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Apple To Buy Vivendi's Music Division For $6 Billion

RE: MP3.COM

I wonder how/if Michael Robertson, Founder/CEO of MP3.COM fits into this?

He is a big Mac guy (currently a big Lindows guy).
 
Another opinion...

Just to add a bit of realism - Apple's stock price today has NOTHING to do with the discussion of Apple | Universal. Nor the new iPods, nor anything else.

I don't know about any of you, but I have believed in Apple since I bought their stock MANY years ago. When they ran into the 50 and 60 dollar area I sold a bunch - and today I'm buying more.

This company is all about ideas and people and making the two fuse together. There is not one other company I believe in as much as Apple - nor does any company have my brand loyalty like Apple does. The funny part is that I'm not even a die-hard Mac fan. I have a Mac, I use a Mac - I have a PC, I use a PC. It's the company behind the Mac that I love...

Also - IF :confused: Apple buys Universal, I would have to guess they will continue to be run as seperate entities... The fall of Universal would not, in any way, affect Apple's current business - computers.
 
Absolutely no doubt that Apple's proposed purchase of Universal is risky. There are the obvious downsides, which folks have been articulating.

But there is plenty of upside, as well. Much of this has to do with the fact that the music business >IS< in the doldrums, which makes it a good time to buy.

Another part is that there is going to be a paradigm change in the way the labels distribute music...and one thing that Apple is good at is paradigm change....
 
Sony already does this

I saw Sony mentioned a couple of times but no one said anything about how they are both a media company and a technology company. Why can't Apple? If you were going to buy into the media business NOW is the time to do it, while the industry is WAY down.

6 Billion is not even the asking price at this point... that's just what Apple is willing to pay!

I'm not sure if it makes sense from a direct business analysis POV but in the long run it could be very significant. Jobs is a visionary type and it seems that he is much more interested in cool long term potentials than in short term profits (though he does fairly well at those too).

On the rumor side of things, do you think this is the basis for the rumored music service or is it a separate extension? Will the on-click music ordering still happen if this falls through?
 
Re: Another opinion...

Originally posted by jriga
Just to add a bit of realism - Apple's stock price today has NOTHING to do with the discussion of Apple | Universal.
Click to expand...

I beg to differ. the story has been picked up EVERWHERE. The trading today- and the incredible volume was triggered by this rumor. It's the only apple news other than 10.2.5 being released.

We're well below the 52 week low. And have dipped below $13 (10% loss).


(edit: link wrong)
 
This would be a big mistake

From a financial standpoint (I'm a finance and economics consultant and researcher), I think this deal is a big mistake for Apple. The music industry has very volatile earnings and cash flows, which could only compound problems for Apple given that its core business in personal computers is also quite unpredictable. Almost every company who have purchased a record label in the past has had problems unlike no other. Sony itself has been reconsidering its purchase of CBS Records (now Sony Records) and Columbia Pictures for quite some time now. Although it has made obscene profits for the company, the income generated has been unstable and resulted in many headaches. (Sony had to take a massive write-down in the early 90s).

Apple should just do what it does best: focus on creating good computers and good software. OS X still needs more work. The G4 architecture is badly lagging behind Intel and AMD. Don't build an empire at the expense of core business.
 
If Apple's stock dip has nothing to do with this rumor, then why have they fallen $1.25 today? There is no other data or reason for this dip other than this info. Vivendi Universal is down a bit as well. I think that unless has something to allow Windows users to take advantage of this also that it could blow up very quickly. As much as I like having things Windows users can't, a ourchase like this could very easily make Apple take a huge hit. I'll wait for Apple to tell us what's what, but I am nervous about this. Also, if this happens, there better be some new hardware in the pipeline for sure, otherwise Apple is really moving in the wrong directionn here.

My 2¢

Regards,
Gus
 
Re: Re: Apple To Buy Vivendi's Music Division For $6 Billion

Originally posted by robodweeb
If Apple proceeds along this route, it will either fail or succeed. If it fails, Apple fails and we all definitely lose. If it succeeds, I think we still lose because more and more of Apple's corporate attention would be devoted towards Apple's music business at the expense of everything else.

I don't buy Apple products to create music or videos (nor to listen to music or watch videos). I buy them to make my personal, corporate, and academic (research) work a little easier (but not *that* much easier than using current Wintel products). Apple products have had the flexibility to help me to do that, though I have noticed that Apple's/Jobs' apparent obsession with music and video has caused the improvement of Apple products in the areas of *my* use to languish. Apple computers are under-powered, over-priced, and lacking in features that available to most of the world.

Mass-personalizing entertainment and leisure is, perhaps, a cool thing but, at the end of the day, it doesn't put food on the table or pay the mortgage, or help someone send their kids to college. If you learn nothing else from Microsoft's success (other than the futility of bitching about it), you should learn that mass-personalizing productivity and utility drives purchasing decisions more than entertainment. People will put up with crap because they accept the rationale behind that.

Apple seemed to be headed in the right direction - the "digital hub" concept personalizes utility - but has apparently been distracted by their corporate obsession. After all, how many of us have a digital hub in our homes that functiona t the level promised at the outset?

In a sluggish economy, is it really responsible to squander a strong cash posiiton on one shot? Maybe Apple knows some set of data that says "yes" but, as far as I can tell, the answer is strongly "no" ...
Click to expand...


Very well put. I worry about how a deal like this will tend to focus Apple's attention away from their most important, core business. I worry that a deal like this could potentially lead to huge problems for the part of Apple that I actually care about, namely their computer business. :(
 
Re: This would be a big mistake

Originally posted by macktheknife
Sony itself has been reconsidering its purchase of CBS Records (now Sony Records) and Columbia Pictures for quite some time now. Although it has made obscene profits for the company, the income generated has been unstable and resulted in many headaches.
Click to expand...

I think most companies would be happy to deal with "many headaches" in exchange for "obscene profits."
 
Originally posted by JPGR_Fan
Random thoughts:

I think it's true that Steve Jobs loves music, and he must think he is a good executive in the creative fields (e.g. Apple itself, but especially Pixar).
Click to expand...

Steve is the absentee investor at Pixar. He doesn't run the company. At all. Don't speak if you're guessing.

Dan
 
Re: This is a bad idea

Originally posted by digitalbiker
More garage bands and artists will be recording and distributing their own music. They will become world wide popular and make masses of money by personal appearances, sponsorship, promotions, and some revenue off of distribution networks.
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I think this is a debatable issue. Without extreme financial backing crossed with promotions, marketing, etc. some little garage band from Akron could never become the next U2 or whomever. Let's not forget that there are billions of people in the world who have never used the internet, much less used a telephone. I think if the recording industry goes under, you'll see music and artists become more successful regionally, and fewer worldwide stars. To paraphrase Wired: "Sure you won't have any Michael Jacksons circa 1982, but you won't have any Michael Jacksons circa 2002 either. Sounds like a fair deal to us." ;)
 
I don't know if this has already been brought up or not, but does anyone realize that if Apple bought Universal, they would own Death Row Records, and Suge Knight would work for Apple? Maybe Motorola could be "convinced" to work a little harder on that G5 of theirs.
 
Originally posted by daedelgt
With a resonably priced music download service, Apple could make profit from every single download while offering the singles at a price lower than the unit price you pay on a CD!
Click to expand...

You mean reasonably priced like Pressplay and Musicman? It's a buck a song if you use either of those. Nobody's using them. Apple needs to price it lower (no more than 50 cents a song) and of a higher quality download that is exclusive to them. Otherwise this little $6 billion dollar experiment will fail, I predict.
 
Originally posted by alex_ant
I don't know if this has already been brought up or not, but does anyone realize that if Apple bought Universal, they would own Death Row Records, and Suge Knight would work for Apple? Maybe Motorola could be "convinced" to work a little harder on that G5 of theirs.
Click to expand...

I spit my drink out on my screen after reading this...
 
Maybe we'll eventually see music vending machines instead of large record shops. I heard a while back that in Japan you could co to such machines with a MiniDisc and purchase a single song and it would be recorded onto the MD. Anyone know if that is true? Maybe they said you bought the MD pre-recorded from the machine. I forget.
Click to expand...
You can buy CD's from vending machines, but albums are like 30 dollars...what a lot of people do is *rent* CD's from rental shops or buy used CD's for about 1-2 dollars and then record them to MD, when thier tired of the song they just erase it and rent another one...it was only about 3 dollars last time I rented....a long time ago for an album...and its entirely legal!! I don't know about MD recording by vending machine, I haven't been back in along time....but it probably exists somewhere...
 
Just a thought... Apple's stock goes down after every MacWorld, no matter what the product announcements are. Ironically, nearly every time there's bad news, the stock goes up. Just a thought.
 
Everybody seems to be harping on the fact that the record companies are in the doldrums. That's precisely why Apple would want to buy UMG. They would revitalize with what would be to most people a radical new way of marketing music. There have been consistent rumors on this subject for a long time and it seems to be coming together now. An internet based distribution model would be a minor fixed cost to the wads of cash they'd be hauling in. And with the popularity of broadband picking up, it wouldn't be at all unpleasant for your average computer user who just wants their stupid machine to work seamlessly.

To those who complain about Apple focusing on this service rather than their products, if Apple keeps a healthy understanding of their main objective, this will provide massive amounts of capital which they can devote to R&D.

I think the timing is perfect. People (overall population, not us computer freaks) are just now getting familiar to the concept of digital music. Broadband is starting to catch on. DRM is becoming a big issue; Apple could lead the discussion and set the precedent on this issue with a forceful market entry (and Apple seems to be on the consumers side on this issue. This is Apple's chance to clean up the mess and create a great model of what everyone else tried to do but always missed (the iPod, anyone?). They are entering the market when it's just getting hot. I expect great things ahead.
 
This would obviously be a risky move for Apple. As I see it, the success of the whole venture would hinge on the music download service. It would have to be revolutionary to the point where most people would abandon the free file-sharing services that are available.

Music companies are currently running an outdated business model. Maybe Apple is right company with the right idea at the right time. I like the idea of Apple leading another revolution.
 
Sell music via kiosk, not via mass market CDs.

If you want liner notes, they're on the CD.

Want a neat-looking jacket for the CD, pick from ten on the CD and print it.

Buy one song, or an entire album.

Walk into your local Movie Gallery, Blockbuster, pick your songs, your CD burns in seconds, you pay, you get the CD.

Reduce the dollar volume from $6billion to $2billion, but double your profits by eliminating all the hassles of preprinting, deliver, Unions, etc.
 
As others have pointed out, I don't really see this being aimed at those who illegally download music. It's aimed at a slightly higher aged demographic that still knows when something's wrong but will gladly participate in a new market that really revolutionizes the industry. The thing Apple has to focus on is getting the attention of this demographic and as certain factors are falling into place, it won't be that hard. That's why I said I thing the timing is great.
 
Originally posted by alex_ant
I don't know if this has already been brought up or not, but does anyone realize that if Apple bought Universal, they would own Death Row Records, and Suge Knight would work for Apple? Maybe Motorola could be "convinced" to work a little harder on that G5 of theirs.
Click to expand...

ROFLMFAO
 
Originally posted by moosecat
Uh, I'm not sure what you mean when you say that Apple is "worth about $700 million," but the market deems Apple worth a hell of a lot more than that. Market capitalization (number of shares times price) is over $5 billion.
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Right, but the previous poster's point was that Apple has $4.4B in cash, so if you take goodwill+assets=market cap then Apple has ~$700M+ in goodwill. Not a lot for a company of this size. Of course, I recall that more than a few telecom companies had a market cap BELOW their cash on hand the last couple years.
 
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