As Greg Sandoval pointed out over at News.com, Apple may be close to winning over even more movie studios to make iTunes rentals a reality. And while I'll be the first to admit that this is a major victory for Apple, considering the possibility of its service being relegated to irrelevance in the video space, how big of a victory is it for Steve Jobs?
As one BusinessWeek column points out, Steve Jobs was only able to win the studios over by increasing the amount he's willing to pay for films. According to the report, Jobs had once capped the amount he would pay for each movie sold at $14, but has agreed to the $17 fee larger retailers like Wal-Mart are currently paying.
To make matters worse, the music industry has stood up to Jobs for the first time and has offered DRM-free music to Amazon even though Jobs and Company have been asking for such a deal for quite some time.
So what's really going on? Has Steve Jobs -- one of the world's most powerful CEOs -- lost his power? You better believe it.
Who would have thought this day would come? Not only did Apple seem like it would ride into the sunset with its iPod-iTunes connection, it seemed as though one company actually commanded the kind of power the film and music industry once wielded. In essence, both industries were at the mercy of one company for once and, well, it felt good.
And then everything went downhill for Steve Jobs quickly.
Whether it's his pompous nature or his belief that he was invincible, Steve Jobs truly believed that he could demand anything from the movie and music industries and win out because of the immense success of his company. After all, what would indicate this mentality was wrong? He was able to keep music prices down to $0.99 even though movie studios wanted them increased and as the iPod continued to sell, the movie studios and record labels needed Apple.
And while they still need Apple, the impetus to give in to Jobs' demands has lessened. Once again, we have entered into a situation where the music and movie industries have been able to gain the majority of control in the business and all Apple can do is acquiesce.
But how did this happen? It's simple really: Amazon came along and in a matter of months, has solidified itself as a major player in the music downloading business because of its willingness to woo record labels by giving in to some demands. Beyond that, the movie studios and record labels really don't like Steve Jobs. Not only has he made them look like fools for far too long, he's all too aware of the popularity of his player. In effect, Amazon appealed to the studios' baser instinct -- a desire to take Jobs down a few pegs.
Realizing the hell record labels have gone through with Steve Jobs, movie studios were not so quick to jump on his bandwagon. Because of this, the iTunes video service is floundering (at best) and the movie studios have shown that Steve Jobs still needs to genuflect at their altar, instead of the other way around.
Now, it should be noted that iTunes is still one of the foremost music retailers in the world and it's a main reason the music industry has been able to enjoy buoyed revenues over the past few years. Regardless, this is not a battle over revenue, it's a war over power. And for the first time since the iPod's release, Steve Jobs is the victim of a coup d'etat.
Say goodbye to power Steve. And while you're at it, say hello to your new rulers.