No no no no no

Er, excuse me for blurting out my first reaction but have you lost your mind? An Apple takeover of Vivendi Universal Music will inevitably be a disaster. Much as I love the cat-among-the-pigeons potential of a tech counter-strike deep in the heart of showbiz-land, we now have decades of evidence that mega-mergers like this one almost always destroy value (and sometimes wipe out the merging businesses).

Here’s an idea: resist the mechanical logic of a merger – “we got a platform, they got content” – the kind of logic that produced AOL/Time Warner. Leave Vivendi Universal to dispose of its music division to some old school media mug and spend that cash pile on technology, design and marketing – stuff that will more directly produce high margin sales which is what a 2% market share luxury goods player like Apple needs most. Thanks to Jack Schofield at Online Blog for the the link.

1 comment

  1. Mmmm vertical integration doesn’t seem the answer, and music is in freefall decline in terms of sales. Record companies are recognising that they are merely marketing machines and banks providing loans through “A&R”. WSJ has a good article on this here http://online.wsj.com/article_email/0,,SB10502665304500000,00.html

    Whats also interesting is it isn’t just the consumers who make the music companies money – their licensing divisions are the new growth centres. Zomba made ?M’s from licensing Moby’s Play album on Ads worldwide….which drove more consumers to buy Play – but its not just the marketing that licensing helps with, its pure cold cash. The Sunday Times wrote a good article yesterday on this ( it was a long train journey….)

    http://www.timesonline.co.uk/printFriendly/0,,2-533-639950,00.html

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