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macrumors bot
Original poster
Apr 12, 2001
58,695
22,321


MacDailyNews republishes an unsubstantiated rumor from Briefing.com that Disney could be interested in purchasing a stake in iTunes, which would then spin off into its own publicly traded company via an IPO.
"We are hearing some chatter this morning about Apple Computer (AAPL) that we can't confirm, but found interesting nonetheless. The rumor is that Disney (DIS) could buy a stake in AAPL's iTunes, which could then be a first step towards an iTunes IPO."
 

rdowns

macrumors Penryn
Jul 11, 2003
27,397
12,514
Seems like wild speculation. An iTunes spin off; what about the iPod? Were Apple to do that, their stock would take a severe beating.
 

stefman

macrumors regular
Jul 17, 2002
156
4
This could be Apple's way of licensing it's FairPlay technology and providing iTunes with some "external" revenue.

Apple would have to keep making the iPod the coolest player on the planet in order to maintain it's dominance.

I might be wrong, but there's no denying that one day Apple will have to open iTunes or the iPod...either voluntarily (better) or by force (worse). Market dominance like that doesn't go unnoticed too long.
 

samh004

macrumors 68020
Mar 1, 2004
2,222
140
Australia
Could they avoid being sued by certain parties in relation to the word Apple and music by making iTunes it's own entity ?

That's the first thing that popped into my head.
 

Little Endian

macrumors 6502a
Apr 9, 2003
687
42
Honolulu
It is much to soon for Apple to spin itunes off right now. In a couple of years or so it might be a great idea but right now itunes can do fine under Apple. Apple still needs complete control of itunes to maintain dominance in the MP3 player market at least for now it does.
 

CaptainHaddock

macrumors 6502
Jul 6, 2004
382
0
Nagoya, Japan
An IPO makes little sense. iTMS exists to sell iPods and provide a complete computing solution on the Mac. It doesn't exist to make money, and it would turn into just another failed music store on its own.
 

mdavey

macrumors 6502a
Nov 1, 2005
506
1
rdowns said:
Seems like wild speculation. An iTunes spin off; what about the iPod? Were Apple to do that, their stock would take a severe beating.

Not necessarily. Apple wouldn't have to transfer control of their existing iTunes music store or iTunes.app application to the spin-off company.

They could simply transfer the sourcecode to the app and the sourcecode to the iTunes service to the spin-off and then be the first licensee. Rights to the content in the Apple iTunes music store wouldn't transfer, either.

Think of it like Amazon.com. Barnes&Noble, Target, Virgin Media and many others are powered by Amazon.com E-commerce Platform. Eacho store has its own look and feel, and corporate branding but underneath it is a fork of the code from Amazon.com that the site is running upon.

And Apple would likely retain a majority stake in the spin-off, so would actually receive a revenue stream (in some form) from license sales of the iTunes platform.
 

mac-er

macrumors 65816
Apr 9, 2003
1,452
0
This has to be the wildest rumor I have ever heard.

iTunes its own company? That has to go against everything Apple is about.
If that was true, they might as well spin off the Mac division, the OS division, and the software division.
 

Norse Son

macrumors regular
Dec 13, 2005
118
0
Under Uncle Sam's Thumb
Little upside or revenue streams

Were Apple to spin off the iTMS it would pose challenges for any media company - music, video, TV shows, etc. - that wished to sell content through the service, especially if Disney were to own a stake (however large) in iTMS... They'd have to ask themselves, "What kind of preferential pricing & revenue is Disney making off our competitor-status product?"

Also, any media company, especially the major "greedy" music labels who invested in it could try to pressure iTMS & Apple to raise prices, tier the prices, limit the bit-rate, push for certain content to be subscriber-only, etc. And it would do nothing to move iTMS closer to being a "border-free", truly-global music & media bazaar.

The latter is where I believe iTMS is headed, where iTMS and, more importantly, its global customers, are no longer restricted to what's available in only their home countries. I see the day coming, maybe by next MWSF, where we can preview & purchase content from any of the various international iTMSs.

As it stands right now, Apple - and, if IPO'd, the iTMS - sees very little actual profit from iTMS' sales. Most of it goes to the record labels and/or movie/TV studios. Apple makes its money from iPod-related sales, not off the media itself.
 

mdavey

macrumors 6502a
Nov 1, 2005
506
1
mac-er said:
This has to be the wildest rumor I have ever heard.

iTunes its own company? That has to go against everything Apple is about.
If that was true, they might as well spin off the Mac division, the OS division, and the software division.

Norse Son said:
Were Apple to spin off the iTMS it would pose challenges for any media company - music, video, TV shows, etc. - that wished to sell content through the service, especially if Disney were to own a stake (however large) in iTMS...

Again, consider the possibility that Apple will just spin out the iTunes ecommerce platform (software to build a web store) rather than spin out the actual brand and their current instance of the store.

This "iTunes E-commerce Platform" subsidary will build branded web stores for retailers in just the same way that Amazon Services builds branded web stores for competitors to Amazon.com.

Just as Barnes & Noble still choose the Amazon E-commerce Platform even though they are competitors of Amazon.com (and Amazon Services sell a license to use even though Barnes & Noble are a competitor of Amazon.com), so will media companies likely choose to get the iTunes spin-off/subsidary to build their web store even though Apple and Disney are backers.

Norse Son said:
They'd have to ask themselves, "What kind of preferential pricing & revenue is Disney making off our competitor-status product?"

Disney wouldn't get preferential pricing - the store content would belong to "you". The iTunes spin-off would likely charge an installation/set-up fee, a customisation/consultancy fee and an on-going licensing fee (just like Amazon Services does) and presumably both Apple and Disney would see some kind of revenue stream as backers (whether that would be through share issues, dividends, licensing revenues or some other profit-sharing model).
 

Peace

Cancelled
Apr 1, 2005
19,546
4,555
Space The Only Frontier
This scenerio could happen if Apple should lose any lawsuit against the beatles..

It would be bad though.imho..
No more $.99 songs thats for sure..The RIAA would love to see this happen.I'm not sure how the app would go though..
 

bigandy

macrumors G3
Apr 30, 2004
8,852
0
Murka
some people hate slow news days around here so much that they spark this as a rumour?

dear oh dear.

:rolleyes: :rolleyes: :rolleyes: :rolleyes:
 

travvy49423

macrumors newbie
Apr 23, 2005
12
0
Michigan
The author should clarify...

I'm going to ask the question I know many others are wondering but affraid to ask for fear of looking stupid...

WHAT THE FRICK IS AN IPO?!?!?!

I'm pretty sure it's a basic journalistic convention to define an acronym the first time it's used in an article unless it's commonly used... like, for instance, FBI or USA.

Granted, I just googled the term and now know what it means, but a website geared toward general mac users shouldn't expect it's readers to know financial lingo.

That's my two cents.
 

eSnow

macrumors regular
Feb 23, 2004
164
0
I doubt Apple would spin-off iTunes (the software) as a company. Since they don't charge for the software, the company would have no revenue stream.

More likely, they are thinking about spinning off the iPod, iTunes and ITMS into a publicly traded company in which they still hold the majority. Cash in on the iPod success while it lasts and make a heap of money.
 

brentonbrenton

macrumors member
Oct 4, 2002
62
35
some ppl were worried about apple becoming a music company.

what do u people want?? now they rumor dividing it from their computers, and ppl are all, oh no.

i think this is perfect. apple isn't stupid, they'll maintain controlling reins. maybe an itunes record label will be next to come straight afterwards.
 

Psychic Shopper

macrumors member
Oct 12, 2003
76
0
Cleveland Ohio
Because they could

Why did Disney pay a riduclous amount of money for Pixar? i don't know, why did Pixar sell? They were smart enough to take the money ( or stocks as it were). Why would Apple sell Itunes to Disney? If Disney is stupid enough to buy a company Steve Jobs admitted doesn't make much money, then Apple is smart enough to sell itunes.
 
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