Has the Steve Jobs reign of power ended?
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.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
The truth is:
They are no longer needed.
The word is easy to get out to the public without their help.
eg: NIN
The public is willing to pay the artist for the work. I know I have no issues with it.
tracks has Amazon Sold? Last count I saw Apple has sold 3 Billion.
New world order?
I don't think so.
The TV networks are next, with the movie studios to follow soon after that. All that broadcast networks and movie studios have to offer are money and distribution. Money is easy. And with digital downloads starting to take off for video, distribution has been democratized. It won't be long before some successful producer (think Aaron Spelling, Dick Wolf or Larry David) finances their own show and pays a network to distribute (the way George Lucas handled the recent Star Wars triology) and reaps all the profits. And it's not too long after that before producers skip the networks altogether and sell directly via iTunes and Amazon.
Personally, I can't wait...
Do you mean the way that they did it with "I Love Lucy" back in 1951?
CNET tries to bury Apple with a poison pen on a weekly basis but Apple keeps throwing sand in CNET's face. We'll see how impotent Steve is at next week's keynote. CNET obviously has missed the latest rumors over iTunes. I think i would rather say Goodbye CNET!
If that's the conclusion they (CNET) has come to then I guess there's nothing to change their minds, seeing as they have done their homework and actually looked on reputable news companies. That's what I'd do before I started mass criticism. If I were a CEO of a major film production company, I wouldn't like him either! It's just another classic example of counting one's chickens before they hatch. There's goes another bad egg!
Right now the movie industry still likes Apple because it supports DRM on videos, both in public and in private. But I'm sure something will happen to change that.
sounds like a politician to me, but that would be unsubstantiated.
Hold on Steve, don't give in to their greedy demands. Just look at the writer's strike going on right now. These people (the studios) are so greedy, they will lose out on mllions of dollars of sales just to play hardball. Ridiculous.
Yup, greedy Steve Job's power has clearly declined.
It's not just the iPod that has made iTunes THE place to buy media online. No one else, including AmazonMP3 is able to provide as consistent and easy to use online store.
When the online buying public finds the songs/media isn't available on iTunes, IMO, a large portion of them will revert to downloading them for free. Just this week some new "stealth" peer to peer software finished beta and entered public use.
Some of Job's power may have been diminished, but at what cost to the music business?
This article is ridiculous and you make references to things that are not even based in reality. Amazon just came in and took their power? Doesn't Apple still have the largest market share in digital downloads? 80+%?
You say Steve is arrogant and forced the record labels to work his way. How do you know this? Have you ever met him? Why don't you keep in mind that he turned an entire industry on its head in order for them to be even semi-relevant in the digital age. Major corporations that for the most part are run by old men, using old distribution methods with no understanding of how the internet works. Universal CEO Doug Morris is a CLASSIC example of this.
Apple doesn't even make money on the iTunes store they care about selling iPods. So yes there is new competition and yes they will evolve and adapt with that. That's how capitalism and successful companies work.
You might keep in mind that without Apple being stuborn and digging its heels in we wouldn't even have the the amount of digital music access, pricing and now DRM-free options that we are getting.
Be fair, be balanced, include facts. Or is that just too much hard work for you?
Before Jobs, the record industry was too busy fighting Napster instead of coming up with a legal way to sell their stuff online. I am glad that Jobs took control away from them, it was a much needed wake up call since the record companies were so afraid of change.
Again, the record labels themselves are to blame for the current situation... no one else.
He wanted to keep prices low.... the bastard. Glad to see he's go the come-uppance he so richly deserves. Now we can pay $17-$20 for a movie. Only Apple-loving fanboys and losers would want to pay less.
We are the winners!!!
I, for one, have been appreciative that Jobs has held the line on iTunes pricing to the extent possible, when the record companies were demanding variable pricing and other pricing concessions, including kickbacks on MP3 players such as Microsoft has agreed to pay with the Zune.
if you are going to be a shill for the RIAA and MPAA, Don, you might want to at least be a bit subtle about it.
- by mitrich January 9, 2008 1:33 PM PST
- I started using Amazon's mp3 download service about two months ago. I was a CD buyer, but that may be over. Amazon's service is so easy quick and slick.
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Showing 1 of 2 pages (28 Comments)I had tried iTunes on my very good Vista machine and it just wanted to take over and also did a poor job with internet radio. So, it is gone.