Henry Ford and iTunes

End of July I made a side trip to visit my brother George who lives near Detroit. From Detroit I went on to New York to attend the 50th reunion of my high school class.

George and his wife. Carolyn, took Hazel and I to the Henry Ford Museum. Naturally a substantial part of the museum was devoted to the auto industry. I almost just wrote "its rise and fall" because within the exhibits and the placards were the seeds of present day Detroit's decline.

Henry Ford was not the first to try mass production of the automobile, but he was the first to standardize. His motto to give them black resonated through the entire process and was instrumental in the early success of Ford. Cars became affordable and more reliable. General Motors recognized that the consumer wanted more then black and marketed a range of models that gave the car buyer a choice. A choice coupled with mass production. By 1920 GM had wrested major market share from Ford.

I found it ironic that GM, the company that championed giving the customer a product they wanted, is now in market and financial trouble because they lost sight of that truism. They, like many companies, tried to drive the market to what they wanted to produce (and provides the most profit) so that sooner or later its nemesis, in the most original meaning of the term (nemesis: the spirit of divine retribution against those who succumb to hubris - hubris: to indicate overweening pride, self-confidence, superciliousness, or arrogance, often resulting in fatal retribution) initiated its downfall. GM got greedy. Not everyone wanted SUV's and the potential for that market failing was shown during the oil shortage of the 1970s. Sure they had a good run for awhile but in the hundred years or so of their existence, a short run. The seeds of decline were evident as far back as late 60's. There were many that wanted a small economical car that had decent reliability. VW came first and then the Japanese. Each whittling away at that market. The Japanese have continued to recognize its importance, the importance of giving the consumer a choice.

Last Thursday's issue of the Wall Street Journal has an article about iTunes and how it is making some artists (and label executives) unhappy. iTunes simply gave the consumer want they wanted, the ability to buy singles instead of CD's often containing one or two good songs and the rest a rehash or bundle of garbage music. Hooray for iTunes. I am a fan and a loyal customer because Apple recognized and gave me what I wanted. The RIAA is still seething and some labels (e.g. Atlantic records) have pulled some music from iTunes in an effort to pressure Apple - in effect rollback the clock.

The poor label executives, managers and artists are upset that iTunes, with few exceptions, requires that songs be made available separately. I can accept that in a some cases the artist may want to keep their music as one piece of work. Mozart, if he were alive today, may have felt that way. But I strongly doubt LL Cool and 50 Cent are of that persuasion. Yeah, I know some poor groups like The Eagles are realizing a few million $ less than in the past. Never the less, I suspect they are still well compensated.

The industry is twisting in the wind. A long deserved position. Apple sells 90% of the digital downloads and that has some like Kid Rock's manager crying iTunes is a "part of the death knell of the music business." They stupidly try to stuff the genie back in the bottle (like Atlantic Records). Goliath iTunes has them by the short hairs though and efforts thus far have failed. I'll bet they are even trying to lobby congress for some sort of antitrust action to squelch Apple.

Apple has a mindset, however, that will likely be its undoing. It likes to dictate the terms even when doing so may not be in their long term best interest. I've always thought that Apple could have been Microsoft if instead of trying to bundle their software into a pricey computer system had sold their operating system to run on pc's.

For now I enjoy the specter of squirming Music Labels. My hope though is that the competent artists, not at the top of the charts, are realizing decent income (not buckets of money) from their music.

So for now, Toyota and Apple are up, Ford, GM and RIAA are down. Works for me. Funny how providing the product that consumers want seems to lead to success.