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Music Businesses Media Apple

Apple Plans to Purchase Universal Music 661

Posted by pudge from the ringo-might-be-displeased dept.
mrbiiggy writes "Apparently Apple has been plotting to purchase Universal Music for $6 billion, reports Spiegel Online (read the Google translation). Who knew Apple even had that kind of cash? (The L.A. Times is also reporting this, free reg required.)"
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Apple Plans to Purchase Universal Music More

Apple Plans to Purchase Universal Music

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  • What's your plan, big guy? (Score:5, Interesting)

    by salamander_sjv ( 619309 ) on Friday April 11, 2003 @08:47AM (#5709986)
    I've got a home server plugged into the stereo, with all my music available via iTunes. I use a Powerbook G4 as my main machine, and I'd like to get a 30GB iPod [thinksecret.com] to plug into my car stereo. This type of setup seems to be becoming increasingly common.

    I buy my music on CD, although I only grab them off the shelf when I want to check out the cover art and lyrics. I suppose I might start buying electronically, but unless the price drops to reflect the savings on manufacturing and distribution, I don't really see the point. I still like having a tangible object to associate with the artist's work. (so much so that whenever there's a sale on I end up buying albums I like that I ripped from friends)

    Steve must be pretty sure that he's got a killer reason if he's planning such a huge move. I suppose that killer reason could be big savings to the consumer, but somehow I doubt it. What else is he going to offer?

    • Re:What's your plan, big guy? (Score:5, Interesting)

      by James_Duncan8181 ( 588316 ) on Friday April 11, 2003 @08:52AM (#5710035) Homepage
      It offers Apple a guarentee of relevancy?

      It would mean that any DRM system that is worked out for music will have to consider the interests of Apple/Universal. This effectively avoids a MS lockout on music, which would obviously be very harmful to sales as the Mac is very media orientated.

      Otherwise you are right, there seems not that much of a natural fit between these companies.

    • Re:What's your plan, big guy? (Score:5, Interesting)

      by TheRaven64 ( 641858 ) on Friday April 11, 2003 @09:12AM (#5710181) Journal
      In the last year, I have bought a single CD. Okay, a 2CD set, but the principle's the same. Most of the time I listen to WCPE [wcpe.org] Internet radio. They provide a very good service (including an Ogg Vorbis stream), and play good music, with very few interruptions. Radio, as a way of distributing music, has been around for a very long time, and the music industry doesn't seem to have a problem with it. I consider WCPE to provide a good service, and happily contribute to their costs (they're listener supported).

      The kind of service I would like, and which I would happily pay $10/month or so for goes one step furthur. I would like direct access to their catalogue, so I could stream or download any tracks I wanted when I wanted them. They could then log which tracks I download, and pay the artists concerned proportionally. I would be perfectly happy for the music to expire if I stopped paying for it. I would not be happy with some kind of analogue watermark that affects the quality of the sound.

      I would also rather that they used Ogg, instead of AAC (Apple's apparent choice) since then all the money would go to distribution and the artists, not to patent royalties.

      • We have Internet music distribution that emulates radio and we have Internet music distribution that emulates retail. It would make sense for the record companies to combine them both, based on the way that radio and offline retail have traditionally worked together. In this model, you listen to the radio, hear something you like, go to the store and buy it. The radio is free but you buy the CD to play whenever you want to. So what might work is for record companies to allow anyone to stream their music fre

    • I bit, clicked through the thinksecret article, and I don't buy it.

      An iPod dock, sure. I've wanted one for ages. But USB2? They won't abandon firewire, and they sure as hell won't ship two models, one for windows, one for MacOS. And standard play buttons, etc? Gimme a break - the point of the iPod is to be used one handed - there's zero point to one if it's designed that way, it goes from innovative design to bad design.

      I don't doubt the size upgrades or a dock option, but come on. The rest is hypothe

      • Won't ship 2 models? They do now (Score:5, Informative)

        by barzok ( 26681 ) on Friday April 11, 2003 @09:26AM (#5710269)
        Been to a retail outlet lately? I've seen iPod boxes labeled "for Windows PCs" separate from the regular ones.

        • Re:Won't ship 2 models? They do now (Score:4, Informative)

          by Triv ( 181010 ) on Friday April 11, 2003 @09:45AM (#5710409) Journal
          yes, but the units themselves are identical, the drives are just formatted differently. Apple wouldn't make two versions, one for USB2 and one for Firewire. Well, they MIGHT, but I doubt it.

          Triv

          • Re:Won't ship 2 models? They do now (Score:4, Insightful)

            by spectral ( 158121 ) on Friday April 11, 2003 @09:56AM (#5710494)
            Maybe they'll include both firewire and USB2 like some other companies [nomadworld.com] have done.

            Though, not too likely just because of the way the original iPod is designed and loved by people. Adding two ports might confuse people (which one do I plug it in to?), not sure if USB 2.0 sends enough power to charge the thing (meaning you'd still have to use the ac->firewire adapter, or be required to use the dock to charge it), etc.

            And the user interface changes are downright fucking stupid. Moving the buttons gains nothing and loses a lot. The article is therefore most likely BS.

            • Re:Won't ship 2 models? They do now (Score:5, Insightful)

              by thatguywhoiam ( 524290 ) on Friday April 11, 2003 @11:21AM (#5711189)
              Maybe they'll include both firewire and USB2 like some other companies [nomadworld.com] have done.

              As I understand it, Apple doesn't want to use USB2 for the following reasons:

              1) The plug is the same as USB1, which could cause confusion. Apple hates confusion. Also, having a single USB1 device on the chain will throttle down all devices to USB1 speeds.

              2) They invented FireWire, and think its technically better in every way (xfer speed, serial vs. bus, powered, etc.). I'm inclined to agree.

    • He's just emulating the huge success AOL had with it's acquisition of Time-Warner.

      (Actually, I suppose that was a success, given that AOL bought TW with stock that turned out to be worth a fraction of what folks thought...)

    • Re:What's your plan, big guy? (Score:5, Interesting)

      by macdaddy357 ( 582412 ) <macdaddy357@hotmail.com> on Friday April 11, 2003 @09:45AM (#5710415)
      If they successfully buy Universal Music, Apple could have them leave the RIAA, never produce another "copy protected" CD, stop harassing file traders, who are giving music free promotion, and most of all, sell music at a fair price, such as CDs for between five and nine dollars. Under Apple's leadership, Universal Music could be exempt from the consumer boycott of the recording industry. [dontbuycds.org] We can dream, can't we?

      • Re:What's your plan, big guy? (Score:5, Insightful)

        by gilesjuk ( 604902 ) <giles.jones@nospaM.zen.co.uk> on Friday April 11, 2003 @10:36AM (#5710839)
        Having a music company that understands the power of technology and how to use it for the benefit of consumers can only be a good thing.

        Will we see that? maybe some day.

    • Re:What's your plan, big guy? (Score:3, Funny)

      by Anonymous Coward
      I'll tell you what the reason is.

      If Apple owns Universal, then Apple will own DEATH ROW RECORDS! That means Sug Knight will be working for Steve Jobs. What a pair!

      Next time Micro$hit threatens to pull Office for Mac, or threatens not to provide Universal records artists in some proprietary format playable on windows computers, Stevie will send Sug over to Redmond to have a little "talk" with mr. gates.

      It's death row, nigga, you better axe somebody!

  • One working label? (Score:5, Funny)

    by Alcimedes ( 398213 ) on Friday April 11, 2003 @08:48AM (#5709993)
    Could this be a step towards one record lable that won't be total asses about copyright and ripping your songs to mp3 format?

    well, that or suddenly all Universal CD's will come out looking way better than every other CD on the market, but only have songs a few years old. ;)

    • Holy shit, it's not April 1! (Score:5, Insightful)

      by 0x0d0a ( 568518 ) on Friday April 11, 2003 @09:04AM (#5710119) Journal
      Could this be a step towards one record lable that won't be total asses about copyright and ripping your songs to mp3 format?

      From the *one* company that has a controls an entire consumer hardware platform? Hell, no. If this isn't a hoax somehow, it'd be a play toward building a media playback system that the media companies will go for. And one *hell* of a lucrative positioning, if it works.

      "Apple-compatible" audio. They have a portable player and the desktop already in place, and then they just need a home theater system. Apple is the sole company in the world that could build an entire *working* DRM system. MS doesn't have the hardware control.

      Damn, in retrospect, Jobs actually had a cohesive plan these last few years. Who woulda thunk?

    • Re:One working label? (Score:3, Insightful)

      by tmark ( 230091 )
      Maybe Apple will be happy when their whole catalog is up on Kazaa for download. Maybe.

      It's easy to take a liberal approach to the whole MP3 issue when the catalogs in question don't belong to you. It sure would be interesting to see how they behave when the ripping and mixing and burning affects properties they own, and not properties owned by someone else.

      But I have to wonder whether Apple really would do this in the first place. They're a computer company, scratching for a small piece of market share
      • Maybe Apple will be happy when their whole catalog is up on Kazaa for download. Maybe.

        Maybe Apple is already aware that Universal's entire back catalog, along with every other record co.'s, is out in the world in unencrypted red book format already (and thus on Kazaa). :)

    • Re:One working label? (Score:5, Interesting)

      by bsharitt ( 580506 ) <bridget@NoSpAM.sharitt.com> on Friday April 11, 2003 @09:48AM (#5710431) Journal
      At least we won't have to worry about copy protected cds that kill iMacs. Also, I though Apple could never be arecord company.

  • Payoff again? (Score:3, Funny)

    by dhovis ( 303725 ) on Friday April 11, 2003 @08:48AM (#5709996)

    So will Apple Computer have to pay off Apple Records again?

  • who knew apple had that kind of money? (Score:5, Informative)

    by IRNI ( 5906 ) <{ten.inri} {ta} {inri}> on Friday April 11, 2003 @08:49AM (#5709998) Homepage
    lots of people. remember when their stock took a hit a year or so ago and people were wondering what the fate of apple would be? then also remember that news came out they had over 12 billion in cash assets. yeah apple is a huge company. they may not have market share yet in the OS world but they are a very very large company. make no mistake.

  • Apple has cash, not all of it though (Score:5, Informative)

    by Kip ( 659 ) <.gro.ldaa. .ta. .pik.> on Friday April 11, 2003 @08:49AM (#5710003)
    According to Apple's financial reports, they had 4.4 billion dollars in cash reserves. Vivendi, who currently own Universal, has somewhere between 6 and 7 billion dollars of debt, so I don't think Apple is going to be able to pay part cash, part stock. Vivendi is just looking to get out.

    What I'm waiting to see is how this interacts with Apple's new music service which supposedly debuts next month. Nice catalog of music to choose from.
    • Vivendi has a whole lotta debt, it's north of 30 billion at the end of 2001, they haven't released figures for 2002, but probably still above 30 billion. That's why they are so interested in selling Universal, Blizzard, and their other assets and why Apple will get a pretty good deal on anything they buy. Apple would likely use around 4 billion from thier own cash stockpile, and either assume Vivendi debt, issue stock to Vivendi, or issue their own debt (expensive because investors don't see them ever rea

  • Slogan Change... (Score:5, Interesting)

    by MarvinMouse ( 323641 ) on Friday April 11, 2003 @08:49AM (#5710004) Homepage Journal
    If the Universal execs gain the upper hand in the merger/takeover:

    Rip... Mix... Burn... Sue...

    If Apple execs gain the upper hand in the merger/takeover:

    Buy... Rip... Mix... Burn...

  • And as we know... (Score:5, Interesting)

    by Bonker ( 243350 ) on Friday April 11, 2003 @08:51AM (#5710023)
    Despite Apple's rampant efforts to protect their own IP, they've been remarkably free, say compared to Microsoft, in distributing technology that allows more liberal uses of information.

    This could be very good or very bad.

    Free giveaways out of Universal's catalouge could be an incredible boost to sale of music-related hardware like the iPod or software like iMovie. We all need soundtracks, right?

    On the other hand, apple could be planning on using their new acquisition in order to further lock apple users into a single platform with costly upgrades. The idea that comes to mind is that they will start making 'Apple Only' music releases that can only be played on Jobs-approved hardware.

    Personally, I hope that Apple will use this aquisition to free up music and maybe some more of their own IP and use it to further hardware sales.

    • Re:And as we know... (Score:3, Insightful)

      by psxndc ( 105904 )
      The idea that comes to mind is that they will start making 'Apple Only' music releases that can only be played on Jobs-approved hardware

      Considering Apple, as a great a product as they have, only has around 4% of the OS market, I have trouble believing that this could happen if music were distributed on CDs. Yes, they have around 21% of the mp3 player market and would be able to do something like this if this were an mp3-only world, but I think the CD is going to be around for a while so I wouldn't worry a

    • Lock-in? (Score:5, Interesting)

      by ashpool7 ( 18172 ) on Friday April 11, 2003 @09:23AM (#5710246) Homepage Journal
      Unlikeley.

      Evidence:
      The iPod is available for Windows.
      MP3s play on any computer.
      OS X promotes open standards.
      OS intentionally provides Windows and Linux interoperability.


      Apple seems to has no interest in things that *lock* a user in. Sure, they have things that entice users to stay, like iTunes, but there's no lock-in there. I see the mentality being "well, you _could_ use something else, but why? Our stuff is SWEET!"

      ;-)

  • Apple Records? (Score:5, Interesting)

    by Reeses ( 5069 ) on Friday April 11, 2003 @08:51AM (#5710026)
    What about that injunction from Apple Records (the old Beatles record company) preventing Apple Computer from getting into the music business? Anyone know if this would apply?

    • Re:Apple Records? (Score:5, Informative)

      by James_Duncan8181 ( 588316 ) on Friday April 11, 2003 @08:58AM (#5710078) Homepage
      The settlement does not prevent them entering the music industry as such, it merely prevents them from entering it under the Apple name.

      Since they are buying Universal, which is an established brand...I would imagine that they will merely keep the name but make them a legal subsidiary of Apple.

      • Re:Apple Records? (Score:5, Interesting)

        by thatguywhoiam ( 524290 ) on Friday April 11, 2003 @09:39AM (#5710362)
        The settlement does not prevent them entering the music industry as such, it merely prevents them from entering it under the Apple name.

        Not quite.

        Apple settled with Apple Records a loooong time ago. When they (Apple Computer) paid off Apple (Records), they bought the rights to do whatever the hell they pleased with the Apple name. Apple Records existed at the time solely to collect old Beatles royalties and I'm not even sure if it still exists. It's not an active recording company at any rate.

        While I'm at it, Apple licensed the GUI from Xerox, too. ;)

  • sharing (Score:4, Interesting)

    by pcp_ip ( 612017 ) on Friday April 11, 2003 @08:52AM (#5710029) Homepage
    rip mix burn.

    Jobs is the only one that "gets" it. With Univeral being one of the largest record companies- this could change the face of music inthe digital age.

    My fear is that it's such a big addition to apple- will they loss focus. Look at the problems sony electronics have trying to be cutting edge but catering to Sony music's fears of piracy.

    And what about that pesky lawsuit with Apple Records. Apple was never to go into the music business.

    • Re:sharing (Score:3, Interesting)

      by MasonMcD ( 104041 )
      Well, think about this: has Pixar lost focus? Has Apple lost focus since 97?

      I think Jobs is the man with the plan.

  • who knew? (Score:5, Funny)

    by andy@petdance.com ( 114827 ) <andy@petdance.com> on Friday April 11, 2003 @08:52AM (#5710032) Homepage
    Who knew Apple even had that kind of cash?

    Their accountants, I'd assume.

  • Full Story. (Score:5, Informative)

    by Anonymous Coward on Friday April 11, 2003 @08:52AM (#5710033)
    Some anonymous Google translation doesn't do this justice. This is Big. Very big. Changing the way the world does business big.

    Adapt or die, as Lessig says.
    Wow.

    (Not logged in due to copyright infringement, and fear of being called a Karma Whore...)

    -----
    Apple Reportedly in Talks to Buy Universal Music
    A deal could yield up to $6 billion for parent firm Vivendi and make tech maverick Steve Jobs the most powerful figure in the record business.

    By Chuck Philips
    Times Staff Writer

    April 11, 2003

    In a pairing that would alter the architecture of the music business, Apple Computer Inc. is in talks with Vivendi Universal to buy Universal Music Group, the world's largest record company, for as much as $6 billion, sources said.

    Such a seemingly unlikely combination would instantly make technology guru Steve Jobs, Apple's co-founder and chief executive, the most powerful player in the record industry.

    Universal, which reaps about $6 billion in sales annually from artists such as 50 Cent, Shania Twain, U2 and Luciano Pavarotti, would be controlled by a maverick who revolutionized the computer market and coined the mantra "rip, mix, burn," which many in the music business read as an invitation to electronic piracy.

    The discussions, a closely held secret for several months, could founder over unresolved issues. Apple hasn't made a formal bid but may offer $5 billion to $6 billion for the music company before Vivendi's April 29 board meeting, according to the sources.

    Jobs and other Apple representatives declined to comment, as did representatives of Universal Music Group and Vivendi Universal.

    The Cupertino, Calif.-based computer maker's surprise play for Universal Music could alter the dynamics of the bidding for Vivendi's entertainment assets. The French giant, in a move to reduce debt, seeks to raise $7 billion this year by selling assets that probably would include some or all of its Universal film, television, theme park and music units.

    Investor Marvin Davis has offered about $13 billion for 65% of the entertainment assets and has been the only known bidder to express serious interest in the music company. A separate sale of the music operation would appear to work in favor of Liberty Media Corp. and others that are focused on the company's other entertainment properties.

    Jobs' pursuit of Universal comes at a time when Apple, with less than 3% of the desktop computing market, has been struggling to find its next wave of growth and the music industry has been buckling beneath the pressure of online piracy and falling sales.

    Defying conventional wisdom, Jobs apparently is betting that music is finally on the verge of becoming a profitable presence on the Internet. Apple has been quietly testing a service that some music business insiders believe could pave the way for widespread online distribution of songs.

    People who have tried the service, expected to debut by the end of April, say it makes downloading and purchasing music as simple and nontechnical as buying a book from Amazon.com. It allows users to buy and download songs to their computers with a single click and to transfer the music automatically to their portable MP3 players.

    The computer maker, known for its iMac desktop computer and other high-profile products, posted an $8-million loss on sales of $1.47 billion for its fiscal first quarter ended Dec. 28 -- marking the company's first back-to-back quarterly losses since Jobs returned to the CEO post in 1997. Apple has annual sales of about $5.74 billion and had about $4.4 billion in cash, cash equivalents, and short-term investments as of Dec. 28.

    Jobs, who also is chairman of Pixar Animation Studios, helped found Apple in 1976, then stepped down as its chief nine years later to launch Next Inc. He returned to Apple when it acquired Next.

    Universal Music Group, which saw operating profit slide 23% to $510 million last year, dominates the industry in 63 territori

  • Cash? (Score:5, Funny)

    by orangesquid ( 79734 ) <orangesquid AT yahoo DOT com> on Friday April 11, 2003 @08:53AM (#5710037) Homepage Journal
    Doesn't everyone have this kind of cash? I mean, the RIAA figures college students have about sixteen times as much.

    Oh, but wait a second---if a whole *Record Label* is only worth one-sixteenth as much as the RIAA things some MP3 trading is worth... shouldn't there be a million companies making tons of money with MP3s by now? I've only heard of a few less-than-stellar projects.

  • Cash? (Score:5, Insightful)

    by Anonymous Coward on Friday April 11, 2003 @08:54AM (#5710042)
    Who knew Apple even had that kind of cash?


    Who said they were paying cash?


    They have 4.4 BILLION in cash reserves though.


    They appear to have pretty good credit. Everyone else is taking advantage of low interest rates right now, why not Apple?

  • This could be the match made in heaven (Score:5, Insightful)

    by rlthomps-1 ( 545290 ) on Friday April 11, 2003 @08:54AM (#5710046) Homepage
    Most places are reporting that this is an odd match. I think this could be great. The music industry needs someone like Apple to come in with fresh ideas for a business model that wasn't conceived in 1932. The Register [theregister.co.uk] has a good write up and analysis.

    Apple may not come up with the best business model, but I'm pretty sure they can turn a profit and demonstrate that music labels can make money off the Internet if they embrace technology instead of trying to sue it out of existance.

  • New slogan (Score:5, Funny)

    by grub ( 11606 ) <slashdot@grub.net> on Friday April 11, 2003 @08:54AM (#5710048) Homepage Journal

    Apple's new slogan will be "Rip, Mix, Burn.. Except anything by Universal Music."

  • For those seeking a motive... (Score:5, Informative)

    by mblase ( 200735 ) on Friday April 11, 2003 @08:57AM (#5710073)
    ...remember that Apple has been planning its own online music-buying service [com.com] for a while now, having announced it just last month. Obviously this is a BIG step towards making that successful for themselves.

  • Hmm... (Score:3, Informative)

    by TopShelf ( 92521 ) on Friday April 11, 2003 @08:57AM (#5710075) Homepage Journal
    Wall Street doesn't appear to approve - Apple's stock is down about 2% on light volume.

  • "Didn't know they had the money" (Score:5, Insightful)

    by BadDoggie ( 145310 ) on Friday April 11, 2003 @09:03AM (#5710107) Homepage Journal
    They don't. [yahoo.com]. With a market cap of $5.1B and operating losses of $8M in Q4 2002 (and $45M in Q3), they're not in the best of condition. However, they have cash of about $4.4B, and their market cap and position is large enough to be able to get banks to deal.

    It would take a couple days and many pages to write up the details about why this could happen. Expect that they won't take Universal lock, stock and all the debt -- this will be done in a nasty way which screws a lot of creditors. Universal may be split into the more profitable bits and left with the debt-ridden bits, which would then be spun off and left to file Chapter 11 and later dissolved.

    Just 'cause they're "cool" and not MS doesn't make Apple stupid in business. They've survived this long...

    • Re:"Didn't know they had the money" (Score:5, Insightful)

      by MachineShedFred ( 621896 ) on Friday April 11, 2003 @11:45AM (#5711376) Journal
      These figures you have stated show how undervalued the company is.

      If the market cap is $5.1B, and they have $4.4B in liquid bank assets, that means the Tech and patent portfolio, "Apple" brand, outstanding accounts receivable, Plant, Property, and Equipment are only worth $700M.

      Go get the stock now... the Mac OS is probably worth $500M in development and marketing alone.

  • 2 for 1 deal (Score:5, Funny)

    by Mister Black ( 265849 ) on Friday April 11, 2003 @09:08AM (#5710147)
    Maybe Vivendi will throw Blizzard in for free

  • shake your money maker (Score:4, Insightful)

    by splateagle ( 557203 ) on Friday April 11, 2003 @09:08AM (#5710153)
    Who knew Apple even had that kind of cash?

    um... anyone who's been paying attention. Apple's been pretty consistently reporting profit for years now, and remarkably little of that has gone out of the company.

    Money goes in, but doesn't come out - simple math that one. They're sitting on some huge cash reserves.

    Perhaps this is a sign of the shape of things to come from Cupertino? providing the 'spokes' to their own 'digital hub' might be the next phase of the company's revival... anyway it looks like good news for all (Mac-heads and non-Mac-heads) on the DRM front if Apple get their (affirmedly anti-DRM) mitts on a major record label.

  • Focus? Culture? (Score:5, Interesting)

    by sjbe ( 173966 ) on Friday April 11, 2003 @09:08AM (#5710155)
    Ok, this makes a certain odd amount of sense as far as why apple might want it. Gives them some freedom to push digital media in whatever direction suits them. (good, bad, or indifferent) It also diversifies the business a bit which given Apple's niche strategy cannot be entirely a bad idea. If they can't beat Dell/Microsoft head on, it might be best to try something else.

    A big concern from a business standpoint to me would be focus. Apple has done pretty damn well by focusing on producing really great machines (and software) that appeal to a couple specific segments of the market. Their expertise really is in the "art" of computer design, both hardware and software and experience. This doesn't necessarily translate to running a music label which is a completely different business with completely different requirements.

    Granted Jobs has some exposure to this world (via Pixar) but that doesn't make it a good fit for Apple. I expect the culture clash will be huge. Apple is a pretty unique company. I don't see an obvious fit here.

  • Post from good source that doesn't require login.. (Score:5, Informative)

    by SaturnTim ( 445813 ) on Friday April 11, 2003 @09:09AM (#5710169) Homepage
    The Washington Post Story [washingtonpost.com] Your karma whoring friend... --T

  • Free reg. required, eh? (Score:3, Funny)

    by YetAnotherName ( 168064 ) on Friday April 11, 2003 @09:12AM (#5710180) Homepage
    Heh, heh, heh ... as a long time /. reader, I know the old trick of replacing www with archive will get me around their free registration screen!

    [clickity-click] there, and now to press the Enter key ... D'OH! It's not NYT!

  • What I'd like to beable to do.. (Score:5, Interesting)

    by Idimmu Xul ( 204345 ) on Friday April 11, 2003 @09:15AM (#5710206) Homepage Journal

    is buy a CD online for a much reduced price (where is the golden rule that says music produces/artist have to be millionaires? I mean, noone else is..) but then rather than have to wait 2/3 days before it's delivered so I can listen to it, be given the oppotunity to download high bitrate ogg's of the album. That way I get the music on demand, and get the tangable album in a few days time too.

    The dot com bubble burst, and techies took their pay cut.. I think it's about time the media bubble burst and the 'stars' take their pay cut too!

    • contrary to what mtv would lead you to believe, very few artists and producers are uber-rich. Most of them fall somewhere between 'eeking out a living' and middle-class.

      Asking all the artists who only sell 500,000 albums in their lifetime to take a pay cut because n'sync will sell 100,000,000 in their lifetime is unfair. Unless of course you want to make sure that there is less diversity in music, in which case it's a genius plan.

  • Contradiction (Score:5, Funny)

    by Flamesplash ( 469287 ) on Friday April 11, 2003 @09:17AM (#5710217) Homepage Journal
    But I like Apple and don't like Universal, won't this simply create a contradiction in the universe that will require the universe to implode and be replaced by a more confusing one?

  • Apple following Sony? Why? (Score:3, Insightful)

    by prismbreak ( 644209 ) on Friday April 11, 2003 @09:27AM (#5710277) Homepage

    There is so much conflict of interest inside Sony right now... and its really held back Sony's electronics division, specifically its walkman/mp3 players which are all crippled by copyright protection mechanisms.

    The Civil War Inside Sony [wired.com]

    Does Apple really want to get itself in the same situation? I feel that Apple's relative unemcubrance is what allow it to dethrown Sony as the maker of the coolest portable music device you can buy.

  • Who knew? (Score:3, Informative)

    by bluethundr ( 562578 ) on Friday April 11, 2003 @09:30AM (#5710298) Homepage Journal
    Who knew Apple even had that kind of cash?

    Dude, even in Apple's darkest days (pre-reentrance of Steve Jobs) under the stewardship of John Scully and Gil Amelio when all the sign painters in Cuppertino were all geared to start posting "Out Of Business" signs all over Infinite Loop...even in their DARKEST hours...they were still worth over 30 Billion dollars. Only a mega-corp of their size could've weathered the 30 Megaton business blunders they themselves created. 6 Billion? Especially! now that Apple is profitable again is chump-money!

  • Apple pissing on Gateway for ripoffs? (Score:5, Interesting)

    by Mikey-San ( 582838 ) on Friday April 11, 2003 @09:54AM (#5710477) Homepage Journal
    First, there was the Profile4, the thing they tried to say was better than the iMac. Then, there was/is "RipMixRespect", strangely similar to Apple's "Rip. Mix. Burn."

    http://newsobserver.com/24hour/technology/story/ 84 4767p-5933052c.html

    So did Apple just take a big, steaming dump all over Gateway?

    It seems that Gateway includes music downloads with EMusic as a part of their promotions to get people to buy their boxes ... And EMagic, well, that's part of UMG.

    That's kinda funny, when you think about it. I wonder what the Gateway higher-ups are thinking right now.

    And really, what, if anything, does this mean for Gateway? Are they now advertising for Apple? ;-)

    -/-
    Mikey-San

  • Crazy Ass Predictions (Score:4, Funny)

    by NaugaHunter ( 639364 ) on Friday April 11, 2003 @09:58AM (#5710512)
    1) Apple announces iTools account holders immediately gain access to 5 Universal songs per month. Access to more will require a nominal fee.

    2) With the release of their fifth film, Pixar announces their deal with Disney has been fulfilled and they have formed a new alliance with Apple as the distributor for future releases. Soundtracks will be available on Universal Records.

    3) In a surprise move, Dell acquires Apple Records, only to discover afterwards that the entire Beatles catalog is owned by Michael Jackson. Begins ad campaign with interns explaining why Wings was better.

    4) Bill Gates announces new behind-the-ear implant that will allow streaming music directly into a persons brain. Sharp-eyed consumers discover Terms-Of-Service includes clause allowing device to record thoughts that immediately become his property.

  • Here's how it could make money (Score:4, Insightful)

    by Steve Cowan ( 525271 ) on Friday April 11, 2003 @10:03AM (#5710552) Journal
    Apple buys Universal, cuts out 90% of the sleazy middle-man distributors by steering that distribution revenue to Akamai, from which Apple will benefit.

    Let the actual music-store sales of CDs fade into oblivion where it belongs as it is grotesquely undercut by Apple's new music distribution service, which operates with only bandwidth as an expense - no worries about costly shipping, manufacturing and logistics.

    The music distribution service has hooks into Apple's already attractive personal solutions (iTunes, iPod, .mac) making these products even more attractive to customers.

    Universal benefits because it is first to jump on board and has a premier business relationship with Apple's new killer service, giving it a (slight) advantage over other labels who may have to pay a slightly higher premium to use the first ever legal on-line music distribution system that is effective and "just works".

    If Apple/Universal does this properly (by playing the right cards at the right time), they will be laughing all the way to the bank.

  • Apple knows the key (Score:5, Interesting)

    by SuperKendall ( 25149 ) on Friday April 11, 2003 @10:24AM (#5710738)
    Apple realizes what no-one in the record industry does - that if you open wide the full possibilities for selling music, the take will be enormous.

    If Apple buys Universal, then they can continue to sell normal CD's - but also sell everything online. Even older unpublished stuff, which is currently languishing. Then you have not just CD buyers, but nostalgia buyers and people who just want one hit song and not a whole CD. That provides many more channels for revenue, unlike normal music companies which oddly seems to desire that only limited revenue channels be allowed to exist.

    Furthermore, by staying away from copy protection they save money over the stupid record companies spending all sorts of cash trying to prevent the CD buyer from accessing their own music! While other companies are building up bad will with stupid formats for online music and CD's that don't play in all CD players, Universal could sweep the industry.

    At the very least, the entry of a non-music company into the music business has got to have some interesting ramifications somewhere. Especially when you have a computer company that understands consumers better than most at the helm...

  • It's all about the business model (Score:4, Interesting)

    by cgreuter ( 82182 ) on Friday April 11, 2003 @10:28AM (#5710771)

    See, the current business model for music (sell recorded music bound to physical objects such as CDs) is, if not dying, on shakey ground. The reason Sony hasn't moved to widespread DRM is that they make three times as much money selling MP3 players as they do selling CDs.

    I think Jobs is trying to get Apple to that place as well. He wants to use Universal's content as a way to drive up demand for iPods and iMacs.

    If that's it, this is good news. It means a big chunk of the music industry will be owned by someone who'll just laugh at the RIAA.

  • My Theory... (Score:4, Funny)

    by telstar ( 236404 ) on Friday April 11, 2003 @10:32AM (#5710796)
    I think Steve Jobs already Kazaa'd all of their songs to his iBook and decided it was easier to buy the company than it would be to deal with a lawsuit brought by the RIAA.
  • Maybe because because Blizzard and Valve actually make money? Can't recall who else is under Vivendi Universal, but if Apple was trying to aquire those divisions too, this announcment would go from "Calafornia fell into the ocean" earth shattering to "Snowball fight in Hell! Hey look, a Snow-Saten"

  • This could be very big news (Score:5, Interesting)

    by Anonymous Coward on Friday April 11, 2003 @10:43AM (#5710901)
    I've been working in the music business for about 10 years now... I've run my own label, worked for other independents, spent some time with Sony Music (in their distribution arm) and now work with all of the majors via a marketing consulting company. If Apple is thinking along the right lines this could be very good news for consumers. Why?

    1. Universal Music Group is the largest major label in the industry.

    2. UMG already owns an incredible MP3 download service called emusic.com. Yes, there are ZERO DRM controls. Just great music from thousands of artists (mainly independent at this point, but still an important step).

    3. Apple would want to leverage their hardware/software assets vs. the content UMG controls. This would clearly mean cross selling between the iPod [one of Apple's most success products in years], the Mac platform, Quicktime, and all of UMG music/video assets. ... from an insider's perspective, everyone in the business already understands that digital distribution is the future. The key arguement is HOW and under what TERMS. This could be a very interesting step in the right direction. Certainly exciting.

  • Maybe it's not Apple, folks (Score:4, Interesting)

    by gamgee5273 ( 410326 ) on Friday April 11, 2003 @10:50AM (#5710951) Journal
    Maybe it's Jobs himself. Maybe it's Jobs and Apple. Maybe it's Jobs and Apple and Pixar. Remember, he bought the Pixar unit off of George Lucas, and Pixar has definitely become quite the cash cow in the past decade.

    Steve Jobs is a multi-billionaire in his own right. If he wanted to spend $6,000,000,000 on Universal Music then he - Steve Jobs - easily could. Aruably what we are seeing is Jobs setting Apple up to be a compeitor to Sony. He has always admired that company - I wouldn't be suprised if he has always wanted to emulate it.

    Imagine an Apple/Pixar/Universal company. This isn't an ill-fitting puzzle like AOL Time Warner. This would be, very much, a calculated and very simple plan by Jobs to evolve Apple.

    The last two things that Jobs would be missing in the plan would be a movie studio and a game console. Pixar could easily continue to work with the studios for distribution, thus the need for a studio goes down.

    That leaves a game console. The GameCube is an excellent design, in my opinion, with digital hub aspirations of its own. "GameCube II" could prove to be a spectacular hit (especially if they have a Zelda and/or Metroid launch title)...and Apple could be heading that up. Would Nintendo sell itself to Jobs? They might...they just might.

    The downside to this great (yet caffinated-induced-due-to-lack-of-sleep) fantasy is that we Mac users would almost be guaranteed of never seeing another version of MS Office past version 11.

    But is that really a bad thing? ;)

  • Sosumi - No, really (Score:5, Informative)

    by automandc ( 196618 ) on Friday April 11, 2003 @10:52AM (#5710967)
    This is particularly ironic, given that Apple Computer once claimed that it would never do anything that might compete with Apple Records (the label the Beatles were on). At the time Apple Computer was created, sound capabilities were so rudimentary on computers (essentially the bell), Jobs & Co. felt confident assuring Apple Records that they would not be competing with them in any form.

    When the Macintosh II came out with greatly expanded sound capabilities built in (not as an add-on MIDI card), Apple performed one of the most famous corporate "jokes" of all time, naming one of the new, high-quality system alert sounds "Sosumi" (Pronounced "So, sue me"). I don't think Apple Records (if they are even still around) ever took them up on it.

  • strategic decision... (Score:4, Interesting)

    by The Lynxpro ( 657990 ) <lynxpro@@@gmail...com> on Friday April 11, 2003 @11:37AM (#5711318)
    There are many different ways to view Apple's interest in Universal Music. 1. By owning the world's largest music company, Apple would have huge leverage in getting Best Buy AND Circuit City to sell Macs in their stores again. 2. Buck the trend of these encrypted music CDs not working in Mac CD/DVD drives. 3. Strengthen the Mac platform in music production and post production from the record company level on down... 4. Boosting iPod sales. Imagine if Apple's subscription system allowed you to download copies of the songs for your Mac (or PC) and allow you to transfer/copy and use them to your iPod; whereas transferring files to other MP3 portables cost extra. 5. Leverage in settling future standards issues like the current SACD vs. DVD-A (DVD Audio not the Trey Parker/Matt Stone definition of *DVDA*)... or Dolby Digital vs. DTS. 6. Enough clout to get the other multimedia companies to actually support the Mac on their DVD-Rom features on their movie releases... (longshot)... 7. Ringtone revenue. We've all been expecting an iPhone for a long time... 8. Haven't we been expecting Microsoft to purchase a media company for a long time now? Apple beats them AGAIN....

  • This could be very interesting (Score:5, Insightful)

    by Animats ( 122034 ) on Friday April 11, 2003 @01:18PM (#5712103) Homepage
    And it will really shake up the music industry, which badly needs it.

    The music industry is generally agreed to be in deep trouble. Their real problem isn't piracy - it's video. The music industry used to have their own channel - record stores. They now share their channel with Hollywood, since most stores that sell CDs now also sell DVDs, and even video games. A DVD looks just like an audio CD, and DVD players will play both. Yet the DVD has far more production value, more play time, and often costs less. Not unexpectedly, movie DVD sales are growing, music video sales are up, and audio CD sales are down. Total sales of "entertainment delivered on circular recording media" are way up. But the music industry's share of that market is down. (New figures on this were in yesterday's Wall Street Journal.)

    The music industry has been in defensive mode for years now, frantically trying to keep retail prices up in the face of this competition. Few if any new ideas have emerged from the music industry in years. Their cash-cow genres have been mined out - rock, rap, house, classical, and country all peaked a long time ago. Broadcasting companies now have more clout than record companies. Congress is tired of all the RIAA's whining. The industry is sick.

    Jobs can shake this up quite a bit. Especially since he can buy Universal at a bargain price, which means he can undercut the competition at retail. He's brighter than the current management in the music business. (That's not hard. The film industry has smart people, but top management in music is generally agreed to be dumb.) He might be able to find a way to pull the industry out of the tank. The Jobs "reality distortion field", an ongoing pain in the computer industry, would be an asset in the music industry.

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