Some of you might have heard the rumor that Jay-z is starting a new music Label with Apple and Steve Jobs. For the fun of discussing, lets just say it is true.
Just as online flight purchasing rendered the travel agent obsolete, sooner or later, online music purchase will render music stores obsolete and with iTunes already the 3rd music retailer, they are well poised to become the leader in this new realm.
From Apple’s perspective, this could be perfect timing because within 3-5 years, except about 100 million people to have iPods/iPhones which can wirelessly purchase music over the air. So, not only can the user purchase music from iTunes, but they can purchase on the go. With Apple owning a label it gives them the ultimate flexibility in how they expose you to artists and how they get you to buy. This is something they are extremely good at. However, the only problem is getting artists to go completely digital. Enter President Carter.
With Jay-Z running the label, you have someone with unmatched credibility and clout to not only convince new artists to go all digital but also bring in already established artists. If fact, I think this benefits the artists more for a few reasons. Apple does not care much about music sales. Their money is from selling these devices. For example, on the iPhone, Apple makes over $250 from every purchase. You get 10 million buyers every year and you are making a quarter of a billion per year. So with this, am assuming they will be willing to give artists better deals than current labels do which will even convince more artists to go digital.
So as strange as this may sound, this rumor actually makes sense. And if you think Jay-Z is not used to hanging out with people like Steve Jobs, take a look at this pic.
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