Apple and Universal... Again?

[MacRumors]

NYDailyNews.com reports that Steve Jobs and Universal may be talking again -- but talks appear to be a bit tamer:

The Apple Computer boss, who just launched the iTunes digital music store, has been talking to board members of Vivendi Universal about making an equity investment in Universal Music Group, sources told the Daily News.

Rumors of a Universal buyout by Apple in early April prompted a statement from Apple denying such claims.

 

[RHutch]

I would still like to see this happen, whether Apple buys all or part of Universal. I think that it would give them a little more control over how these new online pay music services operate. It may influence the success of the iTMS.

 

[Foocha]

Hmm - I struggle to understand this one.

Owning part of Universal Music does not appear to forward Apple's goals in any way - and iTunes Music Store appears to be doing very nicely without the help of any acquisition.

If I was Apple, I'd be more interested in purchasing Tivo (at a knock-down price), and perhaps Quark (at a bargain-bucket price).

 

[Frozone]

I think buying Universal would be a good move for Apple. But it's Apple so who knows.

 

[J@ffa]

What's an equity investment? Is it a controlling share or something along those lines?

 

[Jaykay]

Maybe its so that Apple can have some kind of control over what other online music services Universal is a part of..

 

[Wardofsky]

Unless it gains international compatability, I don't care what it's about.

Well, I do but I need music.

 

[NavyIntel007]

I think it's a great idea. Beat Microsoft at their own game. Microsoft always bullies people into using their stuff and makes it unavailable to others (unless it is seen as profitable to them). If apple takes Universal Music a big chunk of the music that's out there won't be available to people who use any other service but Apple's service. Apple could then decide they will make it available with a higher royalty rate. It would be a beautiful thing.

 

[P-Worm]

Originally posted by NavyIntel007
I think it's a great idea. Beat Microsoft at their own game. Microsoft always bullies people into using their stuff and makes it unavailable to others (unless it is seen as profitable to them). If apple takes Universal Music a big chunk of the music that's out there won't be available to people who use any other service but Apple's service. Apple could then decide they will make it available with a higher royalty rate. It would be a beautiful thing.

At a higher rate? How would that be a beautiful thing? I agree that Apple needs to be more agressive in this market, but I don't want that to trickle down and hurt us, the consumer.

P-Worm

 

[RHutch]

Like the CD clubs...

Originally posted by NavyIntel007
I think it's a great idea. Beat Microsoft at their own game. Microsoft always bullies people into using their stuff and makes it unavailable to others (unless it is seen as profitable to them). If apple takes Universal Music a big chunk of the music that's out there won't be available to people who use any other service but Apple's service. Apple could then decide they will make it available with a higher royalty rate. It would be a beautiful thing.

This is the same point that I was trying--but failed--to make. I think that Apple could make this work like the BMG and Columbia House CD clubs. You can get most titles from either club. But each one has some titles that you can't get from the other club. You can get it from retail, but not from one of the clubs. I think that Columbia House has more titles that are exclusive than BMG does.

So maybe Apple could try to convince more users to use iTMS because it will have titles that noone else will have. Or, as pointed out above, Apple could make it unprofitable for other services to offer some music by increasing the royalties on that music.

Now that Apple is in the music business---people might argue that, but really they are--I think that owning a part of a music record company is smart. Think about it, if Apple owns part of the record company, Apple will see profits twice from some of the iTMS music sales.

 

[mustang_dvs]

Not Again...

*beats head against desk*

Next I bet we'll see the return of "Disney to Buy Apple" or the even more intriguing "Apple to Buy Disney" or the outlandish "Pixar to Buy Disney."

 

[nuckinfutz]

Originally posted by Foocha
Hmm - I struggle to understand this one.

Owning part of Universal Music does not appear to forward Apple's goals in any way - and iTunes Music Store appears to be doing very nicely without the help of any acquisition.

If I was Apple, I'd be more interested in purchasing Tivo (at a knock-down price), and perhaps Quark (at a bargain-bucket price).

So you mean to say you'd rather Apple pass on a company that produced much more profit than Apple did on on the whole in 2002 for Tivo a company who's balance sheet shows emminent death if they don't increase their subscriber totals? I don't know about that

Apples goals are to grow financially..that's a given. Any deals with Universal could be considered "forwarding" that goal.

 

[fred]

As soon as news of this sort rears its ugly head AAPL stock tanks... please bury this rumor once and for all my heart can't take it

 

[whooleytoo]

Originally posted by RHutch
I would still like to see this happen, whether Apple buys all or part of Universal. I think that it would give them a little more control over how these new online pay music services operate. It may influence the success of the iTMS.

Wouldn't it also cause problems? If Apple owned Universal, it would be a competitor to the other recording houses, would they continue to support iTMS then?

Mike.

 

[RHutch]

Originally posted by whooley
Wouldn't it also cause problems? If Apple owned Universal, it would be a competitor to the other recording houses, would they continue to support iTMS then?

Mike.

I suppose that it could cause problems, but I think that the record companies like making money regardless where it comes from. As I mentioned before the CD clubs do have exclusives, but they don't keep their entire catalog exclusive. Regardless of who sells one of their CD's, BMG still makes some money on it. It would be similar here. The other companies would probably not give Apple access to all of their stuff for the iTMS, but why wouldn't they want to make money every time one of their songs is sold by Apple?

 

[klasseng]

Apple buys eMusic.com from Vivendi

That would be the headline that would make sense to me. Right now iTMS has access to most major label artists. Buying eMusic.com would double the number of available tunes and sign up 900 independent labels. It would also provide greater returns to the eMusic artists because $9.95/mo/unlimited downloads can't be putting much in the hands of the artists.

Grant

 

[gwangung]

Re: Apple buys eMusic.com from Vivendi

Originally posted by klasseng
That would be the headline that would make sense to me. Right now iTMS has access to most major label artists. Buying eMusic.com would double the number of available tunes and sign up 900 independent labels. It would also provide greater returns to the eMusic artists because $9.95/mo/unlimited downloads can't be putting much in the hands of the artists.

Grant

Apple gets equity stake and gets access to the music on eMusic? That would make sense to >ME<....but what do other people think?

 

[Foocha]

Hi nuckinfutz

It's not enough of a reason to purchase a company, simply because it is profitable. There's no shareholder value in this.

The objective of mergers and acquisitions is to find synergy of cut costs. It's hard to see how Apple purchasing Universal will deliver either of these. On the contrary, it could undermine their perception as being even-handed when negotiating with other record companies.

Take a look at Apple & NeXT as an example of a successful acquisition. NeXT has surely saved Apple, and yet if it had soldiered on alone, I doubt it would still be around today.

 

[stompy]

Re: Not Again...

Originally posted by mustang_dvs
*beats head against desk*

Next I bet we'll see the return of "Disney to Buy Apple" or the even more intriguing "Apple to Buy Disney" or the outlandish "Pixar to Buy Disney."

How about Pixar to buy Apple? Steve must be tired of the commute between Jobs.

 

[Blackcat]

Not music?

Maybe Apple wants Vivendi Interactive before M$ gets it. Games do sell systems, and most people are not hardcore gamers who need to add a $400 graphics card every 3 months.

 

[hbwill]

I think this would be a bold move, if not too expensive. Vivendi needs cash. Apple has cash, but Apple can't afford to loose to much of its reserves (its share value is largley based on its cash holdings, and the large cash reserve is Apple's insurance against difficult times). However, Apple has a small (and probably short lived) competitive advantage in consumer markets on digital media and leadership in that area. It takes very little to make iTunes and Apple Music a me-too service also available on Amazon. One way Apple can leverage its new leadership position in media management is to gain control music licensing. This allows Apple to be a major influencer in the adoption of media rights schemes, and also allows Apple to associate the music itself with the Apple product line, moving for greater and greater integration. Also, Universal is capable of being an independent revenue stream. Overall, I think this would be a winner for shareholders.

 

[gerror]

I would like to see Apple buying a gamepublisher wich will port every cool game. So we are gueranteed to have new games and don't depend on the other publishers