_r503
Actually it was E961 Million a 21% decrease over the previous year. And UMG was the only profitable music outfit in 2002.

The idea that the music industry invests millions in no name bands hoping they make it big is simply false. A more accurate description would be that they create bands like Britney Spears, NSYNC and eminem, and force them upon us with overplayed music videos, and looped radio playlists, yes the record companies pay for play. The investment on their part is not very risky at all.

I am not advocating theft, am simply saying that the days of charging $.99 per song are over. What if you had to pay $7 per TV show you watched? This happened before the invention of TV. If you wanted to watch a show you would have to go to the movies and pay per show. TV was feared by the movie industry, when it came out it was free. The Warner Bros, who are now the largest TV studio, claimed that television will never make it. As the Television industry grew they developed ways to make money, through comercials and pay services.

The music industry is at a similar crossroad. They can figure out how to use the internet as a media or the can go out of business, like so many early movie studios.

type R

UMG still has more profit than Apple.

And the music industry does invest millions in no-name bands hoping one of them makes it big. Obviously, they invest more in bands that they think will do well, but the vast majority of artists that any label signs end up losing money. Only a few are profitable. (Also, lumping in Eminem with Britney Spears and NSYNC is very inaccurate and shallow. Eminem is actually talented--and wasn't made by his record label. :) )

TV is a bad comparison. Peer to peer isn't like television, radio is like television. Also, television doesn't involve theft. Now, music theft is difficult to stop, but it's easy to compete with, because P2P networks are notorious for the difficulty of getting stuff. It's an injustice that they have to compete with it, though.

[type_r503]

Originally posted by Phil Of Mac
Eminem is actually talented--and wasn't made by his record label. :) )

I don't want to make this thread anymore political but, if you cannot see the exploitation that is Eminem, you should look no farther than the Beatles, and Elvis, then wonder how he defied such impossing odds. If you will let me make a suggestion go get KRS 1's new album and ask yourself were the real hip hop is, or get Mos Def's Black on Both Sides and play "Rock n' Roll" a few times and really listen to the lyrics.

With respect to TV, I was simply pointing out that both Television and the Movie industries had to change their strategies. At this point in time the Music industry must adapt to the Internet as a media for delivery in order to survive, hence a 20% drop in revenue. I believe that charging $1 for a song is not a wise move. But we will see in little over a week...

type R

I wasn't just being an a**hole, please check those albums, and if you need anymore suggestions let me know. We must keep hip hop real.

[Phil Of Mac]

Originally posted by type_r503
With respect to TV, I was simply pointing out that both Television and the Movie industries had to change their strategies. At this point in time the Music industry must adapt to the Internet as a media for delivery in order to survive, hence a 20% drop in revenue. I believe that charging $1 for a song is not a wise move. But we will see in little over a week...


Yes, they had to change their strategies. But the important difference is that movies had to adapt because of legitimate competition, not theft. Competing with theft is difficult. Who wants to buy a chair from a Baghdad furniture store when he can just grab what he wants with the help of his AK-47?

I really have no clue exactly what you have against Eminem. Is it that he was made by a record company? Because he wasn't. Is it because he's a white usurper? Then why the collaborations with black artists? Is it because he's white? That's a personal problem. Is it the mere fact that he's popular? There have been many talented artists who were popular. Is it that he doesn't follow certain conventions of the genre? That's how music evolves. Or, is it because he just isn't that good? I don't listen to much hip-hop, so I wouldn't be able to objectively compare, but that would greatly be a matter of personal taste anyway.

[BaghdadBob]

Originally posted by Phil Of Mac
I really have no clue exactly what you have against Eminem. Is it that he was made by a record company? Because he wasn't. Is it because he's a white usurper? Then why the collaborations with black artists? Is it because he's white? That's a personal problem. Is it the mere fact that he's popular? There have been many talented artists who were popular. Is it that he doesn't follow certain conventions of the genre? That's how music evolves. Or, is it because he just isn't that good? I don't listen to much hip-hop, so I wouldn't be able to objectively compare, but that would greatly be a matter of personal taste anyway.

Well, I don't think he was saying he necessarily "has something against" Eminem, he's just trying to point out a couple of artists he thinks need to be heard because they are talented too, if not more talented (I'm assuming).

Isn't this great? This is the true beauty of such a service. This isn't even a music forum and in the space of a couple of posts you have someone sharing some lesser-known artists. This is what excites me about this most.

This is the real importance of widespread internet music to the masses. The proliferation of undergraound music to a global stage -- with the possibilty of those artists actually making money. I love it.

[GeneR]

Originally posted by slavey
Well, it seems that maybe it's a good time to pick up a few shares of Apple.

I was thinking the same thing. :D

[type_r503]

Originally posted by Phil Of Mac
Yes, they had to change their strategies. But the important difference is that movies had to adapt because of legitimate competition, not theft. Competing with theft is difficult. Who wants to buy a chair from a Baghdad furniture store when he can just grab what he wants with the help of his AK-47?



OK, this starting to get a little old, if you know it or not you are reenforcing what I a saying. It is extremely hard to compete with FREE. Apple will be charging $1 for something that can be had for FREE with little or no consequences to the offender. Regardless if it is stolen or not it is FREE. Sharing music or any file is a little different from looting a store in Bagdad.

The real talent of hip hop has moved underground. How can you claim Eminem is talented if you admit you don't listen to hip-hop? What I am telling you is that the music industry is capitalizing on this by promoting a dyed hair Jerry Springer. Someone who will say anything for money. The industry knows who buys records, white suburbanites, so who are they gonna market to them? Elvis, the Beatles and now Eminem.

Saying this, I will repeat, get MOS DEF and listen to "Rock 'n Roll" he will explain the whole thing to you. Public Enemy's "Fight the Power" is another example. The so called devil is stealling the soul. It happened with Jazz, Rock n Roll, and is happening with Hip Hop.

Just to spread the gospel, Jurrasic 5, Talib Kwali, Common, Planet Asia, Dialated Peoples (which has a white member), De La Soul are some of the leaders of the New School and real hip hop.

[BaghdadBob]

Originally posted by type_r503
What I am telling you is that the music industry is capitalizing on this by promoting a dyed hair Jerry Springer. Someone who will say anything for money. The industry knows who buys records, white suburbanites, so who are they gonna market to them? Elvis, the Beatles and now Eminem.

Okay, I was wrong, Phil, he does have something against Eminem...Get 'im! :D

type_R, I've listened to my share of hip hop, and I too think Eminem is talented. On the other hand, I agree with you that if he didn't have strong backing he wouldn't be the success that he has been, just like many superbly talented and unappreciated artists. From what I understand Dr. Dre chose to work with him on Chronic 2000 just from hearing demos of him and claims he didn't even know he was white, but Dr. Dre too has become a symbol of corporate hip hop. I don't know if it's a fair accusation to say that he will "say anything for money" or if it is more fair to say that someone who will say anything is going to be highly successful in the hip hop business...so which is it, the chicken or the egg? Is he successful because he will say anything or will he say anything so he will be successful?

But I digress. It's really not important enough to me to argue, I just wanted to bring that into the conversation. I'm fairly split on Eminem myself, as I feel he is a really talented rapper, but I don't know if that speaks to any worth to his music. The singer from the Scorpions was pretty good, but does that make them worth listening to? Depends on what you want from your music. But I digress, again.

R, you should be happy, beacuse I believe artists such as rappers will benefit the most from this service, because independent recording of hip hop takes a hell of a lot less than rock, and since (assumably) more artists will have the opportunity to distribute their work than ever before, it will become a worthwhile process to make albums on a small budget.

[joker2]

http://www.macedition.com/nmr/nmr_20030416.php

Maybe Apple is only interested in buying the portion of Universal that worked on AAC? It would fit in with not having made an offer "for the company"

[Phil Of Mac]

Originally posted by type_r503
OK, this starting to get a little old, if you know it or not you are reenforcing what I a saying. It is extremely hard to compete with FREE. Apple will be charging $1 for something that can be had for FREE with little or no consequences to the offender. Regardless if it is stolen or not it is FREE. Sharing music or any file is a little different from looting a store in Bagdad.

The industry knows who buys records, white suburbanites, so who are they gonna market to them? Elvis, the Beatles and now Eminem.


Actually, getting music from P2P networks *is* stealing. It's to a lesser extent than openly looting stores, but I consider it hyperbole.

I *am* reinforcing what you're saying about it being hard to compete with. In fact, you're reinforcing what I'm saying about it being hard to compete with. However, I will qualify my remarks by saying that looking through an Apple Music Service catalog would be more convienient than searching on LimeWire, not being able to connect to half the hosts, getting cut off in a download attempt, and not finding less common music.

Thanks for explaining what you meant about hip-hop. I might check out those artists as soon as the Apple Music Service starts :) (And to answer your question, I rated Eminem on the standard of whether or not I enjoy listening to him :) )

Although, in all fairness, I will have to say that the Beatles were one of the most talented and innovative music groups there has been. Not to mention that they started well after white artists began to perform rock on a large scale. Elvis is a slighly more fair comparison, however.

[The Reaper]

Apple (Nasdaq: AAPL - News) has never made any offer to invest in or acquire a major music company

...and Apple probably never will.

i think that steve jobs will divert some funds from apple to 'restructure' Universal records, naming himself CEO. that is EXACTLY what he did when he purchased Pixar in the 80's. Steve Jobs isn't just the CEO of apple: he is apple. everything that apple does centres around HIS visions. so, if steve is CEO of universal, then universal is (effectively) a part of apple (at least it will serve whatever part of Apple's strategy that he wants). the advantage of this is that it is far cheaper than actually buying the company.

in any case, i think this is more about Steve. from what i have seen, he has a very big ego (as he should), and has some significant desire for power/control over the things he likes. so he has his own computer company because he likes computers. he has his own movie company because he likes movies. he (used to) have 'his own' clothing company (GAP) because he likes clothes. and now, he wants a music company. of course, this latest conquest will also play into Apple's strategic goals, but i think it is ultimately about Steve.

on a side note, i do think that Pixar will eventually play a greater part in apple if apple eventually decides to include movies in its strategy (the download service, not digital hub). Steve Jobs is getting s***ty with Disney because they screwed them over with the Toy story movies. currently, Pixar makes the movies and disney distributes/promotes them. this may soon change.

All of Steve Jobs current (and future) companies will, i think, have to be considered together when he shows us his master plan for them. i have a feeling that he has had a master plan for some time, probably since he was first ousted from apple in 1984, and the pieces are only now beginning to fall into place. apple is a large and important part of this, but it isn't the entire picture.