Apple might buy Universal Music

The LA Times says Apple (i.e. Steve Jobs) is seriously considering buying the world’s largest record company, Universal Music.

People close to Jobs say he is convinced that the music industry is about to turn a corner in the copyright war. With the government shutting down pirate Web sites and the record industry now going after individuals for alleged piracy, the Apple chief believes digital theft will become increasingly more complicated, prompting fans to migrate to legitimate services, sources said.


I normally think this kind of consolidation destroys shareholder value. After all, Sony and Time Warner have found nothing but negative synergies in their music divisions. But Jobs can probably add more value to Universal Music than anyone, and Apple’s focus is probably more on consolidation of its (tenuous) position than any sort of monster growth trajectory.

I hate that Apple might take its eye off the ball of building better computers and improving OS X. But I love the idea that they’re developing a new music service and feel strongly enough to about it to own a record company. Apple is already refocusing on the consumer computer market. This will hasten their transition to becoming a consumer electronics company.

I don’t know if Apple can do it. But this is the best hope we’ve had in years that the music industry could overcome its innovative inertia.

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