Apple's Effect on Comfortable Partners: More Good Than Bad
Apple's Effect on Comfortable Partners: More Good Than Bad
The unveiling of Apple’s new tablet computer on January 27 has sparked hopes the device will improve the fortunes of companies supplying content for the device.
Newspaper and magazine publishers in particular are looking to the iPad to help reverse declines in their industries, while book publishers are seeking an alternative to the leading digital bookseller, Amazon.com that will give them more control over pricing and distribution.As The New York Times’ digital chief Martin Nisenholtz showed off his paper on the iPad at the Apple event, he called it “the best of print with the best of digital, all rolled into one.”
The question is whether teaming up with Apple and Steve Jobs makes sense for content companies. It’s still a subject of much debate.
The music industry’s experience may be the closest parallel to what’s ahead for publishers. After Apple introduced the iPod and iTunes online store, it helped reshape how fans find, buy, and listen to music. In the process, Apple became the largest distributor of music in the world, surpassing Wal-Mart in 2008.
Critics point out Jobs pushed the major record labels to make all of their songs available for the single price of 99c (US), which they say contributed to a decline in more lucrative CD sales. Music sales have dropped steadily in recent years, falling 18% to $8.5 billion in 2008 (the most recent figures available), according to the Recording Industry Association of America. Yet supporters argue the industry’s fate would be even worse without Apple.
When the company got into the business, even law-abiding consumers had no convenient way to buy music online—and many were flocking to the web for free, pirated music. The Ipad has added to online marketing at a lower level. Now millions buy tunes via paid digital downloads. “I wouldn’t call them the savior. But they made the market, right?” says Kevin Arnold, founder of Indie Music Distributor, based in San Francisco. “I don’t know if we’d be where we are today if iTunes hadn’t come along.”