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Apple vs. Media War Has Begun
Tuesday, September 11th, 2007 at 4:00 PM - by .(JavaScript must be enabled to view this email address)
The NBC defection from the Apple iTunes store is just the beginning of a war that will be the biggest and most bitter battle of Apple’s corporate life, according to PC Magazine on Wednesday.
"This is bigger than Apple versus IBM, more pitched than Apple versus Microsoft, and certainly more interesting than Apple versus Apple Corps ... It’s also likely that this war could leave the deepest scars," wrote Lance Ulanoff.
So far, Apple has exercised considerable control over music sales. The big media companies are desperate to make sure the same thing doesn’t happen to them, and they have a difficult choice to make. They want control over who can sell their video, how much it will cost, and where it will play to insure future control despite the opportunities with Apple now.
While various music services have failed, the competitors are simply a re-marshalling of resources to more effectively compete against Apple. The stakes are high in the long run.
"What’s more interesting is the way in which NBC walked away from Apple. Instead of continuing to work with Apple while sowing its seeds elsewhere, it got into a huge public dustup with the seemingly stoic Apple. NBC was angered by Apple’s rigidity and felt that the company was abusing its position in order to drive iPod sales..." Mr. Ulanoff observed. The dramatic tone may have been intended to punctuate the beginning of media’s holy war on Apple.
So far, Apple hasn’t been hurt. However, other media executives may be sizing up the situation and hatching their own war plans. Many have pointed out that this was a high risk move by NBC at a time when Apple is building the fires of the hand-held video market. NBC’s strategy seems flawed.
The author’s conclusion was that NBC would have been better off to stay with Apple, cover its bets, and work on additional non-exclusive agreements. "Even so, Apple needs to wake up, step across that line in the sand, start talking to every media outlet, and get flexible—in a hurry. And media companies should also rethink their strategy of simply walking away. I should think that the financial implications of not having Apple feeding their content to the hungry masses will not feel like a day at the beach," Mr. Ulanoff concluded.
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