I was reading a post by Scott Karp dubbed “Is Content Still A Business?” and was struck by his claim that creating content is fast becoming something you can’t make money from. It sounds very true, and it flies in the face of the old media industry that still believes that content is king. Take for example Michael Eisner, who just launched a new company to create video content for the web.
I especially liked Karp’s claim that “Apple’s iTunes is not really a platform for selling music but rather for selling hardware.”
I’m wondering if that’s sustainable. After all, business have been moving for a long while towards a model that underprices the expensive hardware in order to sell you lots of perishables at exorbitant prices. HP sells printers for peanuts, but makes billions in profits from ink. Gillette tries to get you to buy their razor so it can make money selling blades, and Sony started with the Walkman and then TVs, but later bought into the media business to profit from the perishable content you use on those devices.
Now the idea of selling music in order to promote the hardware that plays goes wonderfully against the grain.