• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'

2

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

3

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

1

The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'

2

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

3

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

Apple VP Eddy Cue’s double billing: On stage and in federal court

By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
Down Arrow Button Icon
By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
Down Arrow Button Icon
June 9, 2013, 6:57 AM ET
Add Fortune on Google for similar content.

Cue in 2011.

FORTUNE — If the trade press reports are true, Eddy Cue will take the stage Monday at Apple’s World Wide Developers Conference in San Francisco to introduce a new music streaming service that reporters have dubbed — probably with good reason — iRadio.

Three days later, Cue is scheduled to appear in a Manhattan federal court as the star witness in U.S.A. v. Apple — the e-books antitrust case that revolves around the deals Cue negotiated in late 2009 and early 2010, just before Steve Jobs unveiled the iPad and introduced the iBookstore.

The parallels between the two appearances are striking.

Cue’s job as Apple’s senior VP for Internet services and software is to persuade content makers — recording companies, book and music publishers, TV and movie producers, app developers, etc. — to put their works on the iTunes stores in terms favorable to Apple (AAPL).

Evidence presented by the Department of Justice last week in the e-book trial described in extraordinary detail — down to the contents of his text messages and the length in minutes and seconds of his phone calls — Cue’s negotiations with five book publishers that the government claims were engaged in a conspiracy to fix the prices of e-books.

Cue, according to the government, was the “ringmaster” of the conspiracy.

His appearance as a witness in the trial was delayed because he was tied up in similar negotiations with recording companies and music publishers for the iRadio deal.

In both negotiations, Cue pushed hard for contract terms Apple considered essential. In e-books it was a 30% cut of every sale and a price-matching provision that guaranteed that no other e-book distributor could undercut Apple. In streamed music, according to AllThingsD and Billboard, it was Apple’s insistence that it not pay for songs that listeners skip.

In return, Apple was giving the content makers something they desperately wanted.

In e-books, it was a cudgel to move Amazon’s (AMZN) off its hated $9.99 price for e-book new releases — a price that the publishers believed was undermining the perceived value of their intellectual property. For music publishers it was a way to collect more revenue than the $0.0012 per track they are getting from Pandora — currently the leading music streaming service and the top grossing publisher on Apple’s iOS app store.

Apple, according to Billboard, is offering to pay music companies the bigger of two revenue buckets: 1) A 50/50 split of advertising after Apple takes 10% to 20% off the top or 2) a per-play/per-listener bucket that could be anywhere from $0.00125 to $0.0016, depending whose reports you believe. Apple is also reportedly including a “buy” button that will take listeners straight to the iTunes store — plus a cash signing bonus.

In each case Cue used the classic “the train is leaving the station” negotiating strategy to get the last holdouts to jump on board. And both negotiations came down to the wire. The last e-book deal was signed on Jan. 25, 2010 — two days before Jobs introduced the iBookstore. Billboard reported on Friday — three days before WWDC — that Sony/ATV Music had signed with Apple, leaving Universal Music Publishing Group as the sole holdout.

In both cases Apple’s entry was expected to shake up an industry. The publishers used their deal with Apple to force Amazon to restructure its e-book contracts — at least until the DOJ stepped in. Similarly, the music companies hope to use Apple’s arrival to extract more favorable terms from Pandora and Spotify, the biggest music streaming service in Europe.

Apple, of course, stands astride the music industry like a giant. With a catalog of 26 million songs in 119 countries, it claims to run the world’s most popular music store. As of February, it had sold 25 billion songs and had gathered the names and credit card numbers of more than 500 million iTunes customers.

When it launched the iBookstore, by contrast, Apple was new entrant in an e-book market dominated by Amazon’s 80% to 90% share — a point that Apple’s lawyers have made again and again in the trial that resumes on Monday.


Cue and Murdoch. Photo: Charles Eshelman/FilmMagic

Apple’s entry in the e-book market, as it turns out, didn’t go so well for the publishers. Not only did the iBookstore not live up to their expectations — Apple is still the No. 3 e-book retailer after Amazon and Barnes & Noble (BKS) — but the cash-strapped publishers ended up having to shell out a total of $164 million to settle the government’s antitrust claims.

And that wasn’t the first time a contract negotiated with Eddy Cue had gone sour for a signee. Less than two years after Rupert Murdoch posed with Cue at the splashy Feb. 2011 launch of News Corp.’s (NWS) The Daily, an iPad-only newspaper, Murdoch shuttered it — having burned through at least $30 million in start-up costs and estimated $26 million a year to operate it.

About the Author
By Philip Elmer-DeWitt
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • TikTok icon
  • YouTube icon

Latest in

France deploys giant military cargo plane to dump tons of flame retardants as European wildfires displace more than 250,000
Environmentwildfires
France deploys giant military cargo plane to dump tons of flame retardants as European wildfires displace more than 250,000
By Mark Carlson, Emma Da Silva, John Leicester and The Associated PressJuly 25, 2026
50 minutes ago
Intern arrested in Belgium on suspicion of spying inside NATO military headquarters and ‘being a member of a criminal organization’
CybersecurityNATO
Intern arrested in Belgium on suspicion of spying inside NATO military headquarters and ‘being a member of a criminal organization’
By Sam McNeil and The Associated PressJuly 25, 2026
59 minutes ago
Let’s get ready to rumble: The next Fed meeting will be a ‘family feud’ — and that’s exactly what Chairman Kevin Warsh wants
EconomyFederal Reserve
Let’s get ready to rumble: The next Fed meeting will be a ‘family feud’ — and that’s exactly what Chairman Kevin Warsh wants
By Jason MaJuly 25, 2026
1 hour ago
The ‘Trump Trade’ is turning into a loser in the stock market
InvestingStock
The ‘Trump Trade’ is turning into a loser in the stock market
By Geoffrey Morgan, Joel Leon and BloombergJuly 25, 2026
3 hours ago
Samsung wins $200 billion order to supply chips to Broadcom
AIChips
Samsung wins $200 billion order to supply chips to Broadcom
By Hooyeon Kim and BloombergJuly 25, 2026
3 hours ago
SK chair says Anthropic asked for supplies to make its own chips
AIChips
SK chair says Anthropic asked for supplies to make its own chips
By Ian King and BloombergJuly 25, 2026
4 hours ago

Most Popular

The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'
Real Estate
The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'
By Nick LichtenbergJuly 25, 2026
12 hours ago
'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
Economy
'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
By Eleanor PringleJuly 24, 2026
2 days ago
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
Big Tech
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
By Sydney LakeJuly 23, 2026
3 days ago
An 11-year-old is cleaning his neighbors' trash cans for $10 each—he now has 100K followers as teens face the worst summer job market since 1948
Success
An 11-year-old is cleaning his neighbors' trash cans for $10 each—he now has 100K followers as teens face the worst summer job market since 1948
By Orianna Rosa RoyleJuly 25, 2026
15 hours ago
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
Economy
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
By Sasha RogelbergJuly 23, 2026
2 days ago
Jensen Huang just used his first ever X post to warn the AI industry not to make the mistake that software narrowly avoided in the 1980s
AI
Jensen Huang just used his first ever X post to warn the AI industry not to make the mistake that software narrowly avoided in the 1980s
By Nick LichtenbergJuly 24, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.