Fake Steve Jobs tells it how it is

July 5, 2007 at 11:43 am Leave a comment

It seems that Universal Music Group has confirmed it will not be renewing its long-term contract with Apple, but will instead have some kind of month-to-month arrangement. As the record label responsible for a third of all records released globally, Universal is obviously trying to wrestle back some control of its digital distribution.

The AP reports on the latest music sales figures here - album sales are down, but digital tracks are up 50%. But for a straight-talking assessment of the industry dynamics, look no further than Fake Steve Jobs (and if you haven’t already found this site, check it out immediately, it’s hilarious.)

“Here’s the thing. These guys could have done what we did. In the early days of the Internet, everyone figured the majors would build digital distribution arms. But they didn’t do it, because they didn’t understand technology, and they didn’t want to invest in building this expertise, and they were freaked out about piracy and paralyzed with fear….

“Ironically the mistake the major labels made was the same one that IBM made when it gave the DOS franchise to Microsoft nearly 30 years ago. They were faced with a new market that they didn’t understand. They had a piece of work that they couldn’t do on their own or didn’t want to do on their own and they didn’t view it as critical or important, so they outsourced it to a partner. The partner turned that seemingly unimportant work into a way to accrue power and create a monopoly and control the industry. Today in the music business we’re about where IBM and Microsoft were in 1989, when IBM finally got hit with the clue stick and realized what Microsoft was doing.”

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