The Switch To Intel

It’s about tomorrow.

Could Apple Computer be any hotter?  Shouldn’t it scale down development and
return value to its shareholders?  Isn’t that the goal of a corporation, to
deliver for shareholders TODAY?

No, the goal of a corporation is to deliver value for shareholders LONG TERM!

Dick Parsons didn’t believe in the music business.  Bertelsmann didn’t
believe in the music business.  Howard Stringer doesn’t believe in the music
business, otherwise he wouldn’t have hired Andy Lack.  EMI is too fucked up to even know what’s going on.  And Universal, like its old leader Lew Wasserman,
believes in CONTROLLING the future, the company believes in utilizing its legal
department as a profit center.  Universal is single-handedly holding back the
future of music.  First, by bullying its major label counterparts in the early
twenty first century and now by suing Bertelsmann to get money for that company’s
funding of Napster.

Hank Barry badgers me with new ideas to save the music business.  He can’t
understand why the major companies don’t wake up.  He wonders what it’s going to take.  I tell him Napster proved that the only way to change the
infrastructure is to STEAL THE MUSIC!

Make no mistake, if it weren’t for Napster, there’d not only be no iTunes
Music Store, but no iPod.  That little device that’s your most treasured
possession, don’t forget that the RIAA sued to stop its progenitor, the Diamond Rio.

One man in the music business believed in the future.  Thomas Middelhoff.  He
realized, like Steve Jobs, it wasn’t about TODAY, but TOMORROW!  It didn’t
matter that the major labels made their money on CDs.  It didn’t matter that few
people had broadband connections in 2000.  In the near future, people would
want their music as files, and he sought to deliver this.  And for this, he and
Hummer Winblad are being sued.  And that’s totally fucked up.

The fact that the RIAA has convinced ignorant copyright holders that P2P is
stealing that must be stopped does not make their pronouncement true.  You MUST
trade P2P.  You MUST protest the heinous behavior of the major label cartel. 
You MUST drag the business into the future, because otherwise the cartel is
going to keep it in the past.

If they don’t win in the Supreme Court, they’re going to lobby Congress for
legislation.  They’re going to do all in their power to keep music from the
public.  Yes, P2P allows cheap and easy distribution to the masses.  Allowing
more people to own more music at a cheaper aliquot price.  What’s wrong with
this?  NOTHING!  It’s just not the paradigm the labels have employed previously. 
They’ll make MORE money if they license P2P, but they’re afraid.  As afraid as
the independent promotion men whose business is threatened by shrinking label
budgets and Elliott Spitzer.

I don’t really give a rat’s ass whether the major labels survive.  But I DO
care about spreading the life-fulfilling greatness of music to as many people
as possible.  Economies of scale, provided by the Web, allow this.  It’s
happening.  P2P is burgeoning.  The major label cartel just refuses to monetize it. 
But what worries me is they might institute penalties, restrictions in
hardware, that will prevent the future from arriving.  To the detriment of EVERYBODY!

Steve Jobs is throwing the long ball.  He sees that in a couple of years if
Apple continues to rely on IBM it’s fucked.  For Apple is a relatively small
customer for Power PC chips.  And, IBM can’t deliver what they need, at the
price they need it.  The G4 laptops are getting long in the tooth, Apple can still
sell them today, but in two years or so, sales will fall off a cliff, when
Intel processor-based machines run performance circles around them.  There’s no
upgrade path, because IBM’s Power PC G5 chip runs too hot, and consumes too
much power.  SEEING the future, Steve has decided to make a change now.  Will it
be successful?  Maybe not.  But, the other route is slow death, by shrinkage
of market share if nothing else.

But you don’t take such an action willy-nilly.  You PREPARE!  Apple’s got a
HUGE cash hoard, BILLIONS of dollars.  This is their buffer, their CUSHION
against doing that which is expedient in order to survive.  Warner Music used to
have essentially no debt, now Thomas H. Lee has laden it with debt so huge the
company can barely function.  THIS is the way you prepare for the future?? 
And Edgar Bronfman, Jr. speaks of new technological opportunities, but I don’t
see him embracing any.  Andy Lack keeps focusing on the disc, which is like Mr.
Jobs believing in IBM, which has failed to deliver the 3 gigahertz chips it
promised.  EMI is overselling Coldplay and the Gorillaz, just to prop up its
stock price.  Think different my ass.  Universal is behind SUING customers
whereas Apple is all about delivering that which the mainstream customer can’t even CONCEIVE of yet.  Like built-in RSS in Safari, and podcasting in iTunes.

The major labels are bullies.  Not much different from Morris Levy and the
record men of yore.  For a business where almost all of the product is produced
on computers, the executives in control are technologically backward.  If
these companies truly believed in music, they would embrace the future, try new
models before the mainstream marketplace was even ready for them.  Dazzle
consumers to the point where they got EXCITED about music.  But all they can do is
come up with lame non-singers like Ashlee Simpson.

Steve Jobs realized that it’s not about quantity, it’s not about lowest
common denominator, it’s about selling no art before its time and having it be so
good that the public CLAMORS to consume it.  Can you say "Finding Nemo"?  And
"The Incredibles"?

Steve Jobs can be a mercurial prick.  But it’s not in service of his ego, but
the creation of insanely great products.  If only record execs could say the
same.

If the above doesn’t make sense to you, then you’re just out of the loop. 
You’ve drunk the major label kool-aid, unlike what George Harrison said, you
can’t think for yourself.  Please don’t make any pronouncements, don’t line up
and yell until you know about the new technological world.  Otherwise, you’re
just demonstrating your ignorance.

People aren’t stealing the music.  They’re just demonstrating a better way to
consume it.  If you can’t wrap your head around this concept it’s only
because your noggin is too far up your ass.

This is a read-only blog. E-mail comments directly to Bob.