11/07/2007, 2:45pm, EST
Wednesday, November 7th
Eisner: Apple hogs digital profits
Former Disney CEO Michael Eisner this morning said digital media distribution is currently at best a break-even business, and that Apple gobbles up most of what little money is made, according to a report from News.com. "[The studios] make deals with Steve Jobs, who takes them to the cleaners," Disney's chief explained. "They make all these kinds of things, and who's making money? Apple! They should get a piece of Apple. If I was a union, I'd be striking up wherever he is," Eisner remarked, presumably referring to Apple CEO Steve Jobs.
The executive went so far as to dub the ongoing Writer's Guild of America strike "stupid," saying that digital distribution will not become profitable for three more years and that the guild's request for a slice of the digital distribution pie just doesn't exist.
Eisner says in three years the business will start to turn profits, but for now the studios are likely only on board to avoid being left behind.
"The studios are there because they don't want to be in the transportation business and telling everybody that they're in the train business," he said. "They want to be in the entertainment business, and god forbid they should forget yet another distribution track."
Filed under: industry
Other story tags: digital music/video
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Second, he is saying that it's not fair that writers are asking for a percentage of digital revenue, because there isn't any. Correct me if I'm wrong, but isn't 1% of $0.00 = $0.00? So what's the problem, then, Mike?
How can they only break-even when there is no extra cost other than digitizing the media to the iTunes format?
"On March 13, 2005, Eisner announced that he would step down as CEO one year before his contract expired."
so with ZERO investment from the studios and getting something back.. how in the hell can you claim "breaking even" ? What is their cost for posting content to iTunes to begin with??
Um, that's not the only cost. Maybe you forgot, but there's royalties to pay, overhead charges (you think all those accountants who keep track of every penny and know who gets what percentage all work for free?), etc.