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BusinessWeek: Apple may need to play better with others
Monday, January 14, 2008 - 04:50 PM EST

"For Apple to make the most of its peerless products, experts say it will need to improve relations with the folks who create the content to run on them," Peter Burrows reports for BusinessWeek.

"At Macworld, studios including Disney and News Corp.'s 20th Century Fox are expected to announce support for a new iTunes movie rental service. Fox and others are also expected to make their newest releases available at iTunes, something only Disney currently does. But Apple is clinching such deals in part because of its newfound willingness to compromise, say sources. Apple has agreed to increase the wholesale price it pays to studios, from $14 to closer to the $16 they get when they sell a DVD to Wal-Mart, say people familiar with the negotiations," Burrows reports.

"It doesn't help that Apple's newly introduced Apple TV, designed to send movies wirelessly from the home computer to a TV, has met with criticism for having poor resolution and offering access to movies only through iTunes. 'In the music business, [Jobs] made a confusing situation simple,' says Abe Peled, CEO of set-top box software maker NDS Group, which is 72%-owned by Rupert Murdoch. 'With video, he is trying to make a simple solution difficult. People don't need one more box on top of their TV sets.,'" Burrows reports.

MacDailyNews Take: "People don't need one more box on top of their TV sets," says a guy who sells software for non-Apple set-boxes who may or may not be worried that Apple's box won't be added next to his box, but instead replace it. Thanks for the newsflash, Mr. Burrows. Why don't you just post Abe's press releases verbatim next time? We know, we know, that'd be more work than you put into this article. And Apple TV is capable of high resolution, it's Hollywood and/or Apple who have to bring the high def content to iTunes. Don't incorrectly blame the hardware.

Burrows continues, "Of course, Apple could always adapt to a new paradigm in music or video distribution, but it may well require a greater degree of cooperation than Jobs will abide. Says a media titan who recently approached Jobs about exploring ways to work together but didn't get far: 'Steve doesn't want partners.'"

Full article here.

[Thanks to MacDailyNews Reader "Navy Tim" for the heads up.]

MacDailyNews Take: "Steve doesn't want partners," says one guy — sorry, nameless "media titan" — who perhaps had nothing of value to offer? Apple seems to partner perfectly well when they want to do so (examples: Disney, O2, CBS, Fox, AT&T Wireless, Google, etc.). Have fun trying to find "experts" in Burrow's report who "say Apple will need to improve relations with the folks who create the content." We can't find any "experts" in Burrows' article, unless, if by "experts," Burrows means "Apple's competitors and spurned suitors." The one independent-seeming fellow in Burrows' article who might be labeled "expert," eMarketer analyst Paul Verna was quoted as saying, simply, "Everyone is flexing their muscles to prove they don't need each other. But the truth is, they do."

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Jan 14, 08 - 05:03 pm Comment from: Jay-Z

He is correct when he says people don't want another set top box, at least with respect to some people (like me). I would love for Apple to add digital-cable compatible DVR capabilities that seemlessly integrated recorded TV with iTunes. It would be an improvement even over TiVo, especially if they worked out a deal with Open Cable that worked around the copy protection sent over digital cable signals. These signals cripple features like TiVoToGo.

Apple has said in the past that it's not interested in moving into the DVR space, but it would definitely be a way to get more of a hold in video.

Jan 14, 08 - 05:04 pm Comment from: Gilles

At least, he sees that Apple's products are "peerless".

Jan 14, 08 - 05:05 pm Comment from: REALTORben

Who is the "media titan". I would say MDN, not to assume because they didn't publish his name that he isn't someone that is big. It could be the president of Paramount for all you know.

However, it is more likely that it is somebody from a small independent studio.

However, Apple should play nicer. They do a very good job at cooperation, don't get me wrong. But it wouldn't hurt them to bend a little. I would rather pay $4.99 for an episode from NBC than have to go to Amazon to get the same thing for $1.99. It is more convenient for me to use iTunes than it is Amazon's stupid "Unbox".

Maybe playing just a little nicer would have kept NBC on iTunes (though at a higher rate).

Whatever, I guess it doesn't matter because Everyone (including me) loves everything apple is doing, so forget about the other guys.

Jan 14, 08 - 05:07 pm Comment from: Jimithy

I agree that people don't need an additional box (or a new mess of cables) attached to their TVs. As it is right now, I only have an Xbox 360 attached to it, which I use to watch DVDs, and stream my iTunes, iPhoto, and video content to my TV from my Mac (via Connect360)

The only way I think Apple could turn an Apple TV purchase from frivolous to sensible is to allow people to replace an existing living room device with it. Perhaps by incorporating a DVD/Blu-ray player for instance.

Although being able to use it to stream rented movies may be enough to entice me.....

Jan 14, 08 - 05:08 pm Comment from: Zune Tang®

"Apple may need to play better with others"

Is this really news? Same old story, different day. AppleTV sucks and Windows Home Server rules. End of story.

More importantly, did Britney make it to court today?

Your potential. Our passion.™

Jan 14, 08 - 05:10 pm Comment from: Mike

REALTORben,

Sorry, but you lost me when you said you'd rather pay Apple $4.99 for what used to cost $1.99.

If Jobs let pricing control go for NBC, it'd all go to hell in a handbasket instantly.

Jan 14, 08 - 05:12 pm Comment from: R2

The guy is right about the extra box.

If the Apple TV had DVR capabilities, coupled with the iTunes movie rental service, I could get rid of my DVD player/recorder.

Jan 14, 08 - 05:18 pm Comment from: G Spank

Rupert Murdoch is an ass

Jan 14, 08 - 05:21 pm Comment from: Randian

G Spank, GEORGE SOROS is an "ass without peer."

Jan 14, 08 - 05:25 pm Comment from: bizlaw

Apple is somewhat flexible; however, Apple has a very distinct vision of where it wants to go and what the consumer market is. Apple has earned a reputation for not working with third parties, and most often, Apple has been proven correct – Mac OS X, iPod, iTunes and one price songs, the iPhone model (which is attempting to be copied by phone manufacturers now), etc.

Where Apple will show its flexibility is in the world of video content delivery. This is an area where multiple tiered pricing has virtually always existed, and new products are now available to muddy those waters (buying single tv shows, music videos, etc.). What remains to be seen is how well Apple can convince the content providers that it's vision is what consumers want. As we have seen time and time again, these huge studios (music or movies) are not always very flexible or willing to listen to new ideas.

Hence we see remake after remake, sequel after sequel, teeny bop band after identical teeny bop band.

Jan 14, 08 - 05:34 pm Comment from: Allan

MDN --- take your nose out and wipe your faces. Apple does need to do better at relationships. Jobs said this himself at the D5 event where he and Gates were interviewed together. He said is wished Apple had the relationships that MS has. Apple has a "we don't need any help" mentality. Hopefully this will change.

Jan 14, 08 - 05:39 pm Comment from: Oh Puhleeze!

Ya gotta luv the tech writers, they have such short memories. Where was all this 'air of cooperation' with Apple when Micro$oft was king?

Very few companies of any kind (software, hardware, media, I could go on) wanted to work with Apple in any way, shape or form. Those few that did were either bought by Micro$oft or run out of business all together.

Look at Sony (as an example). If you bought a DVD from a Sony-owned studio and wanted to access the 'extra features' on it, you needed a PeeCee and Windows Media Player. Have you forgotten the CD's that for a short time wouldn't even PLAY on a Mac (unless you had a black marker wink

It's no accident that Micro$oft's decline started with the advent of OS X. They had no 'agreement' in place to COPY the innovations as they did with OSes 7-9. Thank God, Steve had sense enough to stop being the research arm of Micro$oft. I shudder to think where both Apple and Micr$oft would be if Steve hadn't assumed the reins and the 'leadership' of Apple continued to hand over innovation after innovation to Micro$oft just to continue to get Word 95 with minor and infrequent updates.

Even Adobe was in the process of abandoning Apple (if you didn't see it coming I've got some waterfront property in New Orleans to see you). I really wish Apple would come out with a full-blown image editor and force Adobe to keep up with and program for the Mac.

These tech writers are the same ones that said Apple was insignificant, should stop copying Micro$oft (what????) and should just do the 'right' thing and become another box assembler and software writer for Micro$oft. It's a good thing Steve doesn't listen to them and 'has a reputation for not geting along' with the status quo.

Jan 14, 08 - 05:49 pm Comment from: TowerTone

Isn't Peter Burrows related to Dick Butkus? No? Ok....

Jan 14, 08 - 06:05 pm Comment from: Steve516

It's all about the dollars. Folks didn't want to play with Apple back in the 90's because they couldn't make any dollars from it. Today, Apple's hard work and innovation has captured a good chunk of the market, and consumers love Apple. Apple is making money by the bucketload. And they have done it their own way, in their own style, and time. Now they are supposed to bend over and let these other companies have a slice of the pie? Give me a break. I for one like the fact that Apple is seen as "hard to deal with". It means my software doesn't crash, and my hardware is reliable. Sure I paid extra, but I get extra. And if that means Apple has to be extra nasty to the vultures, then fine, I'll pay extra for that too. Let them all squabble.

Jan 14, 08 - 06:06 pm Comment from: Mac_Atty

Take off your Mac Tinted Glasses... this article is basically on point... Apple does need to play better others... look how they burned Motorola with the iTunes Razor or how angry the Music lables and artist are with iTunes dominance. I'd rather pay more for products and content if I have too if it means Apple remains viable. However I'd hate to see a backlash against Apple for its practices. I for one, have already began buying more and more content from Amazon, as I suspect many of you have. I also suspect in the next 2 years, we'll see a significant drop in iTunes market share as people become more familar with services like Amazon, etc.

Jan 14, 08 - 06:12 pm Comment from: Justified

@Allen,

The key is "meaningful partnerships."

See MacWorld Boston 1997 Steve Jobs keynote for direct reference.

Jan 14, 08 - 07:03 pm Comment from: DRM sucks

Allan: "He said is wished Apple had the relationships that MS has. Apple has a "we don't need any help" mentality."

Well, in terms of media distribution, the MS "relationships" mostly are MS rolling over and offering to do whatever the content providers want, eg giving them a cut of Zune sales.

I believe you have misconstrued Apples position. For media distribution, it is "we don't want to use your ridiculous pricing schemes". The content providers have proven that they want to gouge consumers for inferior products in order to maintain their other distribution channels.

Apple is simply trying to sell the content in a manner that <<gasp>> actually considers what the consumer will pay.

Mac_Atty: "..look...how angry the Music lables and artist are with iTunes dominance"

This has nothing to do with Apple "not playing nice". It has to do with the fact that Apple was the only company that rolled out a service that consumers wanted to use. Apple has tried to get rid of DRM - maybe the labels should be angry at themselves for being stupid. If they had "played nice", iTunes would not have succeeded. The anger over iTunes market share should be directed at their inability to develop a serious competitor via one of their super-duper partnerships. The Amazon download store suggest that this may finally change.

BTW, I'm not sure what artists are "angry" at Apple's dominance except for those that own a label and want to stick to an outmoded distribution model.

Jan 14, 08 - 07:04 pm Comment from: MacMaster

@Mac_Atty

" .... how angry the Music lables and artist are with iTunes"

The music labels can kiss my @ss and we settled the other point weeks ago, Jay-Z is NOT an artist.

Jan 14, 08 - 07:12 pm Comment from: Reclaimer

BusinessWeek: "Apple may need to play better with others."

Oh, you mean like Microsoft does now?

Give us a break.

Jan 14, 08 - 07:32 pm Comment from: Oh Puhleeze!

@ Mac_Atty:
".. look how they burned Motorola with the iTunes Razor or how angry the Music lables and artist are with iTunes dominance."

You must be one of the journalists I spoke of having a short memory. Motorola got what they deserved after Apple let them in on one of their prized possessions (the iTunes ecosystem) only to be burned by MOTOROLA who reneged on a promise to build a low-power, high-performance chip for Apple's Macs. Motorola then bent over backwards to accommodate Sony and Micro$oft with a chip for their gaming platforms. And it was the Rokr (not the Razr) that was first offered by Motorola and by all accounts (even the press) it was a piece of sh*t! You would think they would have learned something from their association with Apple and would have built something someone would find useful AND aesthetically pleasing.

Next time, know what you're talking about before you tell someone to take off the "Mac tinted glasses".

Jan 14, 08 - 08:03 pm Comment from: Mac4lfe

All the other electronics companies play nice with each and as a result they seem to produce pure shit for products. Apple on the other hand makes quality products because they don't have to play nice with some other company that does not have the consumers best interest at heart.

Jan 14, 08 - 08:24 pm Comment from: Big Al

All these losers, including many posters here, telling Apple how to run a business.

That's rich, I must say.

Look at the company. I think Steve is doing quite well, thank you very much.

Jan 14, 08 - 08:27 pm Comment from: me

MDN are you defending AppleTV again? I hope Apple pay you by the hour.

Jan 14, 08 - 08:34 pm Comment from: Hubris

Yeah, you tell 'em! You're saying the same things I told Steve. "Steve, baby, you can trust me. I'm the Prez's personal consultant."

Jan 14, 08 - 09:14 pm Comment from: troll feeder

More importantly, did Britney make it to court today?

By this time next year, MacWorld 2009:

Apple: 20% PC market share, iTunes is huge in video.

MS: major "restructuring" after a year-long profit collapse.

Britney: dead.

Jan 14, 08 - 11:43 pm Comment from: aergern

Randian, Why did you post " GEORGE SOROS is an "ass without peer." " I find this to be way off topic while saying that Murdoch is an ass is within bounds since he IS a media mogul ... while Soros is not and does not control movies, television and radio stations.

If you want to inject political bull**** into a conversation .. please go elsewhere.

Jan 14, 08 - 11:44 pm Comment from: ken1w

Apple is great because it doesn't play by all the established rules. However, it does play a "game." Apple's game looks several year further out than most of the other players, to define new markets (or redefine poorly established ones). The others play the "me too" game, which Apple specifically avoids. The others also play the "feature count" game, which Apple also tends to avoid. For those reasons, it is unlikely that Apple will release an "all-in-one" do everything set-top box. Instead, it will try to make Apple TV and iTunes into a solution that meets many of those needs.

Jan 14, 08 - 11:52 pm Comment from: Bitjockey

Apple has had to fight for every inch of their existence since the companies inception. They know how much a bad relationship can cost them and they have little patience for small talk. Apple has flourished with little help from the business community or the press by simply making a better mousetrap and letting folks with open minds make the right choice. Their brash behavior is not just aimed at their business partners. It extends to their employees and their customers as well. Yet it seems when you unravel each story of rude behavior on Apples part you uncover a logical business decison at its root. 'Lets all get along' is a wonderful human concept, but stifles innovation and efficiency in business.

Jan 15, 08 - 03:27 am Comment from: Emil

"And Apple TV is capable of high resolution, it's Hollywood and/or Apple who have to bring the high def content to iTunes. Don't incorrectly blame the hardware."

God damn it! Stop protecting Apple's shortcomings! It does NOT support trueHD and hence it's useless. It does NOT support XviD/DivX so all the movies you already have aren't playable on it.

The appleTV sucks ass, mac mini is the only way to fly!

Looking forward to the keynote grin

Jan 15, 08 - 05:44 am Comment from: clyde

Sorry, but I'm going to have to not partake of the kool-aid on this one. Apple TV is the least successful of its recent products out there, even Steve referred to it as a 'hobby' instead of a 'business'. And a lot of it has to do with what was mentioned in the article. I don't want another box to watch stuff on iTunes that a) doesn't replace something else and b)costs 3-400 bucks.

Either put in at least a DVD optical drive or DVR capabilities to it, and let me plug in an external hard drive using USB for storage. As it stands, AppleTV is a 'close, but no cigar' product.

Jan 15, 08 - 05:46 am Comment from: clyde

And you know, Apple could always adopt an 'embrace, then extinguish' approach with the product. They could get the content on the boxes, and then see their negotiating power increase with the content producers as more and more people flock to it.

Jan 15, 08 - 08:06 am Comment from: Richard Prince

Yes, I agree that people don't need another box on top of their TV or in their media stack. What would it take for Apple to change AppleTV so that it is not a box added but a box that replaces? Not a partnership with companies that go to the extreme to limit the abilities of users to control, timeshift, and use the content that best suits their lifestyle.

In a nutshell, the AppleTV needs to be able to capture and record content from a variety of sources. Become a DVR. Add a small finger-sized receiver, digital converter like the EyeTV to the AppleTV and a software interface for recording broadcast, cable and digital video signals as well as convert old analog signals to digital. And possibly add a drive (blu-ray or combo) that allows users to convert the DVD collection and store it with their other digital media and that's it. Simple.

I suspect that one of the major things holding Apple back from making AppleTV an insanely great product of managing media is the partners in the movie industry who do not 1) want users to be able to copy their current DVD to digital and 2) do not want Apple to give users the ability to do basically what the VCR did in its day - timeshift content by recording and storing it.

Jan 15, 08 - 08:54 am Comment from: Bizarro Ballmer

Sounds like they may have started with the price of movies to buy in iTunes. No way I'm paying movie studios $14-16 for a movie and wait to download it and not have a DVD case and...
meh, you get it.

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