Apple could become most powerful record label in the world with Dr Dre, Jimmy Iovine onboard

“This won’t be the first time someone suggested Apple could start its own record label. But with Dr. Dre and Jimmy Iovine, two music industry heavyweights that have built some of the world’s biggest record labels rumored to be getting creative roles at Apple, it’s interesting to imagine what influence Iovine and friends could have on Apple’s approach to content,” Jordan Kahn writes for 9to5Mac.

“If Apple is ever going to move on from simply being a music distribution hub taking its 30 percent cut to a record label of sorts fostering, promoting, and investing more in artists, Iovine is as good as it gets,” Kahn writes. “Having built Interscope Records, the label behind some of the biggest artists of the last 20 years from Dr. Dre to Lady Gaga, Iovine’s real expertise is building labels, growing artists and selling music.”

Kahn writes, “I’d imagine if Apple were to start a record label of sorts it probably wouldn’t be a lot like a traditional record label. That is, perhaps the goal wouldn’t be to invest in developing artists in order to sell downloads and ticket sales, but rather to invest in artists to differentiate iTunes and its streaming companion from the competition.”

Read more, and see the photo illustration, in the full article here.

[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]

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  1. While I can see the attraction of Apple having it’s own label, how would such an arrangement be view by regulators ? It would be quite a monopolistic business. Also, how would other labels react to having to deal with Apple as a rival label as well as a distributor ?

    I can see the appeal of this idea, but I can’t see how it could be allowed to happen.

    1. So long as Apple isn’t giving preferential treatment to its own property, and negotiates fairly with the other labels, I’m not sure it would be that much of a problem. I mean, think about it like this: Hulu and Netflix are both distributors of others’ content, yet they’ve gotten into the business of creating their own content as well. And in creating that content, they’ve managed to draw more interest (and more money) to their service.

      That’s basically what Apple would be doing, if this person is correct in his guesswork: adding their own content along with everything else they sell as a way to drive sales for iTunes in general. Besides, while iTunes is certainly the first source I think of for music, it’s not the only game in town.

      I don’t see Apple doing this (anytime soon) because it’s straying very far from what they’re best at, but … it may also work out brilliantly if they ever do go down that road.

      1. The flipside for Netflix (don’t know about Hulu) is that they don’t usually carry the latest stuff from others, i.e. TV shows are a season behind, movies trail the disc/online sales release by months… if ever. For example, where are the Lord of the Rings or Harry Potter movies, two of the most successful franchises? And there’s already been stories about studios punishing Netflix with higher fees and more restrictive license costs after they started making their own content.

        It’s not just Apple giving preferential treatment to their own stuff and negotiating fairly with others–others have to negotiate fairly with Apple, too. And the dinosaurs in the RIAA and MPAA never like when newcomers stomp on their turf.

    2. Also, how would this play out with Apple Corps, the Beatles’ record label? Is there some restriction in the agreement between the two companies that would prevent Apple from entering the music business as a record label?

        1. Yes, there was…er maybe. I believe the agreed restrictions came to an end when iTunes got the Beatles catalogue. I remember an article discussing just this premise and the conclusion was that Apple could, if they wished, own a label.

        2. No, there isn’t, so long as Apple doesn’t sell physical copies of music with the Apple logo, which they don’t. It’s a complicated history of legal disputes going all the way back to 1978 and continues to this day, but as near as I can understand from the convoluted history of legal decisions and agreements, the only restriction remaining is on physical distribution of Apple-branded media.

  2. With this move, Apple has provoked quite a dust-up, with pundits, fans, even Tibetan hermits emerging from their caves to add to the clamour. Apple could forget to put out the garbage and make headlines.

    1. No doubt. There’s never been a single obvious Apple objective or move that hasn’t baffled the buffoons and this one is exactly vintage Apple thinking, big time into the future.

      iCal the small no minded pundits and analists again on this one.

  3. Well, look at the reality. Hardware can be designed around, copied or innovated beyond over time.

    So what becomes unique? The “User Interface”, “Ecosystem” and “Content.”

    A TV channel deal is next. Content & content delivery & ease of use.

  4. And Apple could become the biggest and most successful movie studio if it would purchase Vivid Entertainment and crank out high quality porn for the masses of the world. So many opportunities for Apple. Just take a bite of the Apple. It’s so easy.

  5. I would like Apple to break the mold of the label. Provide a platform for recording and distributing music but leave the promotion and managing to others.
    Musicians get signed up to draconian deals that place them in debt for the long term with ridiculous fees. If Apple can offer a fairer way for bands to develop and sell their music then that set a new pattern for the business.

  6. I’m still not convinced on the $3.2 billion price, but I do like this potential idea of revamping the music industry.

    However, for non-hardware related items, I feel this is at best the fourth most important issue for Apple to address. This does make me feel hopeful that Apple is similarly willing to spend a substantial amount of money and effort to do something really disruptive with some of the other areas that it is too dependent on others, such as with internet service providers.

  7. really apple getting into record label business now? seriously? apple should stick to what they are great at and stop wasting time on this industry – an industry where its economics have gotten worse over the past decade.

    so many case studies of this very typical management mistake. charlie mumger talks avout this alot.

  8. Apple was paying the highest streaming rates of anyone while the labels let upstarts like Rdio and Pandora get the juiciest rates around. Time for some comeuppance.

    Apple actually has the cash flow to pay artists what they deserve. And now with the new execs, they have the cultural power as well.

    This is not a double standard by the way. Apple has always tried to negotiate with the record labels in earnest. Now that the labels tried screwing Apple with subscription negotiations, Apple had no other choice but to come back with this timely counter.

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