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Apple Computer Reportedly Offers $5 to 6 Billion for Universal Music Group

A number of web sites are reporting that Apple Computer is in talks with Vivendi Universal to buy the Universal Music Group. Apple is reportedly offering between $5 and 6 billion for the company that markets the music of 50 Cent, U2, Shania Twain, and Luciano Pavarotti. According to the article:

Defying conventional wisdom, {Apple Computer CEO Steve Jobs} apparently is betting that music is finally on the verge of becoming a profitable presence on the Internet. Apple has been quietly testing a service that some music business insiders believe could pave the way for widespread online distribution of songs.

People who have tried the service, expected to debut by the end of April, say it makes downloading and purchasing music as simple and non-technical as buying a book from Amazon.com. It allows users to buy and download songs to their computers with a single click and to transfer the music automatically to their portable MP3 players.

If a transaction like this were to take place, imagine the huge changes that it would cause in the entertainment industry. Think also of the implications for the personal computer industry.

A deal between technology and entertainment companies may be what is necessary to pull the music industry out of its steep decline. But, the changes that would have to be made to the music industry would go beyond the way music is distributed. The entire recording company management, record production, and musician promotion processes would have to be re-engineered. After all, Sony hasn't solved the problems with its record business, and it's a technology company.

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