Apple is leading a race of lemmings into the zero-profit business of closed music downloads, says the founder of MP3.com, Michael Robertson.
“It seems kind of crazy to me, the economics don’t make sense,” Robertson told us Thursday. “Why are all these guys like Microsoft and Wal-Mart rushing into a business where the industry leader says ‘we cannot make money with the contracts that we have’?”
“This is a race where the winner gets shot in the head.”
And William Tell-style, Apple volunteered to be the first into the firing range. Canny Apple has had to swallow the pigopolists royalty fees, and DRM restrictions, but it thinks it has a business because its closed business model sees downstream profits from iPods sales.
Robertson started MP3.com in 1998 and after a barrage of lawsuits, sold it to Vivendi Universal in 2001. Last week, after a night on the tiles, Vivendi sold the mp3.com domain name to CNET, leaving the million-song archive to the vultures. (Robertson is striving to find a host for this, and we shall have more news of this later today).
The computer industry traditionally opposed the copyright cartel, but Apple was the first snitch to cut a deal with the pigopolists. Was this wise, we wondered?
“If one company got a huge market share – say 50 per cent or higher – they could negotiate better royalty rates,” notes Robertson. “But they forget something. The music industry is tens of thousands of publishers and just five major record labels. Getting all of them to agree is a real tough thing to accomplish even if you’re market leader.”
Without any Beatles songs, and with only one Roxy Music track on its music kiosk, Apple is currently in a position of begging the big five for content, rather than dictating the terms of the deal. It’s the rebel without a clue. Can it turn the tables?
Read the rest at: The Register
Related Posts
- A New Player In The Music World?
- Universal Music may seek royalty deal with iPod
- Skype founder: Kazaa, Napster help music
- Global music download stats spill beans on subscriptions
- CNET to buy and tune up Mp3.com
Loading ...
