Monday, July 18, 2005

Music and Video: Business Model Change

With disappointing DVD sales, Hollywood could be tempted to trumpet the pirates card. However, they should look in its past and see have adapted to similar dangers.

Apple's is just one way on taking advantage of the increasing use of the internet as a media distribution. What stops Hollywood firms from reaching an agreement with Apple to run short films on its new gadget?

Do not whine, be different

WSJ.com - Apple Looks to Sell Videos -- and Maybe iPods to Play Them:

"Music videos, too, make sense because of the iPod's ready-made audience of music lovers. Apple in recent months has started bundling a limited number of music videos when iTunes customers purchase an entire album on the site. Users who pay $9.99 for the latest album by the White Stripes, for example, get a video for a song by the rock duo called Blue Orchid that can be downloaded to a computer.

Building on that effort, Apple has approached the four major music companies, Warner Music Group Corp., EMI Group PLC, Vivendi Universal SA's Universal Music Group and Sony BMG, a joint venture between Sony Corp. and Bertelsmann AG, to license music videos for sale through iTunes, according to people in the media industry. The videos, which could go on sale as early as September, would likely be sold for $1.99 each, with the possibility of a discount if consumers buy a music video and a song at the same time, these people say.

For music companies, a deal with Apple would represent another attempt to generate income for the music videos they sometimes spend hundreds of thousands of dollars creating. Music companies are still smarting from their two-decade-old strategic blunder of letting cable network MTV air video content for next to nothing, a decision that gave them little participation in the creation of what has become a hugely successful business for Viacom Inc."

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