Two weeks ago, I blogged that Apple was picking fights (then Sony) that it had no business picking. The latest go-round now is with big publishers over how to sell subscriptions on the iPad and iPhone. Naturally, Apple wants to dictate terms and extract its 30%. Whereas bullying the music industry was pretty easy and, one could argue, justified, with these content producers, its a tougher argument and a tougher settlement.
In music, you could credibly argue that Apple made the digital music industry. Before Apple came along, things were fractured, to say the least. Apple unified a market, created a great experience, strong-armed the labels…and deserves to share in the fruits of its success. With books, newspapers and magazines, it’s a different case.
- These players had well-honed approaches and strategies before Apple came on the scene.
- These players are much better politically-connected than the music people who, ultimately, are small and don’t influence politicians very much. Magazines and newspapers: bigger and, oh yeah, that political clout.
Not surprisingly, therefore, the Justice Department and the FTC are said to be looking into Apple’s business practices. Wow. That didn’t take long. Apple announces something on Tuesday, on Wednesday Google launches a competitive offering (taking only 10%) and on Thursday there are rumors of government involvement. If that didn’t tell you Apple picked the wrong fight this time.
We’ve seen what government intervention did to IBM, AT&T and Microsoft over the years. We’re seeing Google’s challenges now. Welcome to the party, Apple. I reiterate my position that two weeks ago could have been Apple’s zenith.