There really isn’t an industry as stupid or as greedy as the music business/cartel. The new york times recently reported that the Universal Music managed to extort $1 from the sale of every $250 Zune, Microsoft’s new mp3 player. Luckily for Microsoft, they make about $12 billion a year and have about $30 billion cash-in-hand. Clearly, this is a win for innovation when the only company that can afford to make a digitial music player is the richest company in the world. Maybe Exxon can enter the market too. Over at GigaOm, Om himself has a post entitled Microsoft, Zune & The Music Mafia in which he goes to town on the music cartel. The post is defintely worth reading but I find this is the most interesting take-away:
If Apple had to pay at least $1 per device for every iPod sold over past two fiscal years, its cost would be $62 million at minimum: or about one more song per device. If music industry cannot sell one additional song to consumers (and has to blackmail for more money) then, you as a business, have lost grip over your core competency.