Sunday, April 23, 2006


working on apple

As the team works out the solutions for the retail electronics industry, I am trying to figure out how to peel apple. I see there are really four prongs to their attack. First, they have the online apple store. Second, they have the retail apple stores. Third, they have ipod (sold at the first two outlets) and their wildly popular itunes store (which according to the popular press is what made apple cool again - I think they were always cool but their lack of volume made them easy to ignore). Finally, they have the partner alliance network (bestbuy, circuit city, compusa, amazon and pretty much everyone else who has floor space for an ipod display).

In trying to figure out what works well for Apple I found the following article. On first glance it looks like an page but when you check the URL you see that it is a clever recreation.

The article loops back to our IS 710 exploration of the music industry. When we talked about the music value chain we learned that the music recording and record sales process doesn't feed much of the profit back to the artist because the record labels need to recover the "development" costs. None of this should be new news so I will speed it up a bit.

Technically, Apple and itunes has the where withal to distribute music directly for artists but they built relationships with the record labels. This article comments that by working with the record labels Apple perpetuated the sorry state of revenue flow within the music industry. In fact they may have made it worse because the cost of creating and distributing a CD has been entirely removed (one of the huge things that artists needed from record labels).

If you have been following the itunes vs. beatles lawsuit you may be thinking that itunes needs to work with record labels because if they didn't they would be in clear violation of the agreement they signed with the beatles apple corp (cutting out the middle man puts apple itunes in the record label role).

I don't know if I have an answer but the whole thing reminds me of the recent Onion article that talked about apple moving into the home movie distribution space. While the article sounds a little like google video, the Onion was suggesting that recent changes a Itunes would allow you to buy and download your home videos from Itunes for as little as $1.99. That raises a different question, is it a parody or is it real? It become preposterous when you think that it was probably more about wedding videos than something most people would care to see. But google video allows you to load up your video and sell direct. Should apple go there?

That brings us right back to the tagging and taxonomy discussion. Maybe we have already reached the point that there is an over abundance of stuff out there that prevents us from finding the stuff we really want.

If you made it this far and still care - here is that article.

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