[Info-vax] OT: About Digital and divisions

[John Wallace]

On Nov 19, 4:51 pm, JF Mezei <jfmezei.spam... at vaxination.ca> wrote:
> Neil Rieck wrote:
>
> > Here's my two cents about comparing Apple to Sony. Sony was only
> > selling players. Apple was selling players and content.
>
> Wrong. At the time Apple launched iTunes Store (a year or two after
> launching iPods), Sony already had all of what was needed to do the
> same, yet they failed royally. They did have a "store" for games etc but
> their own music division wouldn't allow that store to sell music to
> Sony's new MP3 players.
>
> Jobs played on the fact that Apple only had 5% of the market and
> couldn't possibly hurt the music and pitched his project more as a pilot
> where record companies could gauge the impact. Once this proved to be
> wildly succesfull, they deployed the Windows version of Itunes and sales
>  not only went through the roof, they went orbital.
>
> Remember how in the 1980s, Digital had all the ingredients and brought
> it as a single solution from hardware to applications and support ? All
> that fell apart when Palmer took over and divided Digital and sold off
> so many applications.
>
> It is very interesting because I have alwasy believed that Sony was the
> one company who understood "convergence". Yet, they have never been able
> to leverage this very well (but this may be coming now).
>
> Yes, Jobs was "different". But during his second coming at Apple, he
> seemed far more mature and normal.
>
> What this does show is that the job of CEO is far more than that of an
> administrator. It is really necessary for the CEO to either have vision
> for the company (as in the case of Apple) or be able to delegate this in
> the case of conglomerates like GE that have wildly separate enterprises.
>
> > Now there are many people out there (including me) that think Apple
> > would have not been able to create iTunes had not Jordan Mendelson and
> > Sean Parker destroyed the music business with Napster.
>
> That is probably correct although I think that Napster scared the
> bejesus out of the music industry instead of destroying it. Jobs says
> that the music industry had tried to come up with a standard DRM but
> couldn't even get that to work.  Apple stepped it with its own and got
> lucky because it was the first to really integrate everything from music
> sales to the devices.

I suspect that as well as an industry standard DRM, the iTunes
business model also offered the record industry a big enough cut to
keep them interested. The details used to be on Tom Robinson's web
site when he offered free download of his back catalogue. He is now on
iTunes and the details of who gets what have gone, but this is what
they used to be:

    iTunes downloads cost 79p per track. Writer/publisher get 6p,
Performer 6-8p, Visa/Mastercard 7p, Apple 12p, and Record Company
almost 50p. Sod that. Help yourself to my songs & share them with your
friends (continues)

(originally copied from http://tomrobinson.com/records/music/index.htm
)

Tom also wrote an article for the UK newspaper The Guardian featuring
the revenue split for iTunes download singles:
http://www.guardian.co.uk/commentisfree/2007/mar/03/comment.musicnews
and there's a similar breakdown for download albums in another one of
Tom's articles (last but one paragraph):
http://www.guardian.co.uk/commentisfree/2006/jun/12/post149

So the record company get roughly two thirds of the revenue and the
artist and the writer each get about a tenth of that. The Church of
Jobs gets as much as the artist and writer together.

What record company would turn that down with the Church of Jobs
acting as salesforce?

Well, some did, including Apple Records, but then there's history
between those two Apples... or maybe it was the big Apple artists that
turned it down (given the size of the writer and performer cut, who
could blame them).