Posts Tagged ‘Tablet’

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Apple Tablet and Higher Music Margins

July 27, 2009

Very interesting story in today’s FT about Apple working with the four major record labels and launching a tablet computer.  It’s interesting because it suggests Apple’s famously tight-lipped new product development process may have sprung a leak.  But it’s far more interesting because it is another reminder that Apple is operating on a level above most others when it comes to making money from information – in this case, music.

Newspapers are struggling with the concept of charging for content, with a few good exceptions, such as the FT and New York Times.  By contrast, Apple – having already cracked the making money part – is struggling with the far more noble challenge of driving up margins for online content.

The music industry appears to have struck a good working relationship with Apple, whereby they collectively work to improve their money-making potential.  Even if Apple were to take a larger slice of the fee for delivering higher-value interactive music packages (including album art and sleeve notes), everyone wins because the pie itself is getting bigger.

And to turn that on its head – since Apple is investing in new hardware, surely it has earned the right to a greater slice of the income for its efforts.  This sort of relationship between a technology developer and the music industry highlights what could be achieved in newspapers – if only the papers themselves would start collaborating over paid-for (or even ad-funded) delivery of portable e-news.

Watch out Kindle, or Apple may use its experience in the music trade to beat you to the punch with its new 10-inch tablet, which would be perfect for catching up with the latest news.