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Links: Rip. Mix. Burn.
Posted by Paul Szynol on Friday, April 11 @ 13:10:40 EDT News
Apple is considering buying Universal Music Group for as much as $6 billion, the Washington Post reports.

If the deal is made, it'll be interesting to see what, if anything, happens to Apple's "Rip. Mix. Burn." rhetoric.

 
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Re: Rip. Mix. Burn. (Score: 1)
by JamesGrimmelmann on Friday, April 11 @ 16:03:46 EDT
(User Info | Send a Message) http://www.laboratorium.net
Such a deal would, among other things, be a nice illustration of the relative size and wealth of the computer industry and the content industries.


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Re: Rip. Mix. Burn. (Score: 0)
by Anonymous on Friday, April 11 @ 18:18:04 EDT
The trouble is that we do not know what the real numbers are, nor what the financial situation is.

1. Vivendi overpaid for many assets that they have not had the administrative acume to run effectively.

2. Vivendi borrowed to obtain these assets with high priced debt.

3. The music industry currently has a very real public relations problem that is hurting sales (how much no one knows).

4. With the World in a recession the theme park business is in a recession (imagin that).

5. Vivendi is not making their debt payments from operations, and they are under terrible pressure from the French Government to correct that situation.


Two years ago ther was a non-cash bid for Universal of 30 Billion dollars.

There is currently a non-cash bid for Universal of 13 Billion dollars.

Apple wants a steal, Vivendi is desperate to pay down high interest debt. Jobs currently runs two companies which, between them, has the 6 Billion in cash. With interest rates where they currently are, the cost of carrying Universal for the first year is very small.

Things we do not know.

1. What are Apples plans. This is important. I do not believe that Apple has the expertise to run Universal, but they may not intend to.

Universal may be worth more broken up, than as a single entity. Apple could already be negociating to sell the Theme Park portion of the business to a company that could use the assets and has the expertise to run them.

2. Apple may test the Napster theory. Release their entire catalog of music in MP3 (low quality) for free, and then sell the CD's for (say) $3 plus shipping (high quality -- ripable).

Many of the great groups of the fifties, sixties and seventies have never even been heard by todays young adults. What would the sales of these old albums be if you could introduce the current music purchasing audience to these groups.

3. Music sales where up while Napster was active, and dropped off after Napster was shut down. (yes I know it does not necessarly follow).

There are those that will steal music and those that won't. Forget those that will, if you put that library inexpensively into the hands of those that won't, what would be your sales (and revinues). I do not know, and nobody does, but I think the revenue stream could be colossal.

Just a thought.

Tom


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