From a recent collection of business headlines at Yahoo Finance:
“Free — and legal — music
Universal Music Group has licensed its digital music catalog to a new Web site offering
free legal downloads. The site — SpiralFrog — plans to make money by
selling ads that will appear as songs download. The deal shows how
desperate record labels are to adjust after fighting online
file-sharing networks that let users swap songs without giving the
industry a penny. Universal — the world’s largest record seller —
will get a payment up front and a cut of SpiralFrog’s ad revenue. Any
arrangement is fine, a Universal executive said, “as long as we get
paid.””
Buggy Whips
In the movie “Other People’s Money” Danny DeVito stars as a finance guy that makes money by buying distressed companies and selling off the peices. In addition to being funny and just a little bit heartwarming, it is also has tremendous lessons about economics in times of change.
In the climax of the movie, he is asked to speak to all the employees of a company he is about to dismantle. They are understandably furious that this man is destroying their lives so he talks about buggy whips. He describes a company that used to make the finest buggy whips known to man. A company known far and wide as a success. Until the automobile.
With the arrival of a new age, the company had two choices: they could work even harder to make better and better buggy whips, or they could reinvent themselves (either corporately or individually) to serve the new market. His conclusion is that it’s his job to push them all to change to their new market too. The people are stunned, but he’s right (there’s a great happy ending, btw).
The major labels are still making buggy whips and punishing anyone who drives a car.
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