Hollywood has a lot riding on Steve Jobs

Thu Jan 29, 2009 7:24pm EST
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By Sue Zeidler - Analysis

LOS ANGELES (Reuters) - Steve Jobs' exit from center stage at Apple Inc is unfolding like a Hollywood drama, complete with a charismatic leading man and compelling plot twists.

And Hollywood has a lot riding on Jobs, given his role in shaping digital entertainment and the challenges that lie ahead for the media industry.

Jobs, who is taking a six-month medical leave of absence from his CEO job at Apple, is both hailed as a savior and loathed as a monopolistic Goliath in Hollywood.

He has been a powerful advocate of change in media distribution, at a time when Hollywood studios need to move fast or risk losing viewers who get free content online. But he has also used the dominance of his iTunes online store to tightly control pricing of digital songs, movies and TV programs.

Some observers think negotiating with Apple could become easier for media companies with Jobs on the sidelines.

"There may be some more room for advantageous deal-making between Apple and studios. Steve's a control freak and tough negotiator, and Apple will lose a lot of bench strength, which may work to studios' favor," said one studio executive who did not want to speak publicly about negotiations.

Others, however, are less certain. They say Apple has assembled a group of formidable executives, and the popularity of iTunes and the iPod music player means the company still has a lot of negotiating power even in a post-Jobs era.

"Hollywood's always been Steve Jobs' pet interest," said Julia Plotts, a business professor at University of Southern California. "He branched out into Hollywood and provided studios with a new mechanism to make money in the era of digital content delivery.   Continued...