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Zoom · Feb 7, 2007, 06:28 PM

As many of you probably saw, Steve-o posted a rather tidy writeup on the State of the Digital Music Union ("Thoughts on Music").

And also, Apple, Inc has now settled with Apple Corps, apparently once and for all.

I've always thought that iTunes Music Store is the model for the future - that is, digital downloads. Production and distribution of physical media (CD, DVD, etc) is so much more expensive than providing digital downloads. First you have to master the thing - that is, take the digital original (I'm sure it's all digital today) from tape or whatever and create the master physical disk. Then you mass produce it - you have plants that make the cases, the disks, the inserts, the packaging, the little theft-deterrent tags, etc. You then have to ship these things to all the stores, worldwide. Then you have to inventory, price, stock, shelve, and sell them - which requires people to drive to your store, during store hours only, find it (hopefully), buy it, and take it back home... and spend 10 minutes getting the stupid packaging off. And then, oops!, you scratch it.... or lose it or break it or have it stolen....

Compare all that time and energy to just process the digital master into a few different download formats on a server farm. The cost savings much be immense.

Today's music/video licensing and distribution model is outdated - everything we need for the next wave is here today. We have digital distribution and digital players. No need for any physical media, not even CD-Rs and DVD-Rs, really. "DVD players" and "CD players" are only needed because most of our media distribution still relies on the outmoded disk as a medium. If you could download movies and music easily today, without DRM, optical disk players would quickly be replaced by hard drive-based, networked players with USB ports for transferring files using pen drives. We're already making that transition today.

Next point: Apple is leading the charge into this new era. They have all the technology and distribution mechanisms in place today.

And finally... now that they've settled with Apple Corps, why not just merge? I firmly believe that the future of music (and maybe video to an extent, given the popularity of YouTube) will return to grass-roots, "indie" players - individuals, even. Technology to master high-quality digital music and video is well within the means of the average person today. Big studios are no longer required. Distributors are no longer required. Even promotion is no longer required, in the internet age - look at "viral videos" and such.

Apple should just step up and become an indie "label" - help artists produce, promote and sell their music and videos. Bypass the big four RIAA labels and the MPAA. They could merge with Apple Corps and immediately gain their expertise. Video? Bring in Pixar!

It makes too much sense to me. Okay, sure, they may cause a backlash with the RIAA and MPAA, but they'll have to get over it. Apple is a juggernaut now. Well, okay... initially it could be hard because I'm sure the movie and music houses would suddenly end their licensing agreements... but I'll bet you anything that Steve has thought of this and would love to do it.

Zoom · Feb 7, 2007, 06:36 PM

Oh, and one more point. The artists would love it. Someone (Janis Ian?) did the analysis on this. They make so little per CD now - most of it goes to the RIAA companies and distributors. To make the same money on digital downloads would probably require 10-100x fewer sales. It would be nearly pure profit. AllOfMP3.com sells music by the megabyte. Let's assume that that is the basic cost of managing the digital distribution and probably a little profit, so maybe $.20 per song (roughly). If the artist were to sell the track for $.50, they're making $.30 profit per download, or maybe $3 per "album" (another limiting concept that will cease to have meaning). That's well more than they make today, and they'd actually still own their rights. Plus, they still make money on gigs and whatnot.

Zoom · Feb 8, 2007, 10:33 AM

No takers, huh?

Nebagakid · Feb 8, 2007, 10:37 AM

so.... they would become their own label and alienate the big four, thereby ruining their relationship and the iTunes Store? If the individual is so important, then why is there a need for a label?

SirCastor · Feb 8, 2007, 10:41 AM

If Apple and Apple Inc. Merged, it would be a big PR issue. Which log gets carried where, what is the primary function, and who is really in charge in the end. The Beatles don't want to be known as part of Apple Inc., and Apple Doesn't want to become a subsidiary of the Beatles' record label.

Zoom · Feb 8, 2007, 10:54 AM

There isn't nearly as much need for a record label in this new model. But that's sorta what Apple would be doing with iTunes Music Store - hosting/distributing, promoting (banner ads, promo search results, etc), and managing the collection and disbursement of royalties. People are free to post songs on their own web sites for download, too - no outright need for Apple or any label - but it would increase your exposure, remove a lot of hassle, etc - what the labels are supposed to be doing today, just in a much simpler, cheaper and nearly-automated way.

Dakar² · Feb 8, 2007, 10:58 AM

Originally Posted by Zoom

No takers, huh?

Ok, the short version.

One is a British record company whose background deals with one of the greatest bands ever. Why dilute that?

Zoom · Feb 8, 2007, 10:58 AM

I would think that Apple Corps would probably cease to exist. Buying them would a) get the rights to the Beatles stuff and whatever else they own (and those could be sold off after a deal was made to carry the stuff on iTunes), b) get them music industry expertise and contacts, and c) basically be used as a PR/marketing ploy to launch Apple into the "record label" business.

Zoom · Feb 8, 2007, 11:04 AM

Originally Posted by Dakar²

Ok, the short version.

One is a British record company whose background deals with one of the greatest bands ever. Why dilute that?

You mean, what does Apple Corps gain from this? It's a good point, probably nothing. But are they doing anything at this point? I checked their web site... it's just a single picture and an email address. I'll have to read the Wikipedia entry in more detail, but it sorta looks like nothing's going on except managing the Beatles stuff. Hell, sell that part to Paul McCartney.

turtle777 · Feb 8, 2007, 11:11 AM

I think Apple should merge with Dole. I mean, both have nice fruit, right ? RIGHT ?

-t

Dakar² · Feb 8, 2007, 11:14 AM

Originally Posted by Zoom

You mean, what does Apple Corps gain from this? It's a good point, probably nothing.

Exactly.

Originally Posted by Zoom

But are they doing anything at this point? I checked their web site... it's just a single picture and an email address. I'll have to read the Wikipedia entry in more detail, but it sorta looks like nothing's going on except managing the Beatles stuff. Hell, sell that part to Paul McCartney.

Why should they?

Zoom · Feb 8, 2007, 11:26 AM

Originally Posted by Dakar²

Why should they?

Why shouldn't they? :-)

Until I read the Wikipedia article, I assumed that Apple Corps was a little more active. Apparently, at this point, it's just some lawyers and accountants.

But Steve "loves the Beatles", as do most of us. Can you think of a cooler partnership to kick off Apple's indie music label business? And a cooler property? Apple Corps is (oh, God, I can't believe I'm about to say this) ripe for plucking! I can see the Yellow Submarine-inspired iPod commercials now! And the special Beatles iPods, which would fly off the shelves.

Okay, I'm just getting sappy now, but seriously I think it would be very cool and I honestly don't see what Apple Corps has to lose. I think the benefits to Apple are obvious.

The downside, as I have already speculated and others have agreed, is that it would totally alienate the Big Four labels. That's a big negative and probably plenty of reason for this not to happen. However, if Apple bought Apple Corps, it would be a nice little ace Steve could hold in his pocket - and a not-so-veiled threat.

Still, even though it probably can't happen tomorrow, I think this basic concept is the future of the music business, and probably the movie business - it's just a matter of when it happens. And Apple is perfectly poised to do it.

Dakar² · Feb 8, 2007, 11:27 AM

Originally Posted by Zoom

Why shouldn't they? :-)

Because they gain nothing.

Zoom · Feb 8, 2007, 11:50 AM

Originally Posted by Dakar²

Because they gain nothing.

I'm assuming that it would be financially beneficial at the very least - like any buyout, the buyer has to make the offer worth taking. Probably the most action the company has seen in the last 20 years is suing Apple, and putting together a couple anthologies. And I would bet that a partnership with Apple would make for a nice boost in sales when the Beatles iPod is released with the full Beatles catalog pre-loaded.

It's not that hard to imagine ways in which Apple Corps would come out ahead.

Dakar² · Feb 8, 2007, 11:51 AM

Originally Posted by Zoom

I'm assuming that it would be financially beneficial at the very least - like any buyout, the buyer has to make the offer worth taking. Probably the most action the company has seen in the last 20 years is suing Apple, and putting together a couple anthologies. And I would bet that a partnership with Apple would make for a nice boost in sales when the Beatles iPod is released with the full Beatles catalog pre-loaded.

It's not that hard to imagine ways in which Apple Corps would come out ahead.

If I know the Beatles, and Apple by extension, it ain't about the money as much as it is the principle.

Zoom · Feb 8, 2007, 12:32 PM

Originally Posted by Dakar²

If I know the Beatles, and Apple by extension, it ain't about the money as much as it is the principle.

Dude, you're just being contrary. What's it about, then? Fame? Spreading their music? Any way you want to look at it, this would be a plus. If they want their music out there, for whatever reason, then this partnership would only help that.

And if it's not about money, then why would they bother to sue Apple all the damn time?

I hate to say it, but it's almost always about the money.

Dakar² · Feb 8, 2007, 12:37 PM

Originally Posted by Zoom

Dude, you're just being contrary. What's it about, then? Fame? Spreading their music? Any way you want to look at it, this would be a plus. If they want their music out there, for whatever reason, then this partnership would only help that.

And if it's not about money, then why would they bother to sue Apple all the damn time?

I hate to say it, but it's almost always about the money.

Image, name?

centerchannel68 · Feb 8, 2007, 12:42 PM

Originally Posted by Zoom

If you could download movies and music easily today, without DRM, optical disk players would quickly be replaced by hard drive-based, networked players with USB ports for transferring files using pen drives.

If???? Dude.... ever heard of bit torrent? I replaced my TV with an iMac, and I'm loving it.

centerchannel68 · Feb 8, 2007, 12:43 PM

Originally Posted by Zoom

Why shouldn't they? :-)

Until I read the Wikipedia article, I assumed that Apple Corps was a little more active. Apparently, at this point, it's just some lawyers and accountants.

But Steve "loves the Beatles", as do most of us. Can you think of a cooler partnership to kick off Apple's indie music label business? And a cooler property? Apple Corps is (oh, God, I can't believe I'm about to say this) ripe for plucking! I can see the Yellow Submarine-inspired iPod commercials now! And the special Beatles iPods, which would fly off the shelves.

Okay, I'm just getting sappy now, but seriously I think it would be very cool and I honestly don't see what Apple Corps has to lose. I think the benefits to Apple are obvious.

The downside, as I have already speculated and others have agreed, is that it would totally alienate the Big Four labels. That's a big negative and probably plenty of reason for this not to happen. However, if Apple bought Apple Corps, it would be a nice little ace Steve could hold in his pocket - and a not-so-veiled threat.

Still, even though it probably can't happen tomorrow, I think this basic concept is the future of the music business, and probably the movie business - it's just a matter of when it happens. And Apple is perfectly poised to do it.

I would SOOOO totally buy a yellow submarine themed iPod. That would be AWESOME.

Calimus · Feb 8, 2007, 12:53 PM

A single company building the hardware/software and owning the content is a terrible idea. Just look at the mess Sony has made for themselves. I see no advantage from them merging, and many disadvantages if they did. Apple makes computer and devices. If they start buying up random businesses then they lose their focus and dilute their name.

To me it kinda sounds like saying Apple should buy 7-11. After all, they could sell iTunes gift cards in the stores and have Apple contests on the Slurpee cups. But then there's the other 80% of the business that has nothing to do with what Apple does, same thing with signing/managing bands. Now if they were just buying the Beatles cataloge of music, then perhaps it MIGHT make sense, but still would be stretch.

Zoom · Feb 8, 2007, 01:51 PM

Originally Posted by centerchannel68

If???? Dude.... ever heard of bit torrent? I replaced my TV with an iMac, and I'm loving it.

Yeah, I do, too, but that's not mainstream yet - most people don't have the skill or the patience for that.

Zoom · Feb 8, 2007, 02:03 PM

Originally Posted by Calimus

A single company building the hardware/software and owning the content is a terrible idea. Just look at the mess Sony has made for themselves. I see no advantage from them merging, and many disadvantages if they did. Apple makes computer and devices. If they start buying up random businesses then they lose their focus and dilute their name.

Okay, you're extrapolating way too far - I'm suggesting nothing of the sort. And I didn't say they should buy up a bunch of companies, certainly not completely unrelated companies. I'm saying that they're already doing precisely what I'm suggesting, but they're hobbled by the RIAA and MPAA.

As for Sony, they're actually a very successful company even though they do all sorts of different things. But I don't want Apple to be another Sony. I want Apple to lead the way into a new era of music and video distribution and licensing. Sony has an inherent conflict of interest because they own the rights to the media and they make the players. Apple would just make the players and facilitate distribution of the media. Return the ownership, power and creativity to the artist - let them control it and make whatever they want, let them keep the rights and the most of the profits. They can sell however they want - iTMS, Yahoo, Akamai, or a web server running in their basement.

My argument is that in today's world of high-power PCs, cheap high-quality mastering applications, and the internet, you don't need the big-time RIAA/MPAA-style companies, and all the baggage that comes with them - and they know it, and so does Steve. No more of this "come in here, dear boy, have a cigar" crap.

And I should also mention that radio stations and TV stations will also be totally different, and Apple could be in that space, too - again, they really already are. iTMS has all of that right now. The only thing standing in the way is the outdated licensing and ridiculous perversion of copyright laws. But that's a different topic, let's not go there.

Doofy · Feb 8, 2007, 02:07 PM

Originally Posted by Zoom

everything we need for the next wave is here today.

Except the bandwidth for people who don't live in cities, you mean? What is it - something like 33% of people in the US are still on dial-up because they can't get broadband?

Doofy · Feb 8, 2007, 02:10 PM

Originally Posted by Zoom

cheap high-quality mastering applications

Don't forget the ridiculously expensive high quality mastering monitors to go with that. Or did you think your Apple Pro Speakers were OK?

Dakar² · Feb 8, 2007, 02:10 PM

Originally Posted by Doofy

Except the bandwidth for people who don't live in cities, you mean? What is it - something like 33% of people in the US are still on dial-up because they can't get broadband?

I don't know the numbers, but several people I know who are out in the boonies (and oddly a few who aren't) don't qualify for DSL.

Gossamer · Feb 8, 2007, 02:25 PM

Originally Posted by centerchannel68

Ever heard of bit torrent? I replaced my TV with an iMac, and I'm loving it.

Originally Posted by Zoom

Yeah, I do, too, but that's not mainstream yet - most people don't have the skill or the patience for that.

Plus there's the whole legality issue. I got an email from the admins here last year telling me to stop downloading The Office or NBC/Universal would file a suit with me. The year before a guy got busted for downloading music and had to pay ~$4000 in fines.

Originally Posted by Dakar²

I don't know the numbers, but several people I know who are out in the boonies don't qualify for DSL.

The ~2000 person town where I grew up didn't have access to DSL, so the telephone company laid their own fiber, and now they have a pretty awesome connection. I think it's $45/month for 256k.

Gossamer · Feb 8, 2007, 02:25 PM

Originally Posted by Dakar²

Image, name?

Originally Posted by centerchannel68

If???? Dude.... ever heard of bit torrent? I replaced my TV with an iMac, and I'm loving it.

Originally Posted by Zoom

Yeah, I do, too, but that's not mainstream yet - most people don't have the skill or the patience for that.

Originally Posted by Doofy

Don't forget the ridiculously expensive high quality mastering monitors to go with that. Or did you think your Apple Pro Speakers were OK?

multi-quote bug test

Dakar² · Feb 8, 2007, 02:26 PM

Originally Posted by Gossamer

I think it's $45/month for 256k.

That sounds... like a really bad deal.

Zoom · Feb 8, 2007, 02:27 PM

Okay, folks, work with me here. What percentage of people had record players in the 50s? What percentage had TVs? It wasn't 100%. And you don't need high-quality speaker monitors to make music. Or a high-quality video monitors to make movies. And in either case, you can get pretty damn good ones for hundreds of dollars. The costs are well within range of feasibility and the barrier of entry is way lower than it's ever been.

I can make music and movies at home right now with my Canon MiniDV camera, a decent mic, a Mac, iMovie and GarageBand - you could get all of that for under $1000, if you tried hard enough (refurb/used). Look at the guys who just did the Super Bowl Doritos commercial. Look at some of the Star Wars shorts made by fans on YouTube.

I'm not saying you could make Lord of the Rings at home or capture a symphony performance, but there's an awful lot you can do with just a few thousand dollars worth of equipment.

A new era is here, and Apple is perfectly poised to capitalize on it.

Doofy · Feb 8, 2007, 02:35 PM

Originally Posted by Zoom

And you don't need high-quality speaker monitors to make music.

Not if you haven't got high quality ears or don't expect to make any money selling that music, I guess.

Originally Posted by Zoom

I'm not saying you could make Lord of the Rings at home or capture a symphony performance, but there's an awful lot you can do with just a few thousand dollars worth of equipment.

Man, I couldn't even get a pro input channel for that much money.

Gossamer · Feb 8, 2007, 02:43 PM

Originally Posted by Dakar²

Image, name?

Originally Posted by centerchannel68

If???? Dude.... ever heard of bit torrent? I replaced my TV with an iMac, and I'm loving it.

Originally Posted by Zoom

Yeah, I do, too, but that's not mainstream yet - most people don't have the skill or the patience for that.

Originally Posted by Dakar²

That sounds... like a really bad deal.

It's either that or dialup for $25/month plus the cost of an extra phone line.

(multi-quote bug again, intentionally left in)

Dakar² · Feb 8, 2007, 02:44 PM

Dial-up $25? Damn.

Edit: I think if you check those quotes, you'll find the plus button stuck on on. Press it again to stop those quotes from continuing to appear.

Gossamer · Feb 8, 2007, 03:00 PM

You're right. Why do they stay stuck after I post?

Dakar² · Feb 8, 2007, 03:01 PM

Originally Posted by Gossamer

You're right. Why do they stay stuck after I post?

What have you been doing at your desk lately?

Gossamer · Feb 8, 2007, 05:11 PM

Originally Posted by Zoom

Yeah, I do, too, but that's not mainstream yet - most people don't have the skill or the patience for that.

Originally Posted by Dakar²

What have you been doing at your desk lately?

Applying chapstick.
But not besson-style

Dakar² · Feb 8, 2007, 05:12 PM

Is that what kids are calling it nowadays.

Silky Voice of The Gorn · Feb 8, 2007, 06:04 PM

Apple Corps is a very thin entity these days; basically it exists as an umbrella for Beatles merchandising and a faux-label for new recordings. If Apple Inc. was to snatch it up, it would be best leaving it alone; but it would make a nice prize for His Steveness.

Calimus · Feb 8, 2007, 06:48 PM

I totally agree that media can be made much easier by the home user, and that "home made" content will play a larger role in our entertainment. But what does that have to do with Apple buying a record label? They could publish home users content on iTunes with no need for a label or any resources they might get from buying one.

analogika · Feb 8, 2007, 09:15 PM

Yeah, I'm a little confused about what all this has to do with Apple Corps, as well.

That would be a PR move that Apple Corps has NOTHING to gain from, and iTunes being the first to distribute the Beatles catalog online would be PR enough for Apple, already.

Other than that, if Apple wanted to be a label, they would be one. It's ridiculously easy to found a label in most places - all you need is a piece of paper and a pen. Maybe a postage stamp. A lawyer, if you want to get really serious. Apple has plenty of those.

Zoom · Feb 8, 2007, 10:23 PM

I will certainly concede that Apple doesn't need to buy Apple Corps to do what I'm suggesting, depending on the actual legal terms of their most recent settlement. I guess I was thinking that Apple probably still couldn't act like a label - that's probably still one thing that Apple Corps would sue over.

But let's say they wouldn't, or that the legal agreement even allows them to (doubtful) - it would still just be very cool. Apple didn't need to have a U2 iPod or do the PRODUCT(RED) stuff, either. Lord knows they're selling plenty of iPods. But if they bought Apple Corps, that would be the final legal hurdle, and as a bonus you'd get the catalog, the rights to the big Granny Smith, all that...

Zoom · Feb 12, 2007, 01:20 PM

I didn't really want to morph this into a discussion on DRM and copyrights, but it's a very closely related topic and it's also a pet issue of mine. This guy has a long white paper on a new licensing scheme. I'll be honest, I haven't had time to read it all yet, but the summary of the current state of affairs is pretty good and germane to this thread. It's a little tough to get through, too - the guy's a lawyer, and his writing style shows it.