The Anti-Apple Constorium & Facebook's music (non) challenge

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Monday, Sep 15, 2008

The world of non-iTunes entertainment offerings got a little more interesting this week.  In a sign of how much entertainment companies and other retailers hate Apple, they’ve joined together to form Digital Entertainment Content Ecosystem (DECE), an organization to get movies sold online.  According to this Hollywood Reporter story, the DECE group includes “Warner Bros. Entertainment, Fox Entertainment Group, NBC Universal, Sony, Paramount Pictures and Comcast Corp. with retailer Best Buy along with tech giants Microsoft, Hewlett-Packard, Cisco, Philips, Toshiba and Verisign.”  They might as well call it the “No Apple Allowed Club” since they’re all banding together to compete against Steve Jobs.  Usually, you could laugh off an Apple competitor as being naive but with such a big group of big shots, they might have the last laugh, especially since they own a big percentage of the film content out there and can slowly bleed off what they offer or don’t offer to Apple.  If consumers get used to going to another source (or several sources) besides iTunes for movies, then Apple’s got some problems ahead especially as these companies, not to mention Best Buy, can set up loss-leader pricing to entice buyers and also work with the tech/hardware people to have multiple ways to deliver it.


The other big anti-Apple move was the word that MySpace was readying its own music store and that now Facebook is probably looking to do the same, as detailed in this CNet article.  But note an important little item at the end of the article- there’s speculation that MySpace was forced into offering up music for sale because of legal stickiness.  First off, Facebook offers up streaming music because “clever legal language in the terms of the developer platform means that Facebook is exempt from many of the legal issues that would require it to negotiate with the labels.”  In the case of their competitor, “an industry source hinted that legal issues, not profit margins, were the driving force behind MySpace Music.”  Of course that’s speculation but as the article also points out, as I did in my last blog post, the profits for music sales with any service (even iTunes) is so tiny that the whole idea is self-defeating for everyone involved except for the labels and publishers.  That’s not a very encouraging sign for either MySpace or Facebook and it spells out why they’re not about to kill off iTunes themselves, unless they can also offer up a cooler entertainment player than the iPod.  Or if they find friends in high places like DECE…


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