Why is Universal Music cozying up to Apple? | via CNET (flat rate for ipods?)

This is a good comment on the Apple flat rate for music that has been in the news lately: Why is Universal Music cozying up to Apple? | Tech news blog - CNET News.com.

"The FT reported that Morris wants $80 for any Apple device bundling Universal Music songs, while Apple has offered $20. Getting a share of music players is smart, said Forrester Research analyst James McQuivey, even if it is late. But he warns that whatever gains the labels make on device sales, they could lose in other areas. Allowing Jobs to place their music catalogs on a single device might allow him to offer a breakaway handheld that could overshadow any other gadget or music service out there...."

My comment: I don't think so. People that buy CDs now ALREADY buy them voluntarily and because they really want a physical product. Cannibalization would be minimal and would definitely be offset by the revenues from the devices (provided the offer is indeed irresistible). However, the bigger question is: is the money in the DEVICE, or is it in the NETWORK, or both?  My take is that it's the network, and not the device. But let's see...

 

"The labels would just be turning over their music to another Apple-only environment," Forrester Research analyst James McQuivey said. "Nobody would want anything else."

My comment: I don't agree. Other providers would just need to be better or different on some other way, or add other values. You'll just have to be better or different than iTunes.

"This kind of offer would kill CD sales far more quickly," McQuivey said. "You'd be giving people that typically buy music a reason to quit buying. Besides killing off CD sales, the music industry would harm two areas that are going strong for it right now. One is MP3 sales and the other is the (free streaming) music offered by social networks Imeem and Last.fm. If I were the music labels, I would tell Apple to come back in 2009, after I've given these other services opportunity to grow."

My comment: There is not just ONE kind of music user / buyer / fan. There are dozens, and there is ample opportunity to serve them all, with different models, at different locations, at different times.

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