Tuesday, June 23, 2015

(The Big Disrupt) Interview: This Week In Startups Talks to 3D Robotics Founder Chris Anderson

Check out this great interview by This Week In Start Ups as founder and host Jason Calacanis talks to former WIRED Editor-in-Chief and 3D Robotics Founder and CEO Chris Anderson about his company, drones, and much more. 

(The Big Disrupt) Apple: Why Apple can bend the knee to Taylor Swift and still win

So Apple, the big Cupertino based leviathan that permeates modern culture almost as much as it does the consumer electronics market is brought to its knees by Taylor Swift is the prevailing narrative you’ll read just about everywhere on the internet but, as in most cases, the truth is much more complex and interesting than meets the eye.

While Taylor Swift’s public objection to Apple’s plan to not pay royalties to artists for three months was the straw that rather large and intimidating camel’s back, it was the public outcry small indie and labels artists registering that brought it to a fever pitch where Apple would have no choice but to address the shortcomings of a plan that might have put some indie labels out of business.

While it’s quite a feat that one of the most powerful companies on the planet backpedaled so quickly and publicly on its plan because of a Tumblr blog from a prominent artist, the sad truth is that Apple can afford can back down from challenges from artists and indie labels as, for them, the stakes are not high enough given the sobering fact that the company comfortably makes in a quarter what the music industry makes in a year.

This large disparity between the scale of Apple and entire music industry gives a certain whiff about Apple Music’s launch that suggests that Apple’s only taking on the music industry just to see if they can be as dominant as they was with iTunes back in the early 2000’s and, given Apple’s ridiculous cash and talent advantage over just about every player in the music streaming market, only a fool or a clairvoyant would bet against them.

The only real reason Apple were able to make music executives kill the album and give birth to the singles driven music market we have today back in 2003 and are very likely to dictate terms to industry once again is that the music industry has never truly been able to control or own the means of how music was distributed or disseminated which has left the industry ripe for disruption since Thomas Edison invented the phonograph in 1877. The problem of how music was distributed and/or disseminated became more pronounced in the download era and now with streaming which has made this long term industry problem even harder to ignore. Say what you want about Tidal but the artist owned streaming service represents the best step the music industry has taken to control how music is distributed or disseminated for decades which, unfortunately for the music industry, too little, too late.

Because of this lack of control over how music distributed or disseminated, music fans, writers, artists, insiders and executives have had to dine on steady diet of books and articles that wonder out loud as to what new company, app, software, device and/or visionary will save the music industry or gives us culprits to vilify (usually major labels or naïve ambitious tech companies like Spotify who make the mistake of thinking they can save an entire industry) every time the industry contracts in record sales but not in the demand for great music.

With every generation this long term industry problem gets worse and doesn’t look like it’s going to get better and as long as it persists, innovative last mover companies like Apple with the deep pockets and talent to capture markets will always be able to control how we get to listen the music we love.

The real losers in this equation is almost always going to be artists who find themselves getting screwed by their labels who license their music to Apple for large fees and are nickeled and dimed by streaming companies who, in most cases, are forced to do so because of the large licensing fees they have cough up to labels to host their music.

In sum, while Taylor Swift, indie labels and other indie artists can take heart that Apple backed down under pressure but, in the end, Apple can bow down to every artist in the Billboard top 100 and still come up trumps because they have the ultimate ace in the hole: the music industry short termism which has given innovative companies from Edison Speaking Phonograph Company onwards a chance to dominate an industry that can’t see the blood on the leaves and realize that it’s theirs. 

(The Big Disrupt) Interview: Stanford Business School talks to former NYTimes Executive Editor Jill Abramson

Check out this great interview by Stanford Business School with former New York Times Executive Editor Jill Abramson as she talks about her experiences at the newspaper and gives her take on the future of journalism

Friday, June 12, 2015

(The Big Disrupt) Interview: This Week In Startups talks to Helen Greiner, Founder CyPhyWorks

Check out this great interview by This Week In Startups as founder and host Jason Calacanis talks to Helen Griener, inventor and founder and CEO of drone robotics company CyPhyWorks.

(The Big Disrupt) Apple: Prediction - Apple Is Going To Bring The Music Industry To Heel, Again

Everybody knew at some point Apple would get into music streaming business when they bought beats music last year thanks to the decline of the download market and the rise in use of music streaming services such as Spotify and Pandora and with the release of Apple Music at the end of this month, Apple is in a great position to quickly gain a dominant market position.

While there are some unattractive elements of Apple's music streaming offering such as its social media offering for artists to connect with fans (need we run through the gamut of alternatives where artists can and already do this?), Apple can fix these kinks quite quickly thanks to the cash and talent advantage it has over just about every player in the music streaming landscape.

While the current players in the music streaming market have reacted rather positively to Apple getting into music streaming, you can't shake the nagging feeling that music streaming executives across the board are racking their as to how they’re going to tackle a company that has the money, prestige, talent and intent to dominate their music streaming in a relatively short space of time

Rivals like Spotify has a big head start with its 60 million subscribers (15 million of them paying subscribers) and, unlike Apple's new offering, has an ad supported free tier which gives them the chance to convert free users into paying ones. However, given the cash and talent advantage Apple has over all its music streaming competitors it can quickly make up for lost time as while Spotify can raise a lot of money to help generate growth or at least combat its current inability to make money, Apple can eat initial losses accrued from its new music service longer than Spotify can. Apple can do this because they have cash to burn and, crucially, music streaming isn't their core business so the stakes aren't as high for Apple as they are for Spotify.

Apple also, worryingly for competitors, have the ability to be the last mover in the music streaming market much like Amazon was for online book selling and Google was for search engines. This is more than likely to happen as Apple's cash advantage means that they can offer larger royalties for artists and a much larger licensing checks for record labels who own their artist's music.

However, the biggest advantage Apple has out the gate is its ridiculously large customer base which could make Apple the kings of music streaming in one fell swoop as Pandoras' David Holmes pointed out "Apple alone already has 800 million credit cards on file. And if it convinces just 4 percent of these cardholders to pay $9.99 a month, the company would singlehandedly double the total amount of streaming revenue made in the US last year"

All this might not frighten music executives as so far they have negotiated the music streaming market an awful lot better than they did the download market when then Apple CEO Steve Jobs virtually browbeat the entire industry into killing the album and fostering the single driven digital music market that's still prevalent today.

As content owners, Labels this time round are in a better position than they were in back in the early 2000's when the industry as a whole was pretty much clueless as to how to deal with online piracy and, to some degree, still are. The rise of music streaming services has given record labels serious leverage over how music is distributed as streaming services weakened the need for consumers to download music illegally as they, much like iTunes did a decade ago, provided a much better experience than the "illegal" alternative. 

Labels have ruthlessly used this leverage to, for the lack of a better word, extort money out of music streaming services (particularly Spotify) to the point that their music licensing costs outstrip their other costs combined. Their leverage is also why most music streaming services don't make money despite reporting double digital revenue growth group year on year and Spotify, who pay more than most, gets their name dragged through the mud in the press with stories about low artist payouts.

Labels even used their advantage against Apple as they're the reason why Apple Music is priced at $9.99 a month instead of the $5.00 a month Apple planned to enter the market with and made negotiations run as close as they could to Apple's big announcement. However, labels may come to rue how they have used their leverage as content owners as explained earlier, Apple can quickly become their biggest licencee of its content and maybe five years down the road, might be the only game in town or at least the only game worth entertaining.

Tech companies are notorious for aggressively negotiating prices with content owners and creators when they have leverage over how content is distributed as Amazon's infamous clashes with book publishers and Apple's famous negotiations in the early 2000's with music executives have shown and should Apple dominate the music streaming market, expect more of the same. Apple, surely none too pleased that their plans to compete in the music streaming market were leaked twice leading up Tuesday' release, would surely love to get payback after music executives were  damn near dismissive about Apple Music and patting themselves on the back for driving a hard bargain.

However, despite the efforts of labels, the music industry looks like it's going to be one of the few industries in the world to disrupted twice by same company as Apple are determined regain their position as the kings of the digital music market once again and with their vast resources, you can only pity the fool stupid enough to bet against them.


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