Apple and Steve Jobs were badly beaten up by the music industry and Hollywood when they first introduced macs with writable CDs. Instead of focussing on writable CDs they missed the bigger picture of how music actually got distributed. The number of CD players around the world, determined how music actually got distributed. It becmae evident that it would be impossible to protect music being distributed through this legacy channel. Another trend over the last 3-4 years has seen the music industry with revenues eroding 7-10% per year mainly due to file sharing and piracy made more conducive with the internet. Steve believes the only way out is the implementation of new business models which enable easy downloading of music, with any song at any time type of concept. The existing publishers are frozen to death because they worry cannibalization of their existing business, which seems to be more inevitable with every passing day. The best way to move forward is to buy one these frozen ducks and unleash their potential in the form of new services, the world has never experienced before. Apple has always demonstrated innnovation in their products and the first mover in many areas, always setting trends but always commercially limited by their volume economics and channel reach. With a music service on the internet they will be able to reach all parts of the globe, there is no part of the world that does not listen to music. If this service becomes a must have by consumers, more people will upgrade to broadband, store more music on their PCs and leave home with a iPOD type device.
I am glad Apple is taking a punt on this business model. If it succeeds the music, telecom and PC industries should be happy and if it fails, what the heck the music world will be wiser. Many may think he is on his next maverick move ? Trying to make the music industry profitable and exciting again. Apple is soon introducing a service and those who have seen it, say its the best one around.
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