'Apple Has Destroyed the Music Business'–Not That We Didn't Try Our Best
Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song. With iTunes, it quickly established a market for paid downloads as the music industry wrung its hands in utter incomprehension at this new age of digital distribution that was dawning.
So it is ironic, enormously ironic, to hear NBC Universal Chief Executive Jeff Zucker accuse Apple of ruining the music business (like that second Lindsay Lohan album didn’t do any damage at all). Speaking at a breakfast organized by Syracuse University’s Newhouse School, Zucker said Apple “destroyed the music business in terms of pricing” and will invariably do the same to the online video business.
Noting that NBCU booked just $15 million in revenue during the last year of its iTunes deal, Zucker described the company’s deal with Apple’s digital media store as one that was corrosive to its media business. “We don’t want to replace the dollars we were making in the analog world with pennies on the digital side,” he said. What Zucker does want is a piece of Apple’s iPod business. “Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.”
Can’t imagine that’s going to change anytime soon, either–no matter how loudly Zucker whines. Apple CEO Steve Jobs would probably rather swallow a Zune whole than be pressured into handing over a percentage of iPod sales to record labels, as Microsoft has done with Zune.