Steve Jobs—Entertainment Industry Impact

Steve Jobs_19175433

Steve Jobs is so much more than Apple's CEO .

He's also been Disney's largest shareholder, since he sold his wildly successful Pixar to Disney in 2006. He owns 7.3 percent of Disney's stock, some 138 million shares and he sits on Disney's board. (No word yet from Disney on whether he has any plans to take a leave from Disney's board).

But Jobs' real impact in the entertainment business is his innovation in content distribution.

First of course there's iTunes which Jobs created, and has arguably revolutionized the music industry. It's the most popular online music store with over 10 million songs; it doesn't just dominate digital downloads, it defines the space.

ITunes has sold some six billion songs since the store launched in 2003. Other players have tried to compete, but it's always been on iTunes terms, and when it comes to selling downloads iTunes has always won. (Rhapsody's streaming subscription music service serves a very different audience).

And just this month Jobs rewrote the rules of the online music business: now Apple is offering its songs DRM-free, with no restrictions on how and when songs are played. Not only does Apple control the devices on which we listen, the company also dictates the limitations of the content itself.

Apple has applied its same iTunes approach to movies and TV episodes. Its video business isn't as dominant as its music business, but it is gaining steam. Apple has a catalog of 30,000 TV episodes and over 2,500 films, about 600 of which iare in high definition. It was no small feat for Steve Jobs to convince Hollywood of the benefit of selling digital episode downloads online, and he continues to expand the range of this business. iTunes started out with ABC and Disney content (for obvious reasons) and now everyone from Viacom's cable networks to HBO and NBC are offering episodes through Apple.

Steve Jobs so dominates the rules of online distribution, his power has even sparked concerns in the TV business that Jobs could grow as much power in TV as he does in music. Jobs has defined the world of online music distribution and he's a major player when it comes to TV content.

When Jobs is on his leave of absence none of the company's existing contracts with content providers are in any jeapordy-- they stretch years into the future. But the question is about new deals-- if iTunes is negotiating additional contracts in the next few months, will the company have less power if Jobs isn't sitting at the bargaining table?

Questions? Comments?