Apple paying music labels $100M-$150M for iCloud
venturebeat.com
venturebeat.com
Labels want two things: that their current business model keeps working, and that a new physical format completely incompatible with old ones comes along so users have to buy their whole collection again, as happened with DVDs.
From this, you may think majors are retarded.
They are.
Wait, what? Different than Google Music?
> The Cupertino, Calif., tech giant has agreed to pay the labels between $25 million to $50 million each, as an incentive to get on board, depending on how many tracks consumers are storing.
sounds like what Apple is launching is also a music locker service akin to what Google Music is now, and not streaming arbitrary music. Perhaps the author is referring to when Google may remove the invite-only aspect for their service, or maybe just confused.
We will have to wait until Google opens the doors to everyone and how much – if anything – it will cost you.
It would be seriously cool if Google continued to offer this service for free. I suspect that they will offer the service with a generous limit for free after they are out of beta (I would imagine at least 2,500 songs – that would be roughly on par with Amazon’s free 20 GB) but I also suspect that they will start charging for the service if you want to upload more. We will have to wait and see.
I want to actually own my music. Have the file RIGHT THERE on my computer, so I can do whatever I want with it - whenever I want to.
Why do I need to have my songs up in the cloud? What about when I'm on holiday - and typically disconnect from the world for a week sans internet - how am I supposed to listen to my music then?
It's just ridiculous.
$150 million seems nothing these days (maybe I'm just tainted by the Skype-Microsoft acquisition...)
[Edit] This was a joke! Jeez.
Buying multiple content companies would be right out.
People don't buy Apple stuff because of what it is -- the identical hardware can be bought for sometimes 50% cheaper from other stores/manufacturers. People buy because of the perception that Apple has values which are aligned with their own.
The most visible value is that Apple challenges the state of normalcy in whatever industry they enter, that they oppose the status quo. This is a perception, it doesn't necessarily align with the reality of their actions (for example, how is it opposing the status quo to pay the labels' extortion fees?)
You don't have to agree with it -- that is, you don't have to believe that Apple actually challenges anything -- but you should at least understand how they sell themselves and how that drives their business. If you simply examine Apple on the basis of the products they sell, you can't develop a consistent theory that explains their success (IMHO).
Look at the commercial for the Playbook, it focuses on what the actual hardware/OS can do: run multiple apps at the same time, browse with Flash, etc. At the same time, the iPad commercial focuses on how amazed you'll be, and how much potential it has to change the future. It's audacious -- could you imagine how ridiculous it would sound if RIM billed the Playbook as "just getting started"? That's not RIM, they're not visionaries and they've never sold themselves as such. They sell themselves as people who sell enterprise solutions -- i.e., they identify themselves with what they make.
You have to consider that Apple primarily sells a belief, and secondarily sells products which demonstrate that they implement those beliefs.
I would modify your initial statement -- companies fail when they are reduced to selling commodities, instead of following their values. Dell and HP sell commodities, but Apple takes that same hardware (laptops, desktops, MP3 players, tablets) and turns it into gold, because they sell users the perception of following their values.
(If you liked the foregoing analysis, it's largely influenced by the writings of Simon Sinek in Start With Why: How Great Leaders Inspire Everyone To Take Action http://www.amazon.com/Start-Why-Leaders-Inspire-Everyone/dp/...)
Another reason is that the largest label (UMG) is a wholly owned subsidiary of Vivendi. There may be a parallel universe where Apple could finance a takeover of Vivendi, but that would leave Apple responsible for the P&L of television networks, film studios, World Wrestling Entertainment, Activision/Blizzard, and several phone companies.
A final, obvious reason why Apple doesn't buy all the major labels is that it's a dumb bet. Of all possible suitors for any major label, what company would see a music label as less valuable than Apple?
This advance is utterly insignificant compared to the size of their pile of cash.