Comment by lyime | Hacker News Reader

Comment by lyime | Hacker News Reader

This is really interesting.

A friend and I were discussing the other day. Apple just needs to buy all the 4 big music record labels. Perhaps other technology companies should just buy them up (Google/MS). The reasoning behind this is well, these companies have their own agenda and they simply don't get it. Record labels seem to be on this self distractive path built upon ego and short term thinking. They clearly are afraid to embrace the internet culture (see Amazon cloud player/licensing) and other innovative distribution channels.

Why do I think a tech company should buy these labels? I don't think the labels have a product mind set. What is the last innovative product apart from the CD that has come from labels. Even talking about the CD, there has been no incremental improvements in that technology over the last 10 year when it comes to music. They are simply not in the business of creating a product for the consumer.

Music is all about experience and great products can improve that experience and potentially open up more revenue streams.

Maybe this guy is on to something.

(ps - Passionate about this space. Working on a music startup @mugasha)

I probably know less about this than you but I'll try to paraphrase an earlier response here from a music industry veteran.

What I remember him saying was that the music industry is not the big four labels. The music industry is a multi-trillion dollar conglomeration of entities with the labels merely one part of a giant pipeline. It's not that the record labels "don't get it" but that they have to balance contractual obligations up-the-kazoo, between them and artists, between them and agencies, between them and other content consumers etc. They don't own music, they own the right to sell music in a certain way. Buy them and you won't suddenly gain the right to sell the music in a different way.

I mean, what are the economics of a one-mile pipe line where ten parties each control a tenth of a mile of pipeline. You might buy nine of the parties with the idea of getting free-flow but if the tenth party suddenly demands 10x as much, you can wind-up equally screwed. In a situation like this, if you want a pipeline with low overhead, you may find building a whole new pipeline is easier than buying the many interests controlling this existing one.

Apple doesn't need to buy the Big 4, they're quickly disrupting them. The Big 4 used to offer, publicity, promotion, and distribution--now iTunes does all of that. Record labels are dinosaurs who are unwilling or incapable of adapting to survive.

Apple is not competing with the record labels, so they can't disrupt them.

Labels are not going anywhere, artists need labels for various reasons. The function of labels is changing which is what is interesting. They labels are hesitant to change their model.

Apple is indirectly competing with record labels and the services they once provided--promotion, distribution (iTunes), publicity (Ping).

But you're right, Apple isn't trying to be a one stop shop like a record label, Apple is only going after a piece--that is what record labels should be adjusting to. Record labels should try to differentiate and offer whatever services Apple isn't--marketing, advertising, studio space, etc.

The Model T didn't compete with buggy-whip makers, but disrupted them all the same.

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