Adam Jackson at GigaOm recently ranted on why he's scared of Apple and Amazon and the coming content cloud. He gives the usual reasons: corporate control. Locked-in content. Potential business failure and content loss.
But why the focus on Apple and Amazon? It's not their fault that iTunes and the Kindle store have DRM'ed content.
Adam needs to be ranting at Time Warner and Viacom and New Corps and Bantam and Random House. It's the studios and the publishers who are hanging onto the old models, much as the music studios did earlier on.
It's the studios and the publishers who demand that their precious content be locked down and protected from their own customers.
Actually, when you get right down to it, it's the studios and the publishers who're afraid of the cloud.
The iTunes store accounts for a mere 6% of Apple's revenue. In case you're bad at math, that means that 94% of their revenue comes from selling hardware: iPods, iPhones, iPads, and Macs. Cheap, easily available content helps Apple sell hardware. That's their bread and butter.
Not netting all of twenty cents on a single music track or TV show rental.
iTunes store revenues in the previous quarter were on the order of $1.5 billion. Not bad. But when the studios and publishers take 70% or more right of the top, you're now left with $450 million. Not as good, but still not bad.
But now subtract administration costs. Development costs. Server infrastructure and bandwidth costs. And suddenly the pie gets quite a bit smaller. Apple wants people to buy content from iTunes, sure. But they want to make sure they're doing so from iPads and iPhones and Apple TVs.
iSuppli reported that Apple makes $250 per iPhone. That's one device. Just one sale. To match it, Apple would need to sell or rent 1,250 songs or TV shows.
So don't rant at Apple. Rant at the studios and the publishers. Tell them you want DRM-free, device-independent content. Tell them to get off their well-cushioned behinds and to get with the program.
The music industry did it. So can they.
It won't be comfortable. It won't be easy.
But it's necessary.
[GigaOm]