RUMOR: Disney to buy stake in Apple’s iTunes Store, could be preface to iTunes Store IPO

“We are hearing some chatter this morning about Apple Computer (AAPL) that we can’t confirm, but found interesting nonetheless. The rumor is that Disney (DIS) could buy a stake in AAPL’s iTunes, which could then be a first step towards an iTunes IPO. This is a new one to us, and this type of AAPL/DIS rumor could be motivated by the fact that Steve Jobs will be on the DIS board following its acquisition of PIXR. Some of the initial feedback we heard on this was skeptical, so again, just passing this one along,” reports.

Full article (paid subscription required) here.

[Thanks to MacDailyNews reader “J Alex” for the heads up.]

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  1. because it would be STUPID. iTunes works because different content providers feel it is a neutral/fair platform for their sales. The moment it looks like iTunes is under the control of one of them, the others will pull their products. Why would Apple take that chance? What’s in it for Apple?

  2. someone with a degree in business and stock market ology, could you please explain this in more detail? How does Disney buying iTunes give it an IPO? Disney buys a portion of Apple, is it just the iTunes music store, or it the music division? It seems stupid for apple to sell the whole music division, where iPods live but if that’s the way it’s divided up now does that mean that’s the way it has to stay divided if it goes to Disney? So then Disney owns the iTMS orthe music division previously known as Apple’s, so then they set it up as a subsidiary and sell off 49% of the stock because Apple and Disney don’t have enough cash? This isn’t making any sense to me.

    It makes even less sense when one considers that no one can do as much with the content store as Apple can. I don’t think it is all worked out to point that they can just hand it over to a content provider to fill it up. Plus what happens to the content from other studios? Will they want to play ball with the Disney iTunes store or will this lock iPods into a store that Disney controls? That would be a worthwhile lawsuit. Would they have to open the iPod up by licensing Fairplay?

    I see no benefit to Apple in in this, unless Disney pays far more than the division is currently worth or Disney is going to load it up with as much of their content as possible right away and still allow other content to get in easily and effectively, which seems like a lot to ask of a corporation that in some ways used to have a monopoly, and to a lesser extent still does.

    There are just so many questions. Anyone have any answers? Anyone have any other questions?

  3. Jay, the thing is that for Disney to purchase a stake in the iTunes store (and not simply the whole of Apple, which they can do at any time) Apple would need to incorporate the store as its own entity (even if it is still under the control of Apple). Incorporation is necessary for an IPO, so it could be seen as a first step. A public sale could also be a good way for the investors (Disney and Apple) to get a large return on their investment.

  4. Wonder if their are investors other than Disney (like Universal or Warner)?

    An IPO would mean Apple owns x% of iTunes and the public at large can buy shares in y% of it.

    Now, put this rumor in the context of the Apple Corps lawsuit, ‘cuz that’s the only thing that makes this rumor make sense.

  5. So much for the idea that DRM is in the music ONLY because the RIAA wanted it. No Steve Jobs has found out that DRM is not about protecting content, its about vendor lock-in.

    I, for one, no longer purchase music through iTunes. I will not own any more DRM laced music. If CD’s go the way of the dodo bird, then I’ll just listen to what I already have.

  6. Jeff, that attitude is just based on ignorance. Been buying iTunes since day one and never ran into and DRM limitations. I burn my disks, I can re-rip them if I choose. The DRM is there just to keep the casual bootlegger from sharing their files.

  7. I think, if this happens, it has something to do with Apple Records suing Apple computer for getting into the music business…. think, if Disney buys iTunes and spins it off from Apple, who do you think will run it? As far as I know there is nothing that says Mr. Jobs can’t run a music empire…

  8. “[…] put this rumor in the context of the Apple Corps lawsuit, ‘cuz that’s the only thing that makes this rumor make sense.”

    Agreed. Apple may have some inkling that they’re going to lose that one and are preparing for the post-lawsuit world…

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