so says the LA Times today I guess.
Commentary from digital media analyst Phil Leigh:
1. Such a merger would DOUBLE the size of Apple's annual revenues.
2. Upon reflection, such a transaction is not really as surprising as it might otherwise seem. We believe that Apple Computer has been slowly evolving into a digital media company anyway. Their computers are focused on digital media applications. They have been enormously successful with the iPod portable MP3 players and even make versions that work with Windows-based PCs. Apple is rumored to be set to start and online music service of its own before the end of this month. Steve Jobs is reported to be the personal driving force behind the company's online music initiatives.
3. To our thinking the transaction would remove any shadow of doubt that Apple intends to become a pillar of digital media. The company is clearly attempting to evolve away from being merely a personal computer company. It does not want to be controlled by the same economic dynamics that govern the conventional business PC market.
4. Once Universal is under Apple's control, it could become a trend-setter for the other major labels in the movement to online distribution. For the past five years, CD music sales have been flat-to-down and are expected to decline again this year. Online distribution is is the wave of the future. Ultimately the transition is as certain as fleas on a yard dog. The only way to offset the declining revenues from CD sales is to adopt Internet distribution.
Universal is the biggest of the five majors and holds about a 30% market share. We believe it likely that an Apple-controlled Universal Music would offer more liberal consumer use rules to the online music services. Based upon it's historical record of innovation, we believe that Apple can be relied upon to deliver a service that is consumer friendly and reliable. To date, the labels' infant initiatives for Internet distribution at pressplay and MusicNet have been plagued with software bugs and complicated interfaces.
5. While we believe that an Apple-controlled Universal Music can be a trend-setter, it is not a certainty. For example, BMG was once the innovative leader. It loaned money to Napster when the P2P service had no music licenses. BMG invited the other labels to join them in a business proposal to convent Napster to a legitimate operation. BMG was given the cold shoulder and the men at BMG who sponsored the initiative, were forced out of the company.
However, today the situation is different. All the five major labels are increasingly recognizing that something has to be done on the Internet front aside from writing ever-larger checks to their lawyers. Sony has new management. AOL is reportedly trying to sell pieces of Warner Music. EMI is in perpetual crisis. In such an environment, as Andrew Jackson put it, "One man with courage makes a majority". Universal Music can be that "one man with courage."
Commentary from digital media analyst Phil Leigh:
1. Such a merger would DOUBLE the size of Apple's annual revenues.
2. Upon reflection, such a transaction is not really as surprising as it might otherwise seem. We believe that Apple Computer has been slowly evolving into a digital media company anyway. Their computers are focused on digital media applications. They have been enormously successful with the iPod portable MP3 players and even make versions that work with Windows-based PCs. Apple is rumored to be set to start and online music service of its own before the end of this month. Steve Jobs is reported to be the personal driving force behind the company's online music initiatives.
3. To our thinking the transaction would remove any shadow of doubt that Apple intends to become a pillar of digital media. The company is clearly attempting to evolve away from being merely a personal computer company. It does not want to be controlled by the same economic dynamics that govern the conventional business PC market.
4. Once Universal is under Apple's control, it could become a trend-setter for the other major labels in the movement to online distribution. For the past five years, CD music sales have been flat-to-down and are expected to decline again this year. Online distribution is is the wave of the future. Ultimately the transition is as certain as fleas on a yard dog. The only way to offset the declining revenues from CD sales is to adopt Internet distribution.
Universal is the biggest of the five majors and holds about a 30% market share. We believe it likely that an Apple-controlled Universal Music would offer more liberal consumer use rules to the online music services. Based upon it's historical record of innovation, we believe that Apple can be relied upon to deliver a service that is consumer friendly and reliable. To date, the labels' infant initiatives for Internet distribution at pressplay and MusicNet have been plagued with software bugs and complicated interfaces.
5. While we believe that an Apple-controlled Universal Music can be a trend-setter, it is not a certainty. For example, BMG was once the innovative leader. It loaned money to Napster when the P2P service had no music licenses. BMG invited the other labels to join them in a business proposal to convent Napster to a legitimate operation. BMG was given the cold shoulder and the men at BMG who sponsored the initiative, were forced out of the company.
However, today the situation is different. All the five major labels are increasingly recognizing that something has to be done on the Internet front aside from writing ever-larger checks to their lawyers. Sony has new management. AOL is reportedly trying to sell pieces of Warner Music. EMI is in perpetual crisis. In such an environment, as Andrew Jackson put it, "One man with courage makes a majority". Universal Music can be that "one man with courage."
