Yes. The key is the potential growth, the idea that you might only be gaining 50% of the revenue but you might get twice as many customers -- or many times more.
It's like how the Angry Birds folks sold their game for only 99 cents -- it sounds ridiculous at first, until you realize how many millions of copies it has sold and how much spinoff merchandizing it has created.
First, you have to be able to build the bridge from here to there. Taking a hit from now until the time that volume can make up for massive revenue hits (again, Steve wanted HALF of the ad revenue) is a long and painful bridge to cross for those not named Apple.
Second, while a nice example, Angry Birds is an extreme example. How many other Angry Birds stories are there? Or, how many other 99 cent games have been offered in the app store that flopped.
Third, Apple somewhat made it's own bed with their music industry cousins. The video people have witnesses Apple strong arming the music industry peers ever since Apple gained dominant hold on that industry. The video people want no part in allowing Apple to gain dominant muscle over them too. That's why this is not already done and why- year after year- we keep seeing information about Apple trying to make Netflix-like deals, "best of" subscription offering deals, etc. and it just can't get done.
If we buy into the "greedy Studios" mindset, wouldn't the greedy Studios want to do anything to maximize their profits... especially by selling their stuff directly to consumers (cutting out the cable/satt middlemen's cut)? Why wouldn't they be all over getting as deeply entrenched with Apple as possible? As is obvious even within this thread, we assume short sightedness, etc.
The key is for Apple to be able to show them a way to make more money with Apple's replacement solution. What is sounds like Apple keeps doing is illustrating how Apple is going to make a lot of money. Netflix has long been a competitor in this internet subscription model because they basically write the big checks to secure the content. What keeps coming out- in this story too- is Apple wants a big cut. What's always missing is how the Studios will make more money this year than last.
And then there's us consumers who think that somehow we will pay a lot less for the content we want. If Apple wins (big cut of revenue) and we win (big cut in what we pay), the only loser- and it would be a big loser- is the Studios. Now, why would they want to do that to make Apple richer (and potentially putting Apple in a position of great dominance over them)?
