“‘Shark Tank’ investor Kevin O’Leary said on Tuesday that he wasn’t excited about Apple Music from an investor’s perspective,” Reem Nasr reports for CNBC.
Nasr reports, “‘To me the whole thing is a giant nothing burger. Who cares? Even if they owned all of the streaming companies with all the features, it wouldn’t make a difference to their income statement,’ he said in an interview on CNBC’s ‘Squawk Alley.'”
Nasr reports, “‘Show me moves that protect and grow my dividend in Apple,’ he said. ‘This is not going to be material while I’m alive.'”
Read more in the full article here.
MacDailyNews Take: “Oh, the myopicity!” we exclaim in a chorus of our best Herb Morrison impressions.
It’s the ecosystem, stupid.
The ecosystem sells the devices, stupid.
The device sales fuel your beloved dividends, stupid.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]
SEE ALSO:
Something about Apple Music betraying Apple’s brilliance by ignoring ‘The Harry Potter Theory of Marketing’ or some such nonsense – June 9, 2015
Bob Lefsetz on Apple Music: What team is Jimmy Iovine on? – June 9, 2015
Apple Music’s huge advantage over Spotify – June 9, 2015
Apple Music is a major mess and it won’t beat Spotify or something – June 9, 2015
When Apple Music arrives, what happens to iTunes Match? – June 9, 2015
What Apple Music says about how Apple views musicians – June 8, 2015
Apple’s revolutionary Apple Music just might prove its skeptics wrong – June 8, 2015
Apple unveils revolutionary Apple Music service – June 8, 2015
Sells the devices? Then why Android and Windows compatibility?
Why Android and Windows? How obvious does it have to be? They get the music, they start to like Apple, and like so many of us over the years, they are hooked. Their next purchase is Apple. MacDaily nailed this one.
My nephew brought home an iPod at Christmas. I said what is that? I listen to one song and while listening to the second, I ordered one online. When my Razor phone broke, I knew the iPod worked well, so I got a 3G iPhone. That worked so well, on day one I got an iPad. Windows continually screwed up so when I saw Parallels doing 90% of what I needed, I bought an iMac. Now, I run one needed windows app in “coherence mode” and my windows exposure is minimal. I’ll NEVER spend another dime on a Microsoft product again. I’ll never have a phone that isn’t Apple. That’s dividends for you.
Music? I spend $200 a year on iTunes. Haven’t bought a cd since the iPod. Never spent a dime on music anywhere else online.
“It’ll even work with crappy Windows PCs and Android phones eventually (not that those are likely to be Spotify’s paying customers, but whatever, some of them will join Apple Music and maybe even graduate to Apple devices because of it).” — MacDailyNews Take, June 9, 2015
In part, to get the music companies to agree to it.
Yep, this is all about keeping the music companies happy and not giving any other company a big enough opportunity to challenge Apple as the hip company with kids.
As long as Apple’s service is good enough to prevent someone else from being dominate in music, that’s enough for Apple. They don’t need to control that part of the market. But keeping the record companies happy is hard. I bet they forced Apple to make it available on Android to put pressure on Google to make a good deal.
No doubt part of the early conversation was that Apple’s addressable market would always be smaller than Spotify’s and Pandora, which are on multiple platforms, so Apple had to fix that.
Why Windows and Android versions, Fear of Law Suits.
Plus, why not pickup and extra 10, before microsoft does.
microsoft is deploying to linux, OS X, iOS, Android OS…
“microsoft everywhere!”, seems to be new battle cry out of redmond.
by the way:
el capitan is not a cool os name, this is truly sad, rather call it eleven.
I really hate that Greedy mentality – I love it when Apple does something that is good for the consumer rather than thinking about the bottom line. – I still think that they will make a tone of money off of this especially since people typically don’t buy music any more. I do hope that the artist are being paid fairly for this..
These greedy investors are real pricks. Apple doesn’t really need these people at all. They’re like leeches. Apple never depended on these pricks to grow to the size it has. I honestly never knew companies were built for the sole reason to please investors. It used to be enough that a company was profitable to please investors. If these guys think Apple sucks then why does Amazon, a company that barely makes any profits at all please investors so much.
Is Apple really only supposed to do things that improve the bottom line for just a few investors? I would think the millions of consumers they please would be far more important than just a few greedy pricks. That kind thinking is really too selfish. He’s only concerned about himself. Apple Music may not pull in a ton of revenue but it’s still filling in some empty spots. I wonder what O’Leary is expecting Apple to do to duplicate iPhone revenue. These investors that Apple attracts prove themselves to be real jackasses.
You’re using the word ‘investors’, when what I think you should be saying is ‘speculators’. A speculator is pre-occupied with the short term and wants to see instant improvements, on the other hand an investor is looking longer term and understands that sometimes it’s necessary to do things that will be a slow burn initially, but will make a very positive contribution to the success of the business in the future.
“This is not going to be material while I’m alive.’”
We could solve that issue quick!
MacDailyNews Take: “Oh, the myopicity!” we exclaim in a chorus of our best Herb Morrison impressions.
It’s the ecosystem, stupid.
No, its the stupid music system
The ecosystem sells the devices, stupid.
The music system is still stupid.
The device sales fuel your beloved dividends, stupid.
So, stop wasting time with Iovine and the bullshyters and fuel device sales, numbskull
O’Leary has a reputation for being shortsighted and greedy.
This is going to have a giant Halo effect – yes, even with Android and Win people and will drive people to Apple. Sales will increase, user loyalty will increase. O’Leary will lose – and remain an egghole forever.
Just remember O’Leary got rich selling crappy CD-Rom games for PCs at Staples in the 90s.
Actually that didn’t make him rich. It barely generated any revenue at all. He got rich when a dumber company than his bought him out because “the future is all computers n stuff”.
And this guy is a legit investor? Putz.
A fool and his money are soon parted.
iTunes on Windows introduced me to Apple. Now I have 4 Macs, 4 Apple TVs, two iPads, an Apple Watch, an Airport Extreme an Airport Express
Apple Music on Android is far overdue. But this fall, will be complaining about how dominant Apple is. Apple Music for Android plus the Move to iOS app is gonna KO Samsung
I wonder if he would say the same thing about all of Google’s “free services”. Look there is always downward pressure on hardware margins, by cultivating services like this it helps to offset that pressure. Apple is going to be worth a trillion dollars soon, how much is this guy worth?
I’m guessing it’s because there’s no money in trashing Google. The stock doesn’t react, and the media doesn’t care because there’s less click value.
Hmmm I said the same thing when the iPod came out and look where it has taken Apple over the past 10+ years! I feel the same way about Apple Music so here’s to hoping I’m wrong again!
Leverage, leverage, leverage.
Developers, developers, developers.
Leverage, leverage, leverage.
Much as I’ve dumped on the Music presentation…
I read stuff like this from what amount to financial game players and either laugh or sigh. These people don’t know anything important about business, the point of capitalism, the development of technology, the betterment of the customer, on and on, basic economics and creativity concepts.
They just want their game tokens. Fork over the game tokens. Little kids playing Monopoly in the big kid world. They act like they’re the boss of the room, if not the world. But in the end, they’re ONLY game players. If they can’t see outside their little game world, what exactly are they ‘WORTH’ in real life terms? Beats me! They’re sad and lost people as far as I’m concerned.
Try putting your game tokens to work improving THE PLANET, not just the score board in your head, poor child.
Not that I agree with his viewpoint, but really? What’s your net worth compared to Mr. O’leary’s?
Lost, aren’t you.
Maybe… but what exactly was your point?
I’ve read too many pieces (by people who never run a business, haven’t got a dime to their name, etc.) criticizing business people/investors for not knowing business. Business people/investors who make more money in week than these critics make in a lifetime. So… who is it that really doesn’t understand business?
I was under the impression your post was one such piece… obliqely equating O’Leary with being a financial game player. Was I mistaken? Maybe I didn’t get your point, or maybe you didn’t communicate it that well.
Enlighten me, please.
I made my point. But it’s a bit like trying to explain colors to someone who’s colorblind. I speak from the point of view of a biologist (among other things) who works with natural systems and who has studied a bit about game theory and anthropology.
One approach is to consider what we humans are: The next, substantial, level up from the apes. We are creatures made and evolved (yes) as part of the natural world of what I call miracle planet Earth, our only home. Our behavior is fundamentally based upon our living and surviving within the environs of our creating planet.
The base of what we call ‘business’ and ‘finance’ is the fundamental human behavior of SHARING. No sharing means the hinderance of successful human social behavior and therefore hinderance of human survival.
Placed on top of sharing, over time, has been a series of human made game systems that take our fundamental human behavior and refer to them using a series of SYMBOLS. Obviously, money is merely a symbol of value, among other attributes we assign.
Where we are in the current age is fundamentally lost in maximizing the game play within this abstraction, this game system of business and finance. We have, as a species, been trained to lose track of both the HISTORY and the POINT of why we created this game system. Therefore, we end up with people, such as the typical Scrooge McDuck moneybag game victim who cannot see the foundation of the game. All their thoughts and aspirations are wrapped up in playing with game tokens. Everything about the success of human social behavior as well as human survival is lost. Therefore, I call these people LOST.
Next level: How does the rest of miracle planet Earth view our human behavior? It terms of natural environmental cycles, we look like narcissistic, delusional, juvenile, isolated, ignorant and incredibly insecure. We have evolved social systems that HIDE from the natural world and therefore become at odds with and detrimental to that natural world.
Conclusion: We’ve isolated ourselves from benefiting both our species and our only home. We are out of touch with what is real. The more someone is obsessed with the game tokens, the less in touch they are with this real world that made us, sustains us and will kill us if we break its natural systems.
That’s a super quick smash fly through of what I’m talking about. It’s nothing new! I’m just pointing it out as I am apparently more in touch with the situation than most of my species, thanks to training, experience and some degree of talent.
Whether this makes sense to you is in part due to my communication skills and your ability to read the communication and understand its meaning. That’s another level of relevant thinking.
If Apple was still thinking about the ecosystem why did they kill Aperture? I bought a Mac Pro due to wanting to run Aperture faster and more efficient. Then they announced Aperture’s demise. That whole move has seriously effected my trust in Apple. I’m now on to other software, all of it that works on non apple hardware. Who knows, maybe someday I’ll be back within the Windows system. All because Apple killed Aperture. I was a huge, huge Apple zealot. Now I’m just a fan, no longer coaching others as to why the MUST buy Apple. I know for certain I’m not the only one and that can’t be good for Apple in the long term.
Did Apple remove Aperture From your computer? No, they didn’t, so you can still use it.
Fckn’ Stupid.
100 countries multiplied by only 1,000,000 people is 100 million users. Average subscription per user with the Family Plan included is probably around $5 a month. Multiply $5 a month by 100 million users and the revenue generated by Apple Music should equal $500 million a month or $6 Billion a year within the first year. In three years there could easily be 500 million users generating around $30 Billion in revenue.
In addition, Apple Music will be a better experience on Apple devices. For example, it will be controllable via Siri. This means the native/core Apple Music experience could compel an additional 20 million Android users to purchase iPhones every year. This is an additional $13 Billion a year. Plus, new users to the ecosystem increase other revenue catagories like Macs, Apps, Movies, Apple Watches, iPads, etc. So, 20 million switchers could equal another $100 a year or $2 Billion in revenue.
This is all just a WAG, but the point is every ecosystem enhancement, no matter how large or small, increases the quality of the user experience and the bottom line.
Very optimistic. Might want to revisit Porter’s 5 Forces again.
Based on the MDN poll, not quite that many people are interested in renting music. Also, since Apple is the laggard in coming up with a music rental service, a significant percentage of kids who are dumb enough to sign up for subscription-based music are already happily using one of the competitors. Switching from one streaming service to another is not always easy, since the profiles that you create for your Big Brother DJ don’t transfer. So every switch becomes 3 months of teaching the new electronic DJ what music you can’t stand and what is acceptable.
Finally, the way Apple has been treating its longtime users of pro apps like Aperture, how limiting and flaky iCloud is, and how quickly Apple pulled the plug on Ping, i for one am not about to jump in whole hog with any new Apple software or service. Wise people will take their time to assess it before renting tunes from Apple.
Long story short, Apple has a long way to go to rebuild credibility in the music industry. iTunes today shows that major music labels are the only ones the Apple highlights, and Apple is doing a poor job of supporting podcasts and other great tools for new media discovery. The forced U2 album, one of their worst ever, was just tasteless marketing desperation. I don’t believe for a second that Andre and Iovine have anything new to offer that isn’t already available elsewhere. Why Apple cast its lot with these overpriced has-beens is beyond me. Apple needs to fix iTunes and let people own their music. Stop dumbing down iTunes!
1. The user has nothing to lose. They can test drive the service for three months at no charge. If they don’t like the tailored recommendations then they can try another service or continue using what they have been using = may the best curation/platform win.
2. Let’s say there are 100 million people that are currently part of a streaming service. iTunes has something like 800 million accounts (just a WAG) and maybe 30 million of those 800 are streaming on a service. So, there is still a significant base of Apple customers that don’t stream, and that is a huge opportunity. Price it at $15 for 6 family members and I think they have a winner.
O’Leary must have said “nothing burger” at least 10 times. He sounded extremely whiny and greedy. The what’s-in-it-for-me whine. The kind of person you want to just punch in the face on principle.
It was on CNBC, pretty much the bottom of the barrel for Apple news.
He kept repeating ‘nothing burger’ because he wanted to put that sound bite out and get it reprinted. It’s a standard way of manipulating the media.
These money men are so blind it’s almost laughable, everything has to be a single straight line between profit and loss, no lateral thinking at all despite the fact that you only truly generate future profit long term by that lateral thinking predictable companies inevitably whither. Why do they never learn when the evidence is so conclusive
I read O’Leary’s book.
he gloats that he made his money in Softkey the cut rate software company by copying software, changing it just sufficiently to avoid legal issues.
For example he got people to copy Fonts and then just change the heights, widths etc by fractions and change the name.
That’s Kevin O’Leary.
He’s a smart tough businessman but he only cares about money.
Still he’s not as smart as Apple, since he made his money in Tech what’s his companies worth vs Apple?
in O’Leary’s book he describes meeting Steve Jobs.
At that time Mac was struggling and he wanted to blackmail Jobs into giving him money so that O’Leary’s company would continue to write Mac software.
Jobs kicked him out of the office and told him never to come back. O’Leary said about Jobs “he’s one tough bastard”.
There is definitely still a chance that Apple’s purchase of Beats Music will turn out to be their biggest mistake ever. It is very hard to imagine how Beats Music could even conceivably have been worth the absolutely stupendous price of $3 billion.
Apple lost much more in simple currency fluctuations in a single quarter ($3.74B) than they spent on Beats. And unlike the currency fluctuation, Beats actually returns some value. Whether or not they actually recoup the entire $3B, it’s not a big deal.
I’d rather hear mark cuban’s take on it TBH.
Remind me not to trust this ‘investor’ with a single iota of advice.
It is going to make a difference to everyone else’s Income Statement, and, what the hell is Shark Tank? But if a Nothing Burger is as good as Seinfeld was being about nothing, I’ll take two with extra cheese, Kevin O’whoever I’ve never heard of, and will never hear of again.
Mmm, nothing burger. I’ll take two with a side of sliced apples and a coke, please?
MDN–i agree w/ your takes nearly 95% of the time–consistantly. On Apple Music I cannot. While I will concede that AM is not a “nothing burger” it is, however, a huge sh#t sandwich w/ extra nuts.