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WhatTheyThink

Industry Insight

BoSacks Speaks Out: Fear Losing Control to Apple

What do you do with the proverbial 800 pound gorilla,

By Bob Sacks
Published: September 8, 2010

What do you do with the proverbial 800 pound gorilla, who is mightily shaking your tree and starting to take all your fruit? Do you negotiate, capitulate or pretend it is not there and hope that it just goes away. This is a serious problem for all the members of the media industry. There is a new Apple product announced this week called Apple TV, which is a revised Apple process to sell TV shows for 99 cents.

I noted industry pundit said "This is a plan that is designed to sell iPads, iPods and iPhones. It is not a plan that is designed to appropriately value content."

And that, I think, is great wisdom. Steve Jobs doesn't care about magazines, TV, books or any other content provider. He cares about selling hardware and making a profit in the transaction of getting someone else's content into his hardware. This is a formidable new business plan. In the old days when you bought a Sony TV, your arrangement and association with Sony ended when the TV got home. They didn't have a plan to make 30% on every show you watched.

Not so Mr. Jobs. He not only has a plan, he is succeeding in its implementation. Sell the hardware and make sure you get a profit on its use. From a publisher's perspective I think it is rather diabolical. He has created a business jig-saw with interrelated and profitable components.

We have all heard about Time Inc.'s battle for the right of subscription continuity. We have all read of book publishers being dictated to by Mr. Jobs about the price and value of their products. And now it is TV's turn. The world is, indeed, turned upside down when a content creator has to bandy business plans with a widget-maker. But he seems to have the sorcerer's stones, and that the powers of Disney, Time, and all the other magicians cannot deflect his ascendancy to attack and control their profitability.

What do we do? Join in and give Apple a cut of everything that passes their way from our companies or do we try and fight what appears on the surface to be an inevitable not-so-silent partner? Will the new competition now rising from other widget-makers stop this monopolized onslaught of content distribution? It is very hard to tell when Apple seems to have not only the near-perfect hardware platform but the adjacent and successful content sales tool known as iTunes.


"It is a paradox that every dictator has climbed to power on the ladder of free speech. Immediately on attaining power each dictator has suppressed all free speech except his own."
Herbert Hoover (American President, 1874-1964)

 

Discussion

By Doug Bennet on Sep 09, 2010

One of my questions about Apple TV is how the cable companies will respond. It seems a direct attack on their business, unless they can make up lost cable fees with increased Internet access fees Viewers may be ditching their cable in favour of TV over the Internet, which my kids are already doing anyway. (And we don't have cable.) The current issue of Wired (good old print product) has a good story on how people are accessing TV these days.

 

By Wayne Shipman on Sep 09, 2010

Bo Sacks, come on! Lighten up!

Think 'intermediary'. News organizations gather 'free' news, aggregate it, package it for 'users' and ask for payment for the convenience. Movie and television studios 'capture' performances for later delivery to users. It's easier than sinking the Titanic ten times a day for other people's enjoyment. You get my drift...

Apple is just an intermediary. They are making it easier for the users and vendors to 'hook up' and share the value. Apple is taking their cut as the enabler.

Printers produce products that are 'intermediaries' for their customers. Their value remains from their craft or expertise in praparing and producing something that is convenient for others.

Digital photography and the platemaking process all have replaced film, which was a more convenient intermediary than glass plates, metal, or litho stones.

Why beat up Apple? It's not their fault that they 'get it'. Being clever is not a crime, unless you're a bully, I guess...

Peace!

p.s. give up on the free speech angle. Steve Jobs is no dictator. Last I read, he has less than a handful of media partners. Amazon dropped their prices after the announcement, not before! Don't you want to dance with the free enterprise thing-y, too?

 

By Noel Ward on Sep 09, 2010

Buy Apple stock.

Steve Jobs has been seeing the world differently for a very long time. And (mostly) profiting from putting his perception into products. That he sees things through a different lens is less a problem than it is opportunity for media partners and other companies to emulate (or at least participate in) his model.

The media universe has changed, and it's not likely to go back. The changes may not all be positive and will have a downside, but so has virtually every change brought on by technology.

Mr. Jobs does not own, create or dictate any of the content, but if he can find a way to help those who do own it sell it, that's OK (works so far for music, books and some video). He'll have competitors, and all of us will have the power to choose who we buy from.

Or not.

 

By Adam on Sep 09, 2010

I won't disagree with the Steve Jobs-dictator assimilation. If it wasn't for the genius efforts of the dev-team who keep jailbreaking apple's idevices these devices would be quite limited in their functionality.
What perplexes me, though, is why many people think that the only way to get content onto the idevices is to go through iTunes and by iTunes I'm assuming people are referring to the Stores within it.
The iBook application on my iPad has tens of ebooks on it and none of them came through iTunes. My iPod application has tons of audiobooks in its library and none came from iTunes.
What boggles my mind is this... if you go, say, to Penguin Book's website, select any book you want, add it to your cart and click on checkout you do not get the option to download a PDF. Pardon my French but 'what in Scott's name is going on? This is the 21st Century. If you're a publisher, your website should not only have every book in PDF but it should have a backend system developed and residing in the freakin' cloud that allows the customer to select whatever electronic format, click Generate and have within say a minute or two a download button appear on screen. Charge for it but make it available. But here's why it's not like that and why Apple is on top... I read this somewhere can't remember where... If the railroad companies of 100 years ago did not think that transporting people could only be done on ground, today we would be flying on Union Pacific, AmTrac, CNRail.

 

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