Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple To Buy Vivendi's Music Division For $6 Billion
- Thread starter AlejandroGonzo
- Start date
- Sort by reaction score
It was on MacMinute.
Here's the Reuters link: http://biz.yahoo.com/rb/030411/media_universal_davis_3.html
From what I understand, if Apple decides to purchase Universal Music from Vivendi, then this guy would drop his bid on Vivendi's entertainment assets.
I don't see how this would hurt Apple, but it would most certainly f*ck over Vivendi. It would leave them with all of their not-so-profitable entertainment assets, minust the music division.
To keep from losing out on the $15 million, Vivendi may decide not to let Apple buy Universal Music (If Apple wants to.)
From what I understand, and from what was on the register ( www.theregister.com ), it was Vivendi who approached Apple, not the other way around.
This is very interesting.
And yes, Apple would do something good with Universal Music if they bought it, because if they don't, then they would've just paid 5-6 billion dollars for nothing.
Here's sort of a "round-up" article from the AP:
http://money.excite.com/ht/nw/bus/20030411/hle_bus-n11290881.html
Regards,
Gus
http://money.excite.com/ht/nw/bus/20030411/hle_bus-n11290881.html
Regards,
Gus
The more I think about this, maybe this is what Apple needs to do to survive. Microslop has diversified by buying tons of businesses and getting their fingers in every pie. If Windows disappeared tomorrow they would still be a large, profitable company. Apple is never going to win the OS wars, but if they can diversify their business holdings, they won't be on such shaky ground everytime processor development has a hiccup.
worst case?
What if Apple wastes most of its cash on UMG, can't make anything profitable of it, loses money from UMG for a prolonged period in addition to interest on the loan, and is eventually forced to give up, sell UMG for far less than they paid, and be left with nothing to show for it but bad press and a mere fraction of their current cash reserves.
That sounds like a worst case to me. Terrible news for Apple stock holders, and a dent in Mac marketshare among those who perpetually fear the OS is close to death.
But it wouldn't stop or reduce Apple's ability to keep making great, innovative Macs and software. At the end of the ordeal, an Apple worth far less than now will not mean Mac OS X is dead or Macs will stop being made and improved.
So, as a Mac PLATFORM fan--NOT a stockholder--I find the idea of such a risk a little scary (financial troubles can snowball), but not utter and final disaster.
I can't help thinking of Amiga, which was run into the ground by utter incompetence, had a TINY marketshare and tinier mindshare (unlike Apple), and didn't make much splash in the US. That OS still survives, even with new versions from time to time. Compared to that, Mac OS has such massive momentum and user loyalty that even if Apple DID go under, the platform won't.
I still don't WANT a worst case of course! I hope Apple doesn't do it unless it's a good idea, and I don't expect anybody will know for a long time whether they were right. Sometimes a risk pays off--that's what risk is.
If Apple doesn't or can't buy UMG, or if it's a total false rumor, at least this is bound to draw LOTS of attention to any OTHER music announcements--like new iPods or a download service. Those things will make a bigger impact on the press and public due to the UMG speculation. Not bad!
(I still maintain that the LA Times is simply a typo: the article date April 11 should have been April 1!)
What if Apple wastes most of its cash on UMG, can't make anything profitable of it, loses money from UMG for a prolonged period in addition to interest on the loan, and is eventually forced to give up, sell UMG for far less than they paid, and be left with nothing to show for it but bad press and a mere fraction of their current cash reserves.
That sounds like a worst case to me. Terrible news for Apple stock holders, and a dent in Mac marketshare among those who perpetually fear the OS is close to death.
But it wouldn't stop or reduce Apple's ability to keep making great, innovative Macs and software. At the end of the ordeal, an Apple worth far less than now will not mean Mac OS X is dead or Macs will stop being made and improved.
So, as a Mac PLATFORM fan--NOT a stockholder--I find the idea of such a risk a little scary (financial troubles can snowball), but not utter and final disaster.
I can't help thinking of Amiga, which was run into the ground by utter incompetence, had a TINY marketshare and tinier mindshare (unlike Apple), and didn't make much splash in the US. That OS still survives, even with new versions from time to time. Compared to that, Mac OS has such massive momentum and user loyalty that even if Apple DID go under, the platform won't.
I still don't WANT a worst case of course! I hope Apple doesn't do it unless it's a good idea, and I don't expect anybody will know for a long time whether they were right. Sometimes a risk pays off--that's what risk is.
If Apple doesn't or can't buy UMG, or if it's a total false rumor, at least this is bound to draw LOTS of attention to any OTHER music announcements--like new iPods or a download service. Those things will make a bigger impact on the press and public due to the UMG speculation. Not bad!
(I still maintain that the LA Times is simply a typo: the article date April 11 should have been April 1!)
Actually, that's not how it went.
Steve Jobs named their company Apple Computer.
The Beatles said "Hey you can't do that,... Apple is our name"
Steve: "Hey, we do computers, you record music"
The Beatles: "Well, OK,... you can use the name as a computer company but you can never put anything into the computer that would allow the recording of any kind.
Steve: "Sure, no problem."
Later on, however, Steve DID put a mic in the computer and as a gig, named one of the system alerts "So-Su-mi" (So, sue me), almost daring the Beatles to actually bring them to court.
They never actually went to court.
Also, "Apple" is not as generic as you think... don't think so...? Then start up a reasonable-sized business and name it Apple and see how fast you get shut down.
Yep, if not for the home run he hit with the iMac, Apple would already be but a memory. It's surprising Apple has lasted this long, considering the missteps.
To me, this deal smacks of Jobs reaching for another home run to save Apple from oblivion.
Maybe Apple isn't going to use the 970 at all... maybe the motherboards are fake... maybe they're going out of the computer business.
This is all just a little too nuts. I don't think it will happen. To invest ALL your savings at once is insane. Steve may be a little weird, but he's not a total moron.
The problem with the AOLTimeWarner merger was that the companies were too big to merger properly. Apple is a relativily small company and Universal music is not the biggest music label in the world (although it may be the biggest in the US), Sony is far bigger, they own the beatles and Michael Jackson.
Maybe Apple can use the profits from Universal to enable them sell Macs cheaper, thus increasing market share. This would be a bit like what M$ is doing, where they use the money from windows/office to find the multibillion dollar loss making xbox and MSN devisions.
Maybe Apple can use the profits from Universal to enable them sell Macs cheaper, thus increasing market share. This would be a bit like what M$ is doing, where they use the money from windows/office to find the multibillion dollar loss making xbox and MSN devisions.
Just want to add a couple of points to the discussion:
1. Apple will not buy Universal with all their "savings" or "cash". Certainly there will be a cash payout involved in the deal but it will predominantly be a debt/equity purchase. This brings up other points like the dilution of shareholdings and increased debt on the balance sheet, but this could generate huge cashflow for the combined company (especially with a successful launch of a new digital music service) and be seen very favorably by the markets outweighing these two factors.
2. As much as everyone talks about how record companies are going to die out and Kazaa, limewire, gnutella and the rest are going to destroy the music industry, what everyone keeps forgetting is there has to be a recording industry to produce music that you can pirate. While a successful business model for the distribution of digital music content has not yet been established, that is not to say that there isn't the possibility. I, for one, think that digital music distribution is going to be a huge success as a supplement to CD's.
1. Apple will not buy Universal with all their "savings" or "cash". Certainly there will be a cash payout involved in the deal but it will predominantly be a debt/equity purchase. This brings up other points like the dilution of shareholdings and increased debt on the balance sheet, but this could generate huge cashflow for the combined company (especially with a successful launch of a new digital music service) and be seen very favorably by the markets outweighing these two factors.
2. As much as everyone talks about how record companies are going to die out and Kazaa, limewire, gnutella and the rest are going to destroy the music industry, what everyone keeps forgetting is there has to be a recording industry to produce music that you can pirate. While a successful business model for the distribution of digital music content has not yet been established, that is not to say that there isn't the possibility. I, for one, think that digital music distribution is going to be a huge success as a supplement to CD's.
some links of interest on Sosumi
http://www.baresquare.com/team/879.html
( trivial amount of info on the "Sosumi" incident....)
http://www.redherring.com/mag/issue42/chum.html
(from 1997. who knew?)
http://www.landsnail.com/apple/1990s3.htm
(links to books on other stories.)
http://www.baresquare.com/team/879.html
( trivial amount of info on the "Sosumi" incident....)
http://www.redherring.com/mag/issue42/chum.html
(from 1997. who knew?)
http://www.landsnail.com/apple/1990s3.htm
(links to books on other stories.)
Apparantly there are other bidders for the non-music portion of Vivendi's entertainment business. Liberty Media Group is apparantly interested in a few properties, but not the music group. Vivendi may be able to get more by selling pieces of the business separately. Besides, Vivendi is only looking to eliminate $7 billion in debt and this sale would get them most of the way there.
So maybe it was IBM who hired the one that shot Snoop Dogg!
http://www.cnn.com/2003/SHOWBIZ/Music/04/11/snoop.dogg.ap/index.html
SOSUMI
I thought sosumi had to do with Carl Sagan (the astronomer who wrote the book Contact). They codenamed a machine in the early 90s "Carl Sagan". When Carl heard, he sued them, so they changed the codename to "BHA" or butt-head astronomer. They were looking for a name for a sound in their new OS - sosumi seemed perfect.
On the money
Jobs has a pretty good record for timing and being ahead of the pack. His timing is perfect as the music biz is cheap to buy since execs and analysts measure their biz in cd sales, and those have been declining as the music biz's sclerotic management can't fight their way out of the two pronged attack of digital use and traditional music licensing. They're in crisis, so it's a good time to attack.
And, as the rumors have it, Jobs seems to be ahead of the techonology pack for handling both online sales with the .mac music service and for consumer use with ipod.
I'd say it's a good move for the long term. People will always pay for music. And, if he sets this company up as an independent subsidiary, maybe Jobs has a way to sell music and computers profitably in the 21st century.
Jobs has a pretty good record for timing and being ahead of the pack. His timing is perfect as the music biz is cheap to buy since execs and analysts measure their biz in cd sales, and those have been declining as the music biz's sclerotic management can't fight their way out of the two pronged attack of digital use and traditional music licensing. They're in crisis, so it's a good time to attack.
And, as the rumors have it, Jobs seems to be ahead of the techonology pack for handling both online sales with the .mac music service and for consumer use with ipod.
I'd say it's a good move for the long term. People will always pay for music. And, if he sets this company up as an independent subsidiary, maybe Jobs has a way to sell music and computers profitably in the 21st century.
people this is a great thing, amazingly great
Listen, there are almost no downsides to this.
However they finance it they are spending $, and thats fine, they are buying a company with a lot of profits, and that is a good thing!
And that is assuming that they do nothing else with it.
Now lets look at some other things, it will help clear the way for the apple music download service, no problems on liscencing music from Universal then. Solid!
then expanded use of iPods, lots of deals, buy an iPod get 50 free song dl's or whatever, so lots of promotional material, also a bonus, for apple hardware.
And they get to do this with basically no cost!
Now take it further folks, think it out....if apple can also make deals with other labels for distribution, then they are also making money on their competition too, a big bonus.
and further, bands dont necessarily need to be signed anymore, a band can just set up an account there, and upload their stuff, creating a market for smaller bands, or anyone.
Ok then there are other players out there too, build a set of standards and allow them to liscence their way in too.
Music and macs go together, I know a LOT of pro musicians, major label ones (although mainly in Canada) and I only know one who uses a PC, and thats because he got it free, its a 486, and he only uses it for email. I know 2 people (one of whom i am sure you've herad play but dont know the name) with pro home studios, built around, macs of course.
Some people mentioned ways to hook iPods into a home theatre, a good thing, and i wouldnt doubt that we mght see something like that coming too, with ethernet and firewire, on screen iTunes access, things like that, but also build in ordering from that too.
People, this is not only a good thing, it is a great thing....with almost no downsides, it wont hurt apple, it gives them more revenue. A big profitable company producing products that they want to use and distribute becoming part of them or a subsidiary is great. Also factor in the cost savings that they arent paying for each piece of music Dl'ed.
this is win/win, no 2 ways about it, go apple, and get it done!
Aaron
Listen, there are almost no downsides to this.
However they finance it they are spending $, and thats fine, they are buying a company with a lot of profits, and that is a good thing!
And that is assuming that they do nothing else with it.
Now lets look at some other things, it will help clear the way for the apple music download service, no problems on liscencing music from Universal then. Solid!
then expanded use of iPods, lots of deals, buy an iPod get 50 free song dl's or whatever, so lots of promotional material, also a bonus, for apple hardware.
And they get to do this with basically no cost!
Now take it further folks, think it out....if apple can also make deals with other labels for distribution, then they are also making money on their competition too, a big bonus.
and further, bands dont necessarily need to be signed anymore, a band can just set up an account there, and upload their stuff, creating a market for smaller bands, or anyone.
Ok then there are other players out there too, build a set of standards and allow them to liscence their way in too.
Music and macs go together, I know a LOT of pro musicians, major label ones (although mainly in Canada) and I only know one who uses a PC, and thats because he got it free, its a 486, and he only uses it for email. I know 2 people (one of whom i am sure you've herad play but dont know the name) with pro home studios, built around, macs of course.
Some people mentioned ways to hook iPods into a home theatre, a good thing, and i wouldnt doubt that we mght see something like that coming too, with ethernet and firewire, on screen iTunes access, things like that, but also build in ordering from that too.
People, this is not only a good thing, it is a great thing....with almost no downsides, it wont hurt apple, it gives them more revenue. A big profitable company producing products that they want to use and distribute becoming part of them or a subsidiary is great. Also factor in the cost savings that they arent paying for each piece of music Dl'ed.
this is win/win, no 2 ways about it, go apple, and get it done!
Aaron
Sounds brilliant if you ask me...
Sure it's a risk. But it would be more of a risk if Apple bough UMG during a boom economy.
Is it a risk?
This venture may seem risky considering Apple's market share in the computer industry (who know if Apple may need that reserve to deal with the sluggish economy?), but wouldn't it be more risky to see Apple watch as the rest of the world becomes Windowized without much reason for people to want to buy Apple?
Apple could sit on their asses and wait until people "got a clue" and decided to switch, but most people probably aren't doing that as much as we'd all probably want. Why? It would seem that there is really no glaring incentive for non-Apple people to want to switch to Apple.
Our current market:
Sure we've got several major high-profile industries dependent on Apple, but for average Joe consumer, the real issue is whether having an Apple computer is going to simplify or complicate their life? And most people whom have worked the 9-to-5 probably don't want to think too hard. They probably do not understand Apple, have never tried Apple products, don't want to buy a more expensive product when they can get an emachine for $700.00 and like I said they simply don't want the headache of wondering if their applications will be compatible.
All of these are reasons why they probably don't have a giant influx of PC users buying Apple.
So I'm thinking that the problem is: Apple needs to be able to provide something that PCs can not.
And why not music?
Sure the music industry is probably hurting from Kazaa etc. but that also assumes that Kazaa will remain a sore in the music industry's side. If Apple could sell the music direct at a very high quality for a very decent rate ($0.25 to $0.50 a piece) than how much better would Apple be especially if the music is sold for a better price to Apple users than PC users? So, maybe Apple is not just looking to follow the Sony model, but to also supplant Kazaa.
And, who ever said that we'd still have music from UMG sold on CD's? Yep. I think a lot of people are assuming that CDs will still be sold by UMG. But what if they aren't sold? What if all songs from your hottest artists are only sold direct? Well, gee, yes UMG would be making less money per album (or would it?) but it wouldn't have to pay manufacturing costs, distribution costs, and the initial marketing costs for the CDs. After the album is created, how many middle men will be removed from the distribution channel? Well, gee, just about all of them.
So, UMG decides to not sell CDs anymore, to develop an email list of subscribers who are dying to download the newest and best stuff hot off the recording studio.
But, wait, what about all the ripping abilities that we have with iTunes? Well, why not rip some other music industry giants' stuff? There's no need to ever rip a UMG label again since you can now have them downloaded for nearly free.
So, the UMG model no longer needs to be considered one of the "losers" of the DCM. Only its competitors. And that means erosion of the competitors' revenues.
Sure, there are plenty of CDs that UMG has right now out and about for its entire libraries. But then again, if they were really in demand, wouldn't they already be sold?
Anyway, those are my $0.02. Hope I didn't insult anyone with these ideas. I believe that Apple is doing a great job answering that one nagging question posed by John Q Public: Why should I buy an Apple instead of a PC?
Well, if you want to have a more simple life, the answer is obvious. M$ did a number on Apple by holding the hot new versions of Office for ranson with later release dates, thus surpressing the Apple market. In a way, I would think that returning the favor may be in order. PC users may not like it. But oh, wel...
Sure it's a risk. But it would be more of a risk if Apple bough UMG during a boom economy.
Is it a risk?
This venture may seem risky considering Apple's market share in the computer industry (who know if Apple may need that reserve to deal with the sluggish economy?), but wouldn't it be more risky to see Apple watch as the rest of the world becomes Windowized without much reason for people to want to buy Apple?
Apple could sit on their asses and wait until people "got a clue" and decided to switch, but most people probably aren't doing that as much as we'd all probably want. Why? It would seem that there is really no glaring incentive for non-Apple people to want to switch to Apple.
Our current market:
Sure we've got several major high-profile industries dependent on Apple, but for average Joe consumer, the real issue is whether having an Apple computer is going to simplify or complicate their life? And most people whom have worked the 9-to-5 probably don't want to think too hard. They probably do not understand Apple, have never tried Apple products, don't want to buy a more expensive product when they can get an emachine for $700.00 and like I said they simply don't want the headache of wondering if their applications will be compatible.
All of these are reasons why they probably don't have a giant influx of PC users buying Apple.
So I'm thinking that the problem is: Apple needs to be able to provide something that PCs can not.
And why not music?
Sure the music industry is probably hurting from Kazaa etc. but that also assumes that Kazaa will remain a sore in the music industry's side. If Apple could sell the music direct at a very high quality for a very decent rate ($0.25 to $0.50 a piece) than how much better would Apple be especially if the music is sold for a better price to Apple users than PC users? So, maybe Apple is not just looking to follow the Sony model, but to also supplant Kazaa.
And, who ever said that we'd still have music from UMG sold on CD's? Yep. I think a lot of people are assuming that CDs will still be sold by UMG. But what if they aren't sold? What if all songs from your hottest artists are only sold direct? Well, gee, yes UMG would be making less money per album (or would it?) but it wouldn't have to pay manufacturing costs, distribution costs, and the initial marketing costs for the CDs. After the album is created, how many middle men will be removed from the distribution channel? Well, gee, just about all of them.
So, UMG decides to not sell CDs anymore, to develop an email list of subscribers who are dying to download the newest and best stuff hot off the recording studio.
But, wait, what about all the ripping abilities that we have with iTunes? Well, why not rip some other music industry giants' stuff? There's no need to ever rip a UMG label again since you can now have them downloaded for nearly free.
So, the UMG model no longer needs to be considered one of the "losers" of the DCM. Only its competitors. And that means erosion of the competitors' revenues.
Sure, there are plenty of CDs that UMG has right now out and about for its entire libraries. But then again, if they were really in demand, wouldn't they already be sold?
Anyway, those are my $0.02. Hope I didn't insult anyone with these ideas. I believe that Apple is doing a great job answering that one nagging question posed by John Q Public: Why should I buy an Apple instead of a PC?
Well, if you want to have a more simple life, the answer is obvious. M$ did a number on Apple by holding the hot new versions of Office for ranson with later release dates, thus surpressing the Apple market. In a way, I would think that returning the favor may be in order. PC users may not like it. But oh, wel...
PEOPLE, PEOPLE!!!
All of these theories are excellent, but when has Apple let us down when something related has been circulating on the rumor mill? Everyone thought there would be new iPods for MacWorld SF 03, and everyone was complaining: "if that's all it is, it's going to suck, and blah blah blah". But seriously, Steve Jobs may be a bit cocky (no offense) but he's certainly not stupid enough not to anticipate possible failure of a 6-Frickin-Billion Dollar investment. So, I shall say what has been said a million times, but:
COME ON!!!
All of these theories are excellent, but when has Apple let us down when something related has been circulating on the rumor mill? Everyone thought there would be new iPods for MacWorld SF 03, and everyone was complaining: "if that's all it is, it's going to suck, and blah blah blah". But seriously, Steve Jobs may be a bit cocky (no offense) but he's certainly not stupid enough not to anticipate possible failure of a 6-Frickin-Billion Dollar investment. So, I shall say what has been said a million times, but:
COME ON!!!
Maybe he'll use this as leverage, to make Universal own all.
Sosumi predated Carl Sagan (aka Power Mac 7100). The offense to Sagan was taken because the Power Mac 6100 was PDM (Piltdown Man) and the 8100 was Cold Fusion. Both were hoaxes. Sagan didn't like the association.
Exactly. Rid the place of parasites and you're set.
No, it's not. Sony doesn't integrate hardware and entertainment, Apple will.
Which is why he spends half his day there, negotiates the deals with Disney, and does the business side? He's not the creative person behind the movie, but he is the "businessman" of Pixar. Movie production is a negotiation-driven business. Jobs has 3733T neg0ti4ting sk1LLz.
The beginning explains it all. Steve Jobs is not a finance consultant, he's an innovative genius. Nothing wrong with your standpoint--people like you are needed in business--but that's not Steve's style of management.
Music has tremendous financial value. And it will be sold as a product. And there will be millions in it. And some of those millions will make music artists massively rich! In fact, it will do this much more if the theory of internet-distributed music holds true. Without the physical overhead for CD's, music will be almost pure profit. Servers cost money, but 50¢ a song will still turn profit. Even 25¢. This means artists stand to become even richer--good news for them. Apple as a record label and owner of Universal, stands to became massively wealthy. Of course, there's the qualifier of, "if this all works out". Let's hope it will.
Michael Jackson?!? So what... after seeing 2 of those TV specials (and seeing commercials for the other 2) I don't think he is going to be selling many more records
AMEN! Not to mention ALL of the on-line music money makers out there... oh wait, there aren't any. That's just a huge sum - however its financed. If Apple has some money burning a hole in its pocket, I must recommend $4 billion in shares of Microsoft if it gets them something close to a controlling vote. Plus $4 billion in MS shares may actually appreciate