Jon Bon Jovi slams Steve Jobs for 'killing' music

Apr 3, 2010
16,021
1
0
Seattle, WA
#1
I have talked before how Apple is undermining the music business by taking all the profit out of its sale and distribution since they enjoy so much profit in selling hardware. This is completely backward of any other audio//video format before it. Think of $25 DVD players and $10 DVD drives for your PC relative to hundreds of dollars for Apple hardware.

Now Bon Jovi takes his turn going after Apple :). What do you think?

http://music.msn.com/music/article.aspx?news=635420&affid=100055

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Jon Bon Jovi
Jon Bon Jovi slams Steve Jobs for 'killing' music
March 14, 2011, 3:41 PM EST
WENN

Jon Bon Jovi has taken aim at Apple co-founder Steve Jobs, accusing him of "killing" the music industry with iTunes.

The rocker is saddened that the "magical" experience of buying records in a store is disappearing, brick-and-mortars stores being eroded in part due to iTunes' success.

Bing: Bon Jovi videos, news and more

Bon Jovi tells The Sunday Times Magazine, "Kids today have missed the whole experience of putting the headphones on, turning it up to 10, holding the jacket, closing their eyes and getting lost in an album; and the beauty of taking your allowance money and making a decision based on the jacket, not knowing what the record sounded like, and looking at a couple of still pictures and imagining it."

More: Bon Jovi's tour is highest earner of 2010

"God, it was a magical, magical time," he continues, "I hate to sound like an old man now, but I am, and you mark my words, in a generation from now people are going to say: 'What happened?' Steve Jobs is personally responsible for killing the music business."
 

cjfrbw

Well-Known Member
Apr 20, 2010
2,235
53
48
Pleasanton, CA
#2
I have my own doddering nostalgias about "how it was." However, music is available with lots more information than ever before, which is a good thing. You can always ramp up the quality to taste, even look for the vinyl record on the basis of a low rez audition.

Computer media introduce a bit too much variety, perhaps, and a great deal of competition for musicians who would like the blockbuster status of yesteryear, which was in part aided and abetted by the narrower control of the music industry by fewer entities.

Can't stop progress, I like my vinyl and my Itunes both, different strokes.

I do like the image of Steve Jobs as a nefarious, corporate music killing Satan, however, it seems to suit him, but he never wears a suit.
 

Steve Williams

Site Founder, Site Owner, Administrator
#3
I have talked before how Apple is undermining the music business by taking all the profit out of its sale and distribution since they enjoy so much profit in selling hardware. This is completely backward of any other audio//video format before it. Think of $25 DVD players and $10 DVD drives for your PC relative to hundreds of dollars for Apple hardware.

Now Bon Jovi takes his turn going after Apple :). What do you think?

http://music.msn.com/music/article.aspx?news=635420&affid=100055

======


Jon Bon Jovi
Jon Bon Jovi slams Steve Jobs for 'killing' music
March 14, 2011, 3:41 PM EST
WENN

Jon Bon Jovi has taken aim at Apple co-founder Steve Jobs, accusing him of "killing" the music industry with iTunes.

The rocker is saddened that the "magical" experience of buying records in a store is disappearing, brick-and-mortars stores being eroded in part due to iTunes' success.

Bing: Bon Jovi videos, news and more

Bon Jovi tells The Sunday Times Magazine, "Kids today have missed the whole experience of putting the headphones on, turning it up to 10, holding the jacket, closing their eyes and getting lost in an album; and the beauty of taking your allowance money and making a decision based on the jacket, not knowing what the record sounded like, and looking at a couple of still pictures and imagining it."

More: Bon Jovi's tour is highest earner of 2010

"God, it was a magical, magical time," he continues, "I hate to sound like an old man now, but I am, and you mark my words, in a generation from now people are going to say: 'What happened?' Steve Jobs is personally responsible for killing the music business."
I don't believe it was Steve Jobs or iTunes that is killing the business. There is another thread here on the forum asking whether CD's are going to disappear in the future. There is no question in my mind not "if" this will happen but "when"

Apple has always had the entrepreneurial ability to seize on an opportunity and capitalize upon it. Just because he was the first doesn't make him a bad guy nor the one who who is killing the music business. BTW, Bon Jovi doesn't need to sell his music on the iTunes store
 
Jul 1, 2010
8,713
1
0
#5
I have talked before how Apple is undermining the music business by taking all the profit out of its sale and distribution since they enjoy so much profit in selling hardware. This is completely backward of any other audio//video format before it. Think of $25 DVD players and $10 DVD drives for your PC relative to hundreds of dollars for Apple hardware.

Now Bon Jovi takes his turn going after Apple . What do you think?
I think Bon Jovi is just another romantic steeped in nostalgia and looking for someone to blame for the loss of his era. Either that or he's just another old guy sitting on his porch yelling "Hey you kids! Get offa my lawn!!"

Your position is different Amir. You seem to think that because Apple is making a decent profit on hardware, they are sucking all the profits out of the music software market. I don't get that argument at all. Let's look at the numbers:

Ray LaMontagne's new album, "God Willin' And The Creek Don't Rise" -- $13.99 at Best Buy, $10.99 on iTunes. And on iTunes? No duplication, no disks, no jewel box. no printing, no bricks and mortar, no multiple outlet overhead, yadayadayada....

All of that for just $3? Nah. I think there's plenty of profit in iTunes, and the music industry agrees with me:

Reports of iTunes profits have surfaced over the years, but these look to be the largest yet. By Billboard’s calculations, iTunes turned a profit in 2007 with $1.9 billion in revenue and a 30 percent profit margin:

If all [of Billboard's estimated] 1.7 billion downloads were counted at the U.S.
price of 99 cents, they would equal $1.7 billion in revenue last year.
But when it repatriates sales revenue from other countries, it likelyenjoys a bump thanks to exchange rates. For example, in the UnitedKingdom, iTunes charges 79 pence per track download, but that equals$1.56…

So when revenue is brought back to the States,
Billboard estimates iTunes’ music download revenue at $1.9 billion lastyear, which is in line with the $2.7 billion in revenue it reportedduring calendar year 2007 for other music-related products and services.Those consist of iTunes Store sales, iPod services and Apple-branded and third-party iPod accessories.

At a 30% profit margin, the gross profit equals…

At that point, the article tails off into subscriber-only territory (apparently Billboard didn’t get the memo). Without having read the rest of the article, these figures appear to mean that Apple made $570 million in profit from the iTunes store last year — not a bad haul.
Here's the source: http://www.wired.com/listening_post/2008/03/apple-apparentl/

But even if it were true that iTunes was just breaking even, it would be illogical to lay the problem at Apple's feet. With all of that duplication, packaging, marketing, distribution and retail activity cut out of the supply chain for just $3 on a $15 product, if Apple wasn't making money on it, logically, we'd have to look for the money somewhere else. If anything, I think they're making too much money on music and need to share some of the savings! There's gold in them hills.

Software? Maybe. Pages is just $20 on the App Store. Garage Band is just $15. That's brutally cheap.

Tim
 

Steve Williams

Site Founder, Site Owner, Administrator
#6
I think Bon Jovi is just another romantic steeped in nostalgia and looking for someone to blame for the loss of his era. Either that or he's just another old guy sitting on his porch yelling "Hey you kids! Get offa my lawn!!"

Your position is different Amir. You seem to think that because Apple is making a decent profit on hardware, they are sucking all the profits out of the music software market. I don't get that argument at all. Let's look at the numbers:

Ray LaMontagne's new album, "God Willin' And The Creek Don't Rise" -- $13.99 at Best Buy, $10.99 on iTunes. And on iTunes? No duplication, no disks, no jewel box. no printing, no bricks and mortar, no multiple outlet overhead, yadayadayada....

All of that for just $3? Nah. I think there's plenty of profit in iTunes, and the music industry agrees with me:

Reports of iTunes profits have surfaced over the years, but these look to be the largest yet. By Billboard’s calculations, iTunes turned a profit in 2007 with $1.9 billion in revenue and a 30 percent profit margin:



Here's the source: http://www.wired.com/listening_post/2008/03/apple-apparentl/

But even if it were true that iTunes was just breaking even, it would be illogical to lay the problem at Apple's feet. With all of that duplication, packaging, marketing, distribution and retail activity cut out of the supply chain for just $3 on a $15 product, if Apple wasn't making money on it, logically, we'd have to look for the money somewhere else. There's gold in them hills.

Software? Maybe. Pages is just $20 on the App Store. Garage Band is just $15. That's brutally cheap.

Tim

Now Tim

Be kind to my partner ;).

Give him a Mac that even has Flash and I bet he wouldn't use it. Be that if it may this is not a Steve Jobs thing but rather smart business and all the more to him for making a profit
 
Apr 3, 2010
16,021
1
0
Seattle, WA
#7
Your position is different Amir. You seem to think that because Apple is making a decent profit on hardware, they are sucking all the profits out of the music software market. I don't get that argument at all. Let's look at the numbers:
Trust me Tim. Challenging me on this point is like accusing Steve that he may not know how to deliver a baby :). This is my core business and expertise when I am not typing on WBF :D.

I have worked for Microsoft where we tried to launch not one but two music services. Both were busts from profitability point of view. Since leaving Microsoft, I have been involved in evaluating every third-party music service company outside of Amazon. They all, and I mean all, lose money. Apple does not release profitability numbers. Nor can you assume that the terms that Apple gets, are the terms that third-parties get.

Even if one were to trust the billboard numbers, 30% is nothing. That is the gross profit. You have to pay for bandwidth, credit card transactions, customer service, metadata services, man-power to QC all the music arriving (ton of them come with incorrect metadata or mismatched from others), server/NOC cost, legal fees to negotiate contracts with tons of independents, up front royalty demands by some labels, etc.

All of the above are solvable if this was a healthy ecosystem that after all of those costs, left money for the person in that business. But it is not. If you are exceptionally well run, maybe you lose 5%. If you are poorly run, you lose your shirt, underwear, and maybe your socks! :D

The only people who can get into this are companies who can afford to lose money and do so because they have something else to sell (e.g. Amazon).

Apple once and for all, has killed music distribution. There should be no doubt about that, after nearly a decade of them dominating this field with no other entrants.
 

Steve Williams

Site Founder, Site Owner, Administrator
#9
The only people who can get into this are companies who can afford to lose money and do so because they have something else to sell (e.g. Amazon).
Amir, isn't Microsft one of these companies.
 
Jul 1, 2010
8,713
1
0
#10
I'm sure you know your business, Amir, but this layman is still having a hard time picturing how an online distribution operation comes up with the costs of physical duplication, packaging, distribution and retailing. If it works the way you say it does, its a wonder any online retail business can make any money. Where would the point of profitability be? Would iTunes have to charge more for a download than we pay for the physical product and all the costs attached to it?

Tim
 
Apr 3, 2010
16,021
1
0
Seattle, WA
#13
Shocked with with which part? The first or second?

On Second, this is an incredible chicken and egg. Apple gets component prices that simply cannot be matched. I think they buy something like one third of the global supply of flash memory. Imagine you show up and want to get prices on this. And flash memory is the top component cost in these machines. Next would be display, flash memory and processor. A company like Microsoft simply does not have the buying power there of forecast volume.

I must say, as with Google, Apple has achieved a set of dynamics that are impenetrable. It is a durable kind of business that cannot be cracked by others. Now Microsoft also owns some of this in OS, Application and to some extent, server business. I call these $100B ideas. I go and celebrate if I can think of a $1B idea :D.
 

Steve Williams

Site Founder, Site Owner, Administrator
#14
Shocked with with which part? The first or second?

On Second, this is an incredible chicken and egg. Apple gets component prices that simply cannot be matched. I think they buy something like one third of the global supply of flash memory. Imagine you show up and want to get prices on this. And flash memory is the top component cost in these machines. Next would be display, flash memory and processor. A company like Microsoft simply does not have the buying power there of forecast volume.

I must say, as with Google, Apple has achieved a set of dynamics that are impenetrable. It is a durable kind of business that cannot be cracked by others. Now Microsoft also owns some of this in OS, Application and to some extent, server business. I call these $100B ideas. I go and celebrate if I can think of a $1B idea :D.
I am surprised that a company as big as Microsoft "doesn't have the buying power"
 
Apr 3, 2010
16,021
1
0
Seattle, WA
#15
When it comes to building music, even the largest consumer electronics companies lack buying power of Apple. Microsoft's main business is software. That doesn't give it any buying power with hardware suppliers.

Now, you can give a $200M order and get lower costs on a $1 part but then you will have to inventory 200M units! Also, the way big companies work is that money that is in the bank, or earned by another group, is not yours to spend :). Stock holders look for profit growth. If you take the money away from another group and spend it on buying hardware, your stock will likely tank. And money in the bank cannot be used to fund R&D -- it directly hits your earnings. Net, net, you can have $40B in the bank, but you can't solve a problem like this :).
 

DaveyF

Well-Known Member
Aug 1, 2010
6,135
127
63
La Jolla, Calif USA
#16
I don't really get this thread:confused::confused:
I see itunes as a larger 'library' of music than has possibly ever existed before and one
that is more accessible than ever before by a much larger audience. My kids use it all the time
to buy 'exactly' the songs that they want- and from what I can tell, most other young people are
doing precisely the same thing....So, are you telling me that the musicians/artists are making less money,
with this MUCH greater audience, generating royalties to them day and night:confused::confused:
The allure of walking into a music store and having to buy several unknown pieces of music in order to get the track that you want, seems to me to be far less desirable than being able to weed out the 'turkeys' and just taking the gems, IMHO.
If you look at the current 'hits' on itunes, I think you would see vast exposure and more than likely much larger revenues to the artists than ever before.
To argue that the old walk-in brick and mortar store was more efficient in the manner that music was propagated to the buying public than what is now prevalent,seems to me to be completely wrong... again just IMHO:)
OTOH, I'm sure that several artists don't like the fact that they have to attempt to make all of the tunes on their albums desirable and cannot get away with what used to be called in the biz..'filler' in the old days:eek:
 
Apr 3, 2010
16,021
1
0
Seattle, WA
#17
So, are you telling me that the musicians/artists are making less money,
with this MUCH greater audience, generating royalties to them day and night:confused::confused:
Yes. Remember who broke up the album: Steve Jobs. Used to be if there was one good song you wanted, you forked over $13 for the whole CD. Jobs comes around and demands that songs be sold for 99 cents. Now people buy just that song. As for your kids, many don't even buy the music. The advent of portable music players means that they have a convenient way to download and play content they have not paid for. Add these two together and you see why the artists and labels can't make as much money as they used to.

To argue that the old walk-in brick and mortar store was more efficient in the manner that music was propagated to the buying public than what is now prevalent,seems to me to be completely wrong... again just IMHO:)
OTOH, I'm sure that several artists don't like the fact that they have to attempt to make all of the tunes on their albums desirable and cannot get away with what used to be called in the biz..'filler' in the old days:eek:
There you go. You already knew the answer :).

Note that my point has been different. The issue there is that once the album was broken, the margin structure did not allow competition. Over time then, Apple can name its terms and grind down the labels even more, leaving artists with even less money and still no competition. If you are a content owner, you want thousands of retailers selling your stuff -- not one gorilla. But gorilla is what they have.

As consumers, we want choices as to not be dictated terms by the one supplier. That choice is vanishing. And to add insult to injury, people line up for days at the Apple alter to do so when a new device comes out. We keep rewarding the man, and keeps going further and further in this direction....
 
Jul 1, 2010
8,713
1
0
#20
As for your kids, many don't even buy the music. The advent of portable music players means that they have a convenient way to download and play content they have not paid for.
An argument against Napster, Vuze, Pirate Bay. Kids pay Apple for music. Apple invented the business model, software and channel that brought millions of them back to buying music. It's hard to see how that ruined the music business, which I think was hurt by being uninventive, greedy, stuck in entrenched thinking, with an inability to adapt. And lots of companies, including Microsoft, could have done what Apple did, they just didn't have the vision and/or wouldn't take the risk. As you've pointed out, it doesn't matter how deep your pockets are if they are compartmentalized and management is unwilling to fund innovation in one out of the depths of another if it has a negative impact on the next quarter's earnings report.

Tim
 

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