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About this siteFor six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul Friday, July 30, 2004Apple vs. RealBubble: "Apple is committing a massive strategic error. We know that iTunes as a distribution channel generates little revenue for Apple - it's iPod sales that are the cash cow. So why is it worried about Real? Apple's worried that Real's access to the iPod will limit it's ability to sign even more suppliers (labels) to iTunes - and as this happens less and less, Apple's ability to exert monopsony (aka a single buyer) power over them is broken. That tells us pretty clearly that Apple's unspoken strategy was to leverage iTunes into the distribution channel for digital audio, and, eventually, when the market grew and their monopsony position solidified, flip the onerous terms of the licensing and royalty agreements demanded by the labels around."How very Microsoftian (and correct). There's also a follow-up post to this article that might be of interest. [ Posted at 10:44 AM | Permalink ]
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