Here's anoter one! (pretty complicated!)
A buddy of mine in the music industry sent me this (before noon!)...
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Subject: Roger Ames To Apple
With the installation of Lyor Cohen as head of the new Warner Music Group, Roger Ames has become a lame duck. Rumor had it that with a contract guaranteeing he report to no one else in the music division, he was biding his time, waiting for Edgar Bronfman to pay him out, or make him an offer. Now with YEARS left on his contract, Edgar didn't want to just send Ames home with a paycheck, so he decided to TRADE him to Apple Computer. It's a well known fact that Mr. Ames was the record company point man for the iTunes Music Store. It was he who met with Mr. Jobs first, and then convinced the heads of the other four record business families to play along. And in doing so, he performed a coup that allowed the RIAA to sue file-traders with impunity, putting forth that a LEGITIMATE ALTERNATIVE to P2P was extant. Although a brilliant marketer with a charismatic personality, Steve Jobs has been hampered with little music business experience.
To add Mr. Ames to his staff would add a level of expertise that would TRULY allow him to dominate the sphere. One of the hitches in the deal was Mr. Ames' exorbitant salary. This is not how Silicon Valley works. Payment is in stock options, or incentives. Except for CEOs, no one gets paid an eight figure salary. So, a WONDROUS deal was worked out with Warner. Apple will pay half of Mr. Ames' contractual salary. And will then guarantee Warner constant homepage placement at the iTunes Music Store. Yes, for a year now, Apple has said they're beholden to no one. That all companies receive the same compensation, that Apple itself determines what is placed on the homepage.
But, after dealing with the sleazy music business for over a year now, Apple found it better to THROW IN with them rather than try to change the paradigm. Oh, Apple stonewalled, but in a secret deal only revealed now, they hired Walter Yetnikoff as a consultant and he said famously, as he banged his fist on the table in Steve Jobs' Gulfstream, DON'T BE A SCHNORRER STEVE, PLAY THE GAME, PAY THE INDIES! Supposedly this was in an early draft of Walter's memoir, but was excised by the Apple brass, who are NOTORIOUS for being tight-lipped about their future activities.
But why be in business with Walter Yetnikoff to begin with? The Sony connection. Although Sony has provided components for Macintosh computers all the way back to the eighties, now the Japanese company is their number one competitor. In a late night meeting that Walter insisted be held at Scores, he convinced Mr. Jobs that he still had pull with the "Japs" as he called them. That he'd pulled the wool over their eyes one time, getting them to hire Guber and Peters to run Columbia Pictures, and he could do so again, no problem. That although they'd fired him, he still had a great relationship with them, ESPECIALLY now that Tommy Mottola had blown up Sony Music.
So, at the next iTunes announcement. Scheduled for the next thirty days. It will be announced that Sony is going to FORGO their online store. Yes, Walter convinced the Japanese that to establish another format would be death. That they were too late, they'd get no traction, it was Beta vs. VHS. That the only way the business could grow would be if there was a STANDARD! And the only way to avoid having Microsoft steal the entire business was for everyone to throw in together and hold hands. Sony is not interested in a music store per se, rather they're interested in selling hardware.
They WILL put the iTunes Music Store on all the computers they market under the VAIO name, but this is a mere fraction of the overall computer market. HOWEVER, for the first time ever, Apple is going to LICENSE the iPod intellectual property. This IS NOT an HP deal. This is not Apple manufacturing product that will be branded with another company's logo.
No, having realized they lost to Microsoft in the operating system wars, Apple is licensing their core software to Sony and letting them RUN WITH IT! Letting them tweak it, push the envelope, create new, innovative products. Now, analysts might say this is giving away the store. But, in addition to a royalty for every Sony iPod sold, Apple will receive ONE THIRD of net profits on ALL shipments in excess of their own branded product. Thus, if Apple has twenty percent of the market for hand-held MP3 players, and Sony has twenty five percent, Apple will receive one third of the net on the overage, on five percent in this case. There is, however, no truth to the rumors that Sony will now make Macintoshes. This deal is solely about the music sphere, to insure that Apple is not crushed by Microsoft, or slowly pecked to death by competing services. But what of Mr. Ames you say? Well, avid readers of "Rolling Stone" are familiar with Mr. Jobs' interview in the magazine last year within which he said the problem with the major labels is the advances. That he would give lower advances, and split the money more equitably. THIS is why he's hired Mr. Ames.
Yes, Apple Computer is going into the RECORD BUSINESS! Although they've decided to dive into the dark world of crooks, deep down inside, Mr. Jobs knows he's no match for Jimmy Iovine. After all, Jimmy ALWAYS wins, whereas Mr. Jobs' Next was a failure. The key is to ELIMINATE Jimmy. Jimmy is about spending. Jimmy is about what's expedient. Whereas Mr. Jobs wants to CHANGE THE WORLD! That's what the new crop of acts wants to do, change the landscape, have an IMPACT on society. And who better to sell them, convince them to come along with HIM, than Steve Jobs. All he has to do is point to Pixar. Where artists work without the heinous interruptions of entertainment moguls like Michael Eisner. Where every project is nurtured and every project is a HIT!
THIS is what true artists want. People who allow them to work UNFETTERED, knowing that great art triumphs, rather than executives only interested in quarterly numbers who will drop you in an instant. All Apple deals will have under $100,000 advances. All revenues will be split 50/50. And there will be no long term contracts. Yes, Steve is taking a cue from the movie business. The studio system is DONE! If you don't trust me, if you don't like how I do business, you can walk. But where are you going to go TO? Don Van Cleave and his CIMS stores will survive, feeding those who hunger for physical product, but they're just a blip on the radar screen. No, most people will want DIGITAL FILES! Something the major labels consider ANATHEMA! Something that JOBS had to convince them to sell. So, it looks like even though the acts can walk, there'll be nowhere to go. The iTunes Music Store will be the only game in town. Mr. Jobs ASSURES the Justice Department, which is already sniffing around this deal, that he will not penalize anybody who is not on his label, especially those who leave. He will take all comers, all labels and pay them sixty five cents a track.
But will Mario Monti sit for this? It's too early to tell. But what about Mr. Ames? What will his role be. He will be the funnel for talent. Techies NOTORIOUSLY have bad musical taste, most of them inured to eighties new wave music, they need a PROFESSIONAL to find the good stuff. Now there's been a scramble. All the out of work A&R guys have been text messaging Mr. Ames for jobs. But rumor has it he's going to hire a few key Englishmen, but, other than that, he's going with unknowns, paying them bupkes, promising them a piece of the action. And you thought the merger of Sony and BMG was the play. No, today the music business has been TURNED UPSIDE DOWN! In one fell swoop it's been REVOLUTIONIZED! And the plans for the FUTURE!
Those on the Apple label (yes, it will be called Apple, this is why the case with the Beatles is being moved to California, it's felt that after months in the sunshine the representatives of the Fab Four will capitulate to a licensing deal, AND, it's rumored that Mr. Jobs has offered both Yoko and Ringo recording deals as incentives) will be ROYALTY FREE on Internet radio. And all tracks on the Apple label will be sold WITHOUT copy protection. FURTHERMORE, everyone who buys an iPod will get the complete Apple catalog free (no, not the Beatles songs, just the new acts). Supposedly, Mr. Ames has already signed three acts. However, at press time, it was unconfirmed whether one of those was a reunited Bananarama.