Apple vs. everyone – who controls the market iTunes or suppliers?

Implications: Apple has a very simple outlook on content delivery, music 99 cents, video $1.99. But the owners of the content want a different compensation package. The war has started in earnest.

Analysis: Mr. Jobs has on a number of occasions made statements that he knows best on how to price content, etc and what the price will be. It appears that NBC Universal has taken the first shot at trying to break open the monopoly created by Apple towards the industry. Apple came back by saying it would not carry NBC TV programs. Apple needs content to keep iPod sales going, at the same time they are telling the studios what they can charge. The studios need iTunes to sell product, but they are not willing to let the customer dictate prices. Apple seems to forget they are a customer and the seller can set a price and then you have a choice of taking it or leaving it. Should the end consumer what a better product they are willing to pay for it. Sears a long time ago sold the same product at three levels of quality and functions – Good, Better and Best. Apple could also be playing a very dangerous game should the Justice Department want to look into “price fixing” or “monopolistic” actions on the part of Apple. In the non-Apple market place you pay a different price for a different product, such as more for a Caddy than a Chevy, but in the Apple world you would pay the same price no matter which car model you wanted. In the Apple world all suppliers must charge Apple the same price. And in this case the suppliers are even different companies, the products can be very different from a ten year old 30 minutes I love Lucy to a three hour movie. What if the other suppliers join Universal in refusing to renew their Apple contracts? Apple would not longer have content and we would watch iPod sales slide down very fast. While this article believes Apple will have to hold out, but it could very well be a very bad move for Apple.