For example, when Apple convinced the recorded music industry to sell digital downloads in 2003, it allocated 70% of the sales proceeds to the record labels and music publishers. One might suppose a business partner would be happy with a 70% share of incremental revenues, especially when that partner incurs almost no added cost. Perhaps they actually were smugly pleased with the deal originally. Maybe they figured Apple had been suckered into giving them more than twice as much as it kept for itself.
However, despite rapid growth at iTunes, industry revenues through terrestrial channels steadily dropped. In order to deflect responsibility, music executives needed an outside villain and gradually put the blame on Apple.
Their narrative holds Apple responsible for three false reasons.
One was that it unfairly "dictated" consumer prices. This complaint ignores the fact that retailers nearly always manage price tags in their own stores. Expressed more accurately, mark-ups are from the prices "dictated" by the supplier.
Another second fiction is that Apple destroyed the music album. In reality, inherent digital media capabilities deconstructed an artificial construct known as the CD. Consumers simply don't want to be forced into buying 12 songs when they only like two or three. As Will Rogers put it, "If I don't agree with you; well, why should I?" Like the cowboy philosopher, online retailers and consumers simply have a different perspective than the labels.
The final bogus complaint is that Apple earned excessive profits from the iPod, while leaving only peanuts for the recorded music industry. In reality, iPod gross margin percentages are probably less than half of the 70% share the labels and publishers get at iTunes.
More recently, other established industries promote the false narrative. For example, one stock analyst laments that the iPhone extracts value from wireless carriers and gives it to Apple. The complaint ignores that the iPhone has been a huge success for AT&T despite the carrier's own failings to meet bandwidth requirements. Prior to the iPhone, operators typically restricted smartphone access to a "walled garden" on Internet content. The iPhone convincingly demonstrated that consumers perceive no difference between a "walled garden" and a "walled prison."
Finally, the iBook Store announced along with the iPad tablet computer is offering publishers a generous margin together with pricing flexibility. As with third-party apps and digital music, Apple gives 70% of proceeds to book publishers. Furthermore, publishers can generally set retail prices between $13 and $15, as compared to the $10 price often set by Amazon. Presently, Amazon typically pays e-book publishers 50% of the price for a bound copy of the same book. It often retails the e-book for $10 regardless of the amount paid to the publisher. That means that Amazon is sometimes selling e-books as loss-leader promotions. Nonetheless, it does not let publishers "dictate" price tags applicable to consumers.
Video publishers should not let the phony narrative jaundice their opportunities with Apple. Unconfirmed reports suggest that Apple proposed a subscription service that would have permitted "The Best of TV" shows to be available via iTunes for a monthly fee. Apparently Hollywood turned it down to avoid alienating the CATV industry. If so, they failed to realize that CATV operators make nearly all of their profits from ISP and telephony service. As content providers demand ever-higher fees, CATV operators will abandon them and focus on ISP, telephony, and other non-content services.
When revisionist historians get involved, the future is more predictable than the past.