BusinessWeek cover story: Steve Jobs’ Apple could own ‘big chunk of the digital-entertainment market

“Just as the Mac revolutionized the computer industry, Apple is once again in the business of changing the world. This time, it’s the world of music. Its diminutive iPod, which can store 10,000 songs in a device smaller than a deck of cards, is the most radical change in how people listen to music since Sony Corp. introduced the Walkman in 1979. Then there’s Apple’s online music store, iTunes. It was established only after Jobs became the first person to persuade all the major record labels to make their music available — legally — on one Web site. Since late April, 30 million songs have been downloaded from Apple’s store, and the trend may one day spell the end of the compact disk. “[Jobs] is a real visionary, the kind who can change industries,” says Jimmy Iovine, chairman of Interscope Geffen A&M Records, a unit of Universal Music Group,” Peter Burrows reports for BusinessWeek.

“That’s industries, plural. Over in Emeryville, Calif., 50 miles from Apple’s Cupertino headquarters, Jobs’s other company, Pixar Animation Studios, is turning the movie business on its ear. The company’s latest flick, Finding Nemo, was the No. 1 box-office hit of 2003 and roared past Walt Disney Co.’s The Lion King as the highest-grossing animated hit of all time. That gives Pixar an unprecedented five blockbusters in five tries. (Remember Toy Story and Monsters, Inc.?) And it gives Jobs tremendous leverage as he renegotiates Pixar’s contract with embattled Magic Kingdom boss Michael D. Eisner. For the past nine months, Jobs has been pressing Disney for a bigger cut of the profits from its films — and perhaps much more. With Eisner on the hot seat, Jobs is likely to get much of what he wants… What if Pixar asked for exclusive rights to offer digital downloads of its films? If Apple ever created an iMovie site, such flicks would be a powerful draw. Jobs has another advantage: Apple already has the most popular site for watching movie trailers on the Web,” Burrows reports.

“Add it up, and this may be just the beginning of a brand new Steve Show. For years, Jobs’s perfectionist approach to product development has been experienced only by Mac users. But now, massive changes are roiling the worlds of entertainment, computing, and communications, giving him a broader stage. Increasingly, content — that magical lifeblood of movie studios, record labels, and publishers — is being transformed into digital form. At the same time, the Internet and wireless networks are evolving to deliver those bits almost anywhere, at speeds never before possible. Couple all that with disk drives, semiconductors, and high-resolution displays that are growing ever smaller and more powerful, and technology is liberating entertainment from its past. How we watch movies, look at photos, listen to music, even read a book promises to change profoundly in the next decade,” Burrows reports. “No one may have a better chance to make order out of this chaos — and then profit from it — than Jobs.”

Full article here.