Ashkan Karbasfrooshan

Is It Time For Apple and Microsoft to Buy Music Labels?

ET - that's why we write. And trust me, you probably have a higher regard for the labels (mgmt) than I do.

Thomas - Schmidt must having such a blast being one step ahead of MSFT after his experiences at Sun and Novell. Karma in full swing. Apple/Google? Maybe this calls for a "Should Apple and Google merge" article?

Just kidding, I think.

Is It Time For Apple and Microsoft to Buy Music Labels?

Et, no worries re: typos.

You are aware, that if I would have added an extra layer in terms in the profit and cost contribution of iTunes then the post would have been 3,000 words, right? Your breakdown was as long as my post!

The simplified answer is: Apple's margins are practically nil on iTunes, and yes, there are other costs but since a major argument of mine is that as unit sales increase, then *digital content* is practically all profit... We're not really talking about old style music publishing, I'm referring mainly to digital sales.

So to make things simple: I simply said: 2B unit songs sold x $1/song = $2B in revenue.
But to (my crime) make it simple, assume right now, Apple keeps 0%, so it's $2B in revenue that goes out the door. But if it owns it, and goes digital, then it would retain a large chunk of that revenue.

Again, this was a simple math exercise, food for thought kind of argument.

Yes, the post is called: "should Apple/MSFT..." but I also wrote "what is Wikipedia's valuation," it's a hook, all headlines have a hook.

You seem to be well versed in music, when Elton John sings The Bitch is Back, he's not talking about a dog, it's a figurative sense (all right bad one).

Seeking Alpha (this is NOT a knock) are the most literal readers out there!

Anyway, you do seem to have a lot of good insight into the music business. I'm writing a book called Context is King, talks a lot about digital music and why the labels flopped, if you'd like to chime in (something tells me you do), feel free to contact me.

Is It Time For Apple and Microsoft to Buy Music Labels?

The Seeking Alpha faithful never cease to amaze me.

If one is to say this is "rubbish," it should be based on "In 1991, the companies agreed to share the trademark of the term, Apple, but Apple Computer was forbidden to use the name in any use "whose principle content is music".

But, the companies entered a new agreement this year:
www.apple.com/pr/libra...

So I don't see why Apple's new-found economic muscle would not allow it to sign a new agreement.

*BUT*

once again, this article is 100% about financial engineering... it's (I hate to use the term) a "thought exercise" like when last year I said "What would Wikipedia be worth if it were a for-profit?"
www.watchmojo.com/web/...

I was not clearly saying Wikipedia should be a for profit... I was asking what's it value.

That's the angle of the blog etc., if you don't like it, don't read it!

Is It Time For Apple and Microsoft to Buy Music Labels?

ET, thanks for the rundown of how labels work.

With all due respect, I think you are missing the crux of the post.

This was more of an article on:

A) The debate of whether tech companies should own content because charging for software is increasingly hard in an open-source and free, ad-supported environment.

And if that is even worth considering... then a look at how:

B) With a little financial engineering, the move could be rewarded by the stock market.

Cheers

Ash

Is Apple Beginning Its Long Delayed Descent?

Surely you have all heard of the saying: "Arguing online is like the Special Olympics, Even if you win you're still retarded."

All right, that bit of political incorrectness out of the way, I think I should simply finish this day of insanity (which, if you knew exactly who you were dealing with, you'd understand was welcome...) with this:

Online publishing means that the more you folks bash me, the more Seeking Alpha will actually want to feature my articles. I have worked with MSN, AOL and Yahoo - and no, that does NOT make me any smarter than anyone, trust me - to know that the more you folks (the readers) talk about this, the more it encourages Seeking Alpha to keep featuring my posts.

So your valiant efforts to bash me are frankly counter productive to your goals.

That's that.

Moreover, perhaps it's a good time to mention that Seeking Alpha is an aggregator of blog posts from elsewhere. I never asked SA to feature my writings. A blog, after all, unlike a journalism site, is one's weblog. I had one bad experience with a company, and having studied the stock, and having written good and bad things about the company, felt that it was potentially representative of other companies that get to a point where they ley arrogance and greed get to them.

If you disagree with that, that's cool. But understand, it's an opinion. It's also a rant. I've written 1,500 posts - ranging from 100 to 10,000 words per post - in the past 15 months. Some are going to be more analytical than others...

But the point is: I am neither long or short in Apple, I am WAY long technology and media as a web entrepreneur, so I actually want Apple to do well... but much like Google is being arrogant, in my hunble opinion, I think Apple is being arrogant. So I wrote about it on my blog, a personal blog. I recognize that people read it, so I refuse to use profanities and write things that are libelous etc., but I can write about personal experiences and explore if they represent wider, macro level trends, no?

You - most of you - I imagine own the stock or are users, or like a few use or consult on Apple products so seeing me say anything bad about Apple makes you lose it... hence the fanatical comment... but in the end, I never once insulted Apple mgmt, staff, users, shareholders etc.

I wrote something on my blog about my experience, and you folks are accusing me of the most laughable things (a MSFT agent, having an agenda etc.) when the simple fact is: the more time you spend bashing me the more prone SA will be to feature my posts, because we generate more "average time on site" and more "pageviews per user" for them.

So, if you really want to send me and my writings into an abyss, then for the love of all things holy don't spend your precious time on this page...

And, remember, "Arguing online is like the Special Olympics, Even if you win you're still retarded."

Is Apple Beginning Its Long Delayed Descent?

DBM,

Having worked 18 months in and served 25,000 clients in customer service, I am fairly nice and diplomatic and basically understand that the person on the other end is a human being doing a job for a multibillion dollar company, so you have to be nice... I also know that CSRs can and have the right to hang up if a client goes nuts... so I am diplomatic.

Thursday when I called and spoke to:

- ?
- andrew
- rebecca
- jerri
- wendy
- steven

I was pretty cool, calm and collected because I just wanted some kind of resolution.

I only lost it today:

- richard
- eric
- mark

frankly, after Richard told me that I was now re-christened Bob Smith. I was having fun with it ("tell me, is this conversation actually taking place, or will it vanish into thin air like my call on thursday did") though I was certainly not smiling when I was saying that...

the point is, even if a client is wrong, you are hired to offer service. the only rule of CSR is you don't do what apple did on thursday, because for follow up calls, when the client sees that NOTHING was written down and you were basically told to f*** off, things will get ugly. that's like the only cardinal rule of service...

Is Apple Beginning Its Long Delayed Descent?

Then today I spoke to one Eric, a product specialist, who referred me to Eric, the "highest level" service person in Austin TX, who admitted that indeed, Steve did not take any of the info down and actually put in Bob Smith.

should be:

Then today I spoke to one Eric, a product specialist, who referred me to MARK, the "highest level" service person in Austin TX, who admitted that indeed, Steve did not take any of the info down and actually put in Bob Smith.

Is Apple Beginning Its Long Delayed Descent?

eyerhyme,

1st off: just because i am criticizing apple CS does not make me a MSFT fan, that's a red herring. i do not even understand why people assume i'm a mac hater? i made a comment on their service, based on my experience, for the love of all things holy.

as per this episode, i swear on anything you want that this is exactly what happened.

in hindsight, it was funny. the guy i got today took my case # and called me Bob. I said "I'm not Bob," and he said "Can I call you Mr. Smith."

I asked him who on earth is Bob Smith... he said that was the name attached to the serial number and case #.

That's when I knew that good ol' Steve (last person I spoke on Thursday) basically didn't do anything he said he would do...

Then today I spoke to one Eric, a product specialist, who referred me to Eric, the "highest level" service person in Austin TX, who admitted that indeed, Steve did not take any of the info down and actually put in Bob Smith.

I lost it... why, on earth, would I make this up? I am still waiting for the darn email "in the next 24 hours."

I will gladly give you both the case # and the confirmation # I got today after the call.

In the end, I spoke - Thursday and today - to:

- ?
- andrew
- rebecca
- jerri
- wendy
- steven

then today
- richard
- eric
- mark

this, for a stinking $200 device@#$!!#@$!#

You cannot make this stuff up...

Is Apple Beginning Its Long Delayed Descent?

jessehogie - amen.

in fact, it's always good to be humble in business. back in the 1990s, they asked Michael Dell what he would do if he would be running Apple, he said "shut it down and give back the money to shareholders," Apple is worth more than Dell today ($80B vs. $54B), obviously Apple's had many hits, but Dell has not helped matters either.

despite what some are implying (re: agenda, which is just looney, frankly), when i spoke to apple's staff today, i wondered: "has dell's hubris been passed on to apple?" it might sound crazy, but isn't google as bad as msft was a few years ago? everything is cyclical, history repeats itself, [insert next cliche here], i would not treat clients the way apple seems to treat at least some... one bob smith!

Is Apple Beginning Its Long Delayed Descent?

eyerhyme, I never said anything about Macs... I clearly was talking about the Airport Extreme and the level of service.

anyway, defend this folks:

when I spoke to them on thursday, they said: "sorry, we'll send over an email with shipping details in the next 24 hours," and gave me a case #.

24 hours came and went... so i called back today, thinking "all of these people defending apple can't be wrong, can they?"

so i called... and gave them the case #.

i guess the "holier than thou" attitude starts off with apple employees, cause they thought this was a big joke, the case # attached was to a "bob smith" (ironic, given my actual name), there was NOTHING included as notes in the case, and shockingly no email was sent.

Defend that folks. As shareholders, users, how can you possibly defend that?

Is Apple Beginning Its Long Delayed Descent?

Alex,

that's actually a great point. i cannot speak on behalf of seeking alpha, but the truth is that i grew up on the business week's, economist's, fortune's and WSJ, and I saw them miss every single stock/company implosion of the past decade (enron, andersen, wcom, etc.) because the writers are a bit too chummy and close to mgmt's inner circles.

your comments, frankly, are not directed so much at SA as they are to the bulk of blogs out there. on our blog (hipmojo), we write meatier articles than you find on most blogs, sometimes they are emotional, sometimes they are technical.

but the fact is, it (and all blogs) are complementary to marketwatch, smartmoney, fortune, business week, etc. and not replacements. the level of access reporters get is obviously different, but that means they cannot easily offend. mind you, we've conducted numerous interviews with CEOs, etc.

but the point is: no one in their right mind should view material from blogs as a perfect or pure alternative to mainstream media, but much like the 2003 war and 2004 elections demonstrated, the mainstream media has simply dropped the ball... so the need for alternative sources of information is considerable.

in other words, as an investor, i first check the mainstream media, but given that these are usually reporting on items after the fact or do not want to fully speak their minds, i balance it out with info from blogs etc. i also, sit down folks, talk to clients, customers etc. and in this post, i am the customer... there's no agenda!

if the argument is that I cannot paint a picture of apple based on one experience, then you cannot possibly conclude that what we write on our blog is light on financial analysis etc. based on the fact that this post seems to have offended the apple fans.

alas, all i know is that mainstream media is learning to be more open and get back to reporting in lieu to boosting for the sake of being on mgmt's good books. and that's a good thing.

Is Apple Beginning Its Long Delayed Descent?

Michael,

Is there something I am missing re:

"Presumably it doesn't fit *his agenda* to take account of the facts."

What agenda? The only fact I looked at, frankly, was a stock that has grown 10 times in one decade.

That's crazy talk... we are talking about Apple, right? For a second you'd think this is PNAC.

Is Apple Beginning Its Long Delayed Descent?

Richard Alvarado,

Re:
Q - "Did you update the Airport Extreme to the latest firmware?"
A - Yes. And my guys on Macs could only print, but not see the drive.

Q- It's a bit silly to say "by taking on product risk", since if you don't take on product risk there would be no iPod.
A - I never said all product risk is bad, quite the contrary, I just think that the stock is betting on an iPod-esque success for AppleTV or iPhone, and while the upside is priced in to the risk, the downside is not.

===

Reinharden,

In all fairness, "fanatical" in the context of users, is a positive thing; the fact that you assume it's a bad thing says more about you than me, with all due respect.

I never made fun of the person's name, I said I could not hear it, because the voice was becoming less and less audible...

Finally, I called Apple US and was transferred countless times from one dept. to another.

We can all say what we want, but the last person I spoke to, Steven, said that "looking at the log here, I realize we dropped the ball." Yet y'all can't see that?

Finally, my argument is not that service alone suggests a downfall folks, but at $80B+ market cap, for a hardware and increasingly consumer electronics company, it seems rich... and priced to perfection.

===

Robert Pritchett,

Indeed, yes, we use Macs at the office (as well as PCs), and one of the points was just that, that due to poor service I won't personally replace my PC with a Mac now... my loss, I am sure. And hence the cost of bad service. In the event that the iPhone and Apple TV fail to impress, then it might hurt Apple at its core products.

If none of you are willing to accept this risk (not a reality necessarily, but a risk nonetheless), then you are with all due respect blinded by your loyal devotion to AAPL.

I did not say Steve Jobs is crazy, nor did I say Apple users are going to hell.

It's a fine company, with admittedly superior products, but like all companies, its service could be better (at least in my experience) and the STOCK HAS HAD A CONSIDERABLE RUN UP AND IS PRICED TO PERFECTION, and hence risky.

C'est tout, why the personal attacks? Some of these comments make Karl Rove look like Santa Claus.

===

All to say, certainly, Apple certainly does not need a PR agency!

Cheers

Ash

Is Apple Beginning Its Long Delayed Descent?

Mr. Robinson, get the spelling right at least. It's funny how those who are Apple fans are more emotional that Apple critics. For the record, I am neither one nor the other.

Folks, I cannot speak for Seeking Alpha, but I'll say this about our articles (the one SA refeatured). We have articles here that are analytical, others that are commentary. A few are written in a stream of consciousness style, this being one, written after my phone call with Apple.

So if all you have to criticize is the writing, grammer or punctuation, then that says a lot about the merits of the post, no?

We have nothing against Apple (and use them at our office here), we even placed them in our Top High Tech/Web Stocks of All Time:

www.watchmojo.com/web/...

Read that, or others we have, and please tell me they lack research, and are full of incorrect facts.

For the most part, our our site, we let readers comment no matter what they say, and initially I was surprised by the intelligence, tact and thoughtfulness of commenters who read this first via MacSurfer.

Today I see it’s picked up by Seeking Alpha/Yahoo! finance, so before the deluge of “this sucks” comments, let me simply say: this article’s main point was that no matter how much brand equity a firm has, service seems to be sloppy, and that is a shame. That’s all. Verizon is not Apple, they are a telco; how bad service affects their sales and stock price is very different than how it affects Apple, or a bank, or a retail store.

Now, because our blog touches on investing, advertising, technology, we just pointed out that Apple needs massive hits, and that means they will probably take risks that they otherwise would not. By taking on product risk, they might put out clunkers (like the Apple Airport Extreme) and turn off potential clients for their core products. Translation: the stock, in my eyes, can keep going up, but having risen 10x in a few years, there’s downside risk. I am neither long or short Apple, it was a simple observation of that reality, or at least, potential.

That being said, keep the comments pertaining to how great or bad Apple is coming. Loyal, fanatical users indeed.