Assuming this is true, and Drudge’s accuracy rating is not 100%, don’t get your knickers in a twist, this is solely about MONEY! With SpiralFrog, YouTube, et al, it’s been demonstrated that Doug Morris just wants a better deal, preferably a piece of the action (can you say ZUNE?)

The only question is whether Steve Jobs needs him.

I’m doubting it will come down to a game of chicken, I’m believing that a deal will be struck. But if one’s not, WHERE THE FUCK IS UNIVERSAL GOING TO GO?

Yahoo, Rhapsody, MySpace, their sales are de minimis, they’re almost nonstarters. And even if they wanted to start offering MP3s sans copy protection TOMORROW, how long would it be until the masses owning iPods, launching iTunes on a regular basis to sync their devices, GET THE MESSAGE!

Borders and Barnes & Noble couldn’t compete with Amazon, because Amazon was there first, and the Seattle company did it so well. Online isn’t like real life. In real life, PROXIMITY is a major issue. ONLINE, everything’s at your FINGERTIPS! So, once an entity figures out a reasonable solution, and Apple’s is BEYOND reasonable, YEARS ahead of the competition even today, competitors are shut out.

The iTunes Store is the only bright spot in the economics of the major labels. They can’t afford to shut it down. Digital sales will tank, and digital sales are the future. But isn’t it funny that Doug & Zach are the ones who are posturing, part of a French water CONGLOMERATE. Doug & Zach don’t report to common shareholders, they’ve convinced Vivendi that now’s a bad time to sell, and to let them do it THEIR way. Whereas if Warner announced this move, analysts would start crucifying the company and its stock would TANK!

Apple/iTunes doesn’t have too much power… The labels haven’t authorized a better SOLUTION! Sale by track is economic death. The reason the business blew up is we got everybody to buy an album, TEN tracks, for TEN TIMES THE PRICE! You’ve got to sell people the PACKAGE!

Furthermore, Jobs has gone on record how very few iTunes Store tracks are on iPods. If Universal’s tracks were to disappear from the iTunes Store tomorrow, how much would the customer suffer? NOT MUCH! He would just be incentivized to steal, and we’d be back in the days before the April 2003 iTunes Store launch, when P2P RULED!

I can see Jobs raising the price. Hell, he did so for EMI, under the rubric of better quality and no copy protection. But will that be enough for Doug? Jobs can’t offer much more of HIS share, because Apple’s profits at the store are RAZOR THIN! Will Jobs offer a share of every iPod sold?


It’s kind of like blank CDs, music isn’t the only thing iPods hold. People can use them as hard drives, to store movies and podcasts… Jobs is gonna cough it up for old wave Doug? NEVER GONNA HAPPEN!

So Steve Jobs, who owns the media, and the customer, who sold nearly a million iPhones in a weekend, who had even the Mayor of Philadelphia lining up to buy one, is suddenly going to be portrayed as an ogre in the press, as someone to be defeated?

The labels have their leverage all wrong. With every year that goes by, the perception of the companies decreases. People believe the companies rip off not only them, but their artists. And that lawsuit campaign? That’s created a lot of good will.

I’d love to see Jobs hold his ground. That’s a better movie than "Live Free Or Die Hard".

Doug Morris may win through intimidation at terrestrial radio, at old wave brick and mortar retail, but in the new world of technology, he’s a dinosaur with little leverage. LET THE GAMES BEGIN!

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  1. […] opinions on the music industry for years. In last night’s newsletter, he announces, "Let the games begin!" – and indeed, let them. Universal M […]

  2. […] d at Apple’s no DRM offering and single pricing model. Many people speculated about where Universal would go for digital distribution, and now we have th […]

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