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Apple Wooing Smaller Labels
kalel666 writes "Apple has a big event planned for Thursday in Cupertino with hundreds of representatives from smaller indie music labels."
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This is great news, one problem with online music services always seems to be that they have only records of the big ones.
Done properly, this kind of move by Apple could eventually kill the big record labels by removing their need to exist. Bands could get their product to market without the absurd overhead imposed upon them by the big labels. You all know the scam -- the big label "advances" the band a seductively huge blob of cash, then leeches it all back in fees and charges, to where the band become their indentured servants.
This makes me very happy, more music to buy from Apple!
How many times have you bought a CD just because of one track that was worth having? You no longer need to do this. This is exactly what I've been looking for. The ability to do this has been around for several years but it takes a good company like Apple to stick thier nose on the line and do it.
This is how it should be.
http://www.xpurple.com
...the decision to join the iTunes store would come down to the compensation package that Apple is offering, which he has not yet seen
What else, other than a percentage of sales, can Apple offer to a music company, and whether this alone will make the more RIAAistic ones join this or any other online music distribution system
just wondering...
This is not my opinion. Actually, it's not even an opinion. And I'm nowhere to be seen near it
I'm pleased to see that they are aiming to provide a better cross section of music rather than just focusing on the big labels. My taste in music wouldn't be satisfied with just the majors, and I suspect a fair chunk of the /. readership would be the same.
The only problem I can see is that this doesn't go far enough. Independent labels are a good thing, but it seems they are only targeting the larger ones. When they get to the stage where the smallest labels and individual artists can coexist in the service with the majors, I'd be tempted to give it a go. I can't see the RIAA being too happy about coexisting with what is effectively the competition, though.
is it possibly conscievable that, if EVERY mac owner (on average) is going to spend some bux on the music store, that Apple can actually subsidize the price of the hardware, and create a circle of more-and-more sales?
say if they found out an iPod owner chokes up an average of 300 dollars over the life of the iPod - then they can price the iPod at maybe a 150-200 discount from where they are right now - which means MANY more people would be buying iPods, and buying more music, and probably a few extra Mac sales on the way.
One heck of a job Jobs is doing.
My life in the land of the rising sun.
Instead of paying EMI et al for the right to listen to a song I get to pay Apple.
;-)
Indie companies are still going to get ripped off they just get ripped of by an electronic distributor instead of an offline one.
Bands will still get very little cash for their effort.
Every band (or at least every indie label) should have their own website and take micropayments from customers direct. If you only had to pay a few pence for the rights to listen to a track you could share with your friends and if they like it they can go a pay for it as well.
One of the big reasons for piracy is the cost of tracks and how the cash is distributed. Micropayments with the vast majority going to the artists would eleviate these problems.
If any bands are willing to give this a try, get in touch I can help you get up and running for minimal cost
blog and junk
The synergetic effects would be impressive for both companies, as Apple would have their products available on the biggest online retailer on earth and would benefit from amazons itunes link up. Amazon would get exposure to the big - spending Apple users.
Clever..
...which labels show up on iTMS, I'm hoping to not only see spinART and Rough Trade, but also smaller labels like Mezzotint who seem to have most of their old catalog out of print aside from vinyl and cassette. I've been saying since its debut, iTMS can be a vehicle for low budget labels to get digital media out with less cost than a run of discs.
------------ Ben Chroneos
As a non-apple user not living in the US, it will take a long time for me to get my grubby paws on the iTMS. If it was available in my neck of the woods, I wouldn't even think twice about buying a powerbook just to get at the music store.
The concept of small payments for songs will change the way people buy music. P2P apps have conditioned users to search for one song at a time for several years now, and paying a reasonable fee for a song isn't such an alien thought anymore at all. When Apple releases their x86-compatible client, together with a global release, the labels will have to face the music.
Online distribution will make distribution a non-issue, putting the indie labels on equal footing with the major players. The only advantage for signing on a major label will be the marketing machinery, and if iTMS would incorporate a net radio, even that would be a questionable advantage. Think about it: hearing indie songs on the net and actually being able to buy the single on the spot with one click will bring independents to the forefront.
Microsoft and AOL/Time Warner are running fast to get their own online Apple-like music store up and running, now that Apple's has been the success it has been -- doubly so since Apple's planning a Windows version of iTunes and the music store by the end of the year. Microsoft could probably beat them to market with a shoddy music store without even sweating.
So Apple needs to get ahead and stay ahead. To do that, ease-of-use isn't enough (or Apple would have the 95% user share, not Microsoft) -- they need to have the biggest, most comprehensive, most searchable library of online music anywhere. Consumers won't get iTunes if Microsoft's store is already installed, but they will get it if iTunes offers three times more songs.
I think that once Apple gets a large number of indie labels in the store, the rest will eventually come on their own. That, plus a $100 iPod of any size, will be all they'll need to stay ahead of the competition for some time to come.
I don't think that indie labels are likely to request a bigger cut than the big labels. With smaller overhead and fewer artists to bring to the table, asking for more money than Universal would be much like giving Apple the finger.
The same percentage may give them better margins than they are used to receiving with conventional sales. Also, Apple needs to make some money at this, or it loses its viability, even if it is also a form of advertising.
That what was all this school was for... to teach us how to solve our own problems. -- janeowit
I love this service but ach, it is going to be a nasty business to be in. Apple has entered center stage with a model based on .99 cent downloads. Way cool! But the most obvious way for someone to compete with them is to offer a download service at a lower price--so expect someone to do that shortly. Apple's margins haven't been published, but I'd guess they're razor thin to begin with. Now .99 cents is already so low that there isn't much further to fall--if a price war ensues, it won't be long before corporations are running online music services as a loss-leader. In Apple's case, it promotes their hardware; other companies will have other ideas. Eventually, these services might very well lead back to where we started--corporate sponsored music-on-demand, with free content that is used as a tool to peddle something else. Look at the way Apple chases these labels--this is brand-name association for them. Think Different, Think Nirvana, etc. It entrenches Apple deep into the popular culture. So those who want free music--it may be coming sooner than you think.
"Oh, the tragedy of math gone wrong. I can't even talk about it." -Wil Wheaton http://www.wilwheaton.net
Do you know that if you signed a contract for cell service two years ago you're probably paying out the wazoo! I'd much rather get 1 or 2 songs free with an iPod and see a monthly 2 for 1 special or 3 Indie songs for a dollar. The way that Apple will be able to expand this service and make even more money will be the Windows implementation and even better, a deal with Amazon. After all, one click is already implemented!
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
Mac fans tend to go rabid with new stuff, then slack off on the demand, at least with new hardware introductions. I wonder how much they are selling per day now...
One big hurdle you'd have to jump through first is the "take micropayments."
From a merchant perspective, micropayments SUCKS ASS because the cost of processing such a payment is more expensive than the amount being paid. You end up with the same problem you describe, except now you are forking all the dough to the payment companies.
besides, even if we grant what you imply, that Apple is merely the lesser of two evils - I must remind you that up until now, almost all major distribution channels for music wants to screw you both ways - pump the artists dry AND limit the consumer's rights to their stuff. Apple, if not given any other credit, must be commended on their effort to make sure you can do (for the most part) whatever you want with the music you bought.
not only that, having a central place where your stuff is catalogued and easily purchased is a good thing. It's much less likely somebody will stumble upon your little corner of a website - but much more likely if you show up when they browse through the genre that they like on a major catalogued site. Don't underestimate the necessity of advertising channels, and the distribution / payment channels as outlined in paragraph 2.
I think right now there are two battles - one between the consumers and the labels / distribution / retail channels, and one between the bands and the same. Apple mostly allowed the first battle to be won in favor of consumers - the bands are another battle altogether - and i am sorry to say, unless there are some serious reason why the consumers would care to get involved, the vast majority of them probably wouldn't.
My life in the land of the rising sun.
The amusing part is that for some unknown reason we "trust" Apple more than probably any other company to make this work. Heck, I havn't owned an Apple since the 80's and for some reason I just trust that Apple will do the right thing.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
Not all the good music is on small or indie labels. A very substantial majority of all the music is still owned by the big labels and is still not available anywhere. Putting that stuff online would probably make bigger waves than going after "Wisconson Pete's Record Hut" label.
Slashdot quality declines as the number of hot grits posts decreases. - Provolt's Law, Apr-09-2005
If iTunes sales for small labels are going too well, they might abandon eMusic, which would be a shame, since I like it better to d/l as many mp3s as I like for $10/month than paying $.99 per DRM-protected track. (Yes, Apple's DRM is pretty much acceptable, but no DRM is even better, and if you're downloading a substantial number of tracks each month, $10/month is better than $.99 per track.)
Who will know the names of the indy bands to go and search for them to find them?
People need to hear it before they like it and likewise buy it. So unless apple offers some kind of deal where you can listen to it for free once or something how can people tell if these bands are good or not?
You sure wont hear them on the radio.
Word of mouth, a small caption on a website and a guitar, you're on your way to a rock and roll career.
I honestly dont think this will change 80% of the users downloading things they have heard on the radio or seen on TV. But I am glad they are opening the doors for ALL musicians to have equal rights, atleast somewhere in the music industry.
[cx]
Next thing we'll see is probably "unsigned artists" in the music store. The first step for Apple to become a record label, or?
...we'll have something called iIndies.
No, one big reason for piracy is people don't like to pay for stuff. Cash distribution is a small reason for piracy.
I consider myself an average consumer. I probably average about 3 CDs a month. With the apple store, I can go to one spot and get a lot of good music with few restrictions and reasonable prices. And now, there will even be indie music.
However, I should give this up in favor of a plan that would involve me visting 20-30 web sites a month and entering my credit card information on web sites with God knows what security holes.
I am sympathetic to the plight of the indie artist, but an average consumer is not going to put in the kind of work you are suggesting. And with the apple store, they at least have a chance to make money on volume
The major labels are already getting $0.65 from every track sold through the Apple music channel. I would expect that most of the independent labels would club baby seals for that kind of profit margin.
That's what you pay up front for the little deck of cards itself, right? For the 10 gig version?
As gets said a million times whenever someone hints at Mac OS X getting ported to other machines, Apple's a hardware manufacturer. They think of the iLife suite of programs as a "loss leader" that encourages people to buy their hardware. In a lot of ways the new iTunes store is a way to encourage iPod sales -- and whether they would see it the other way around is a big question mark.
Maybe you're right, though. The iTunes for Windows thing does seem to break that model -- they'll be selling software (on the cheap?) to get people hooked on their content service, is the idea. Maybe music is really as completely different a direction and business model as you're saying...
"Fundamentalism" isn't about divine morality. It's about human authority.
The Apple spokesman said it right with there is no timetable yet for when the songs could be added. "It's quality over quantity at this point,"
How many times have we seen Microsoft scramble to put up just ANY product that mimicks Apple or any other company, no matter how shoddy it was, and then use their deep pockets and name to further advance it. Windows 3.1 was hideous but they had to put SOMETHING out there against Apple and then keep revising it until it got better and people thought it was actually a good, innovative product. Same with the WinCE-powered handhelds. Palm was doing fine (ok, it was a portable OS going against Palm's organizing OS, but stick with me here) and then MS introduced WinCE which wasn't that hot either but after a few revisions it's turning out to be ok. Microsoft simply doesn't want to be left out and they're racing ahead with AOL/Time Warner now to ensure that doesn't happen.
Including indie labels is a brilliant move on Apple's part. Just think of the demographic of most Mac buyers anyway. Slightly creative, free-thinking, willing to pay a bit more for quality. It's the Mac owner that knows who is on these indie labels already.
And let's not forget Jobs and his pull in the entertainment industry. People there WANT to do business with him, from the artist level all the way up to managment. I just hope enough strategic alliances can be made so that a solid foundation can be built and not be torn away by a shoddy imitation with lots of money.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
One of the reasons Apple (I think) is doing so well is that the DEM isnt draconian. With MS/AOLTW/whoever, they have no vertical integration. How do I take a DRM'd WMP or Real Media clip and put it on a portable device like an iPod. Any iTMS competitor needs the following..
1. The ability to get the same DRM terms as Apple (own the song, burn to CD, etc).
2. Have a way to listen to it away from the computer (burn to CD, iPod like device, etc).
3. Same $1/track price.
4. Large selection.
Leaving out any of these items will doom the company to failure.
The Doormat
If you're not outraged, then you're not paying attention.
There once was a woman at the beach. Her son was swept away by the tide.
She prayed to God to have her son brought back. Suddenly, the tide changes, and her son comes sweeping back in. The woman looks up at the heavens and says "He had a hat!"
I am sure there is a message there somewhere...
Does Apple or anyone else post iTunes' best selling tracks and albums on a website? I'm curious to see the difference between the music industry charts and what iTunes users buy. I know you can see it from within iTunes but I am not yet an Apple owner.
Maybe so. RealNetworks announced their (listen.com-hybrid) service last week, at 79 cents a track. Also -- oops -- $10 a month subscription. It's amazing how the competition doesn't seem to recognize that subscription fees are the obstacle. Apple's buck-a-song is just so easy to get your head around. We want to pay for songs, not to belong to some Columbia records club with monthly dues. The iTunes interface is fine, but it's the per-song-only thing that sells it over the alternatives.
The other big bar to get over for other services is the licensing agreements. It sure looks like Steve Jobs used his name to get through obstacles that held everyone else up. It's kind of a race, too -- if someone else can get those same deals before the Windows version of iTunes comes out, maybe they can stake out the market share to avoid Apple's winning the new, bigger market of 'doze users. We'll see.
"Fundamentalism" isn't about divine morality. It's about human authority.
I've been enjoying EMusic for more than a year now -- dozens and dozens of indie labels put up albums and songs, for a flat rate of $21 / month, as non-DRM mp3s. I *love* this service -- it's helped me find a lot of new bands because it's subscription-based (and thus there's no risk when downloading a song by somebody new).
Indie labels stand to make a lot more money off of Apple than they do EMusic -- and I imagine they'll flock to it. While I support this in principle, Apple's DRM, lack of try-before-you-buy, and (lets face it) expense really rubs me the wrong way.
I know a significant part of the 99 cents a song goes to process the credit card transaction. Why doesn't Apple offer people a discount to prepay larger amounts? Say, pay $50 at once, and get to download 60 songs at your leisure?
For example, let's say that it costs Apple $.20 + 3% of the transaction for each purchase (I'm sure someone can correct me with more exact figures.) So, if I download sixty individual songs, Apple has paid $13.80 in credit card fees on $59.40 in revenue. They now have $45.60 to put towards licensing, other expenses, etc for those sixty downloads.
Now let's see if I paid $50 upfront and got to download sixty songs. Apple only pays $1.70 in credit card charges, and has $48.30 to put towards the other expenses for those sixty downloads. In addition to saving $2.70, Apple also just generated some goodwill on my end because I appreciate getting ten extra songs on the deal.
Multiply that relatively significant savings by the huge volume that iTunes generates (even more when it's released for Windows [and hopefully Linux]), and Apple could definitely help pad that margin a little.
- Neil Wehneman
My legal education, in nifty podcast format
Speaking of huge databases of user preferences, iTunes knows every mp3 track you have, and even knows how much you like them, if you've gone through the trouble of rating them. It's only a matter of time before Apple, the company that licensed Amazon's One Click patent, enhances iTunes to use this user data to suggest music you might like, be it indie or mainstream.
Kevin Fox
Apple picked $0.99 because it's a critical price point in the minds of consumers. It's as high as you can get and be less than a dollar, and $1.00 is already considered a pittance by most consumers -- especially those used to $15 CDs.
On the average, most consumers won't differentiate between $0.89 and $0.99, any more than they'd shop at a different store to pay $11.89 instead of $11.99. Even $0.75 isn't such an improvement over $0.99 psychologically speaking -- a competitor would have to go as low as $0.50, or close to it, to take customers from Apple on price alone.
Besides, we're selling bits here, not products. "Razor-thin margins" don't actually exist with virtual merchandise. Apple's had a nationwide network for distributing media quickly for some time now -- specifically, for QuickTime movie trailers -- and *that* was for zero profits. All they can do with this store is make money.
So, Apple is going to get indie labels. Good for them. Matador and SubPop are relatively large anyway, and they don't do much to help the artist financially.
emusic is fine and well, presuming you can bet they have enough music you'll like to justify a subscription. Most folks can't.
Lulu.com started by Bob Young formerly of RedHat actually empowers the artist. The artist gets to decide what distribution format to sell in, set their own price, and set their own royalty. The artist also gets to decide if they want to use the Founder's Copyright or any other license instead of traditional copyright.
It's putting the artist back in control of their work, something Apple hasn't considered. Apple just does the same thing as Sam Goody's or Tower, only over the internet. Big deal. The only nice thing they've got with it is the iTunes integration.
I don't know if it's a typo or what, but $21/ month for eMusic??? I'm paying $9.99 a month cuz I signed up for a year. Month to month is $15 or so. . . . Why $21?? Is there some pricing plan that I'm missing?
apple should make an area of the store that is just bootlegs and live exclusives.
they should make a project to relicense (or whatever the term would be) these materials if they were illegal in the first place with the artist and apple as a publisher.
most people i know that want music off the web (eg, p2p) want stuff they cannot get else (rare)
members are seeing something, your seeing an ad
This fits the classic pattern of Apple prophesy: "Sure, the Apple product is great, but we know that sooner or later Microsoft (or someone else) will come out with something that's 75% as good. So why bother with the Apple version? Besides, how could Apple possibly make money on this. Poor Apple, they're doomed!"
Every time Apple has tried something new, the prevailing sentiment has been, "that's wonderful, but it'll never keep Apple alive." Somehow they've managed to stay alive for quite a long time, and they've got a pretty loyal customer base. Maybe Apple management isn't so stupid after all.
Read the EFF's Fair Use FAQ
I have been using iTMS and I am quite pleased with it, but there is more that they could do and *should* do. Ultimately, the huge and useful role that labels play is getting the music exposed to people. People don't want to pay the labels any money because they don't think that they are doing anything. This just isn't true. How am I supposed to know to buy a song unless I've heard it a couple of times. A huge amount of work and money goes into putting on concerts and radio play and store placement.
1. When It comes down to it, a 30 second clip just isn't enough to sell me on a song. In the old model, one hit song could be the catalyst for selling a number of other good songs on the album (although it is often the case that one hit song sells a number of crappy ones). If this model becomes more popular, then each song will need to be marketed individually. That requires a lot of effort. Apple could help by providing radio stations based on it's catalog.
2. I think it could really take advantage of other people providing some level of predistribution. I could certainly see myself going through web sites that provided editorial content that reflected my own personal tastes. If people could get a small bit of the cut for pointing me to good music, they would be more inclined to put some effort into it. (This is similar to what amazon does now, but I don't think that books lend themselves as well to this sort of activity).
3. I don't think they should necessarily follow the Amazon system of rating things - which has devolved into pretty much a one or five star rating system that is mostly useless. I do like reading people's comments, though. Still, finding a central source for advice that I trust vs weeding out the person I trust from a list of unknowns is less than effective.
4. It is still unclear to me how I get to keep this music going forward. I don't plan on buying another computer for another year, but what about then? How do I move it? I still use my linux box alot and can imagine there is a point where I will use it exclusively in the future. I still paid for the music, I want to take it with me.
sean
Funny, I don't see $10 albums as a rip-off, nor $0.99 singles. Since it took less than a month for the iTunes store to sell more music than all the other services combined, perhaps the other services that you're stuck with on Windows right now just suck?
Even if you're able to pay for a single song on Real without subscribing, you have to pay per song you download to CD!
That means that if you want to keep a song, you have to burn it to CD, then rip it, then manually enter the track information - all to just keep the song in your library, and all at whatever bitrate Real supports (not sure if they are good or bad in this area).
With the Apple service, I can buy a song and I really own the electronic copy of the song to start with - complete with ID3 style information and cover art.
To summarize, with Real you are paying for a single physical copy that is difficult to manage electronically. With Apple you are paying for a digital copy with all of the benefits implied by owning a digital copy, including being able to make many different mix CD's and keeping information about the song with the song.
People constantly discount the workflow, if you will, of music ownership - that's why Apple's store is so popular. It finally achieves some of the promise of digital music distribution that has been so obvious for so long.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I think their selection is tolerable. I have been able to find a little bit of most things, i.e., they might only have two of Jane's Addiction's 4+ CDs, but they do have something. I am only on my third day of this trial period, but I am actually extremely pleased with the service.
p l d/Reggae
The software is typical Real bloat, and it is unconfigurable to an annoyting degree. It not unattractive, and it is fairly easy to use. It can definitely be improved, but it's tolerable.
What I have started to fall in love with are Real's streaming channels. Here are the categories of channels:
Rock/Pop
Alternative/Punk
Rap/Hip-Ho
Soul/R&B
Country
Jazz
Electronica/Dance
Wor
Classical
Oldies
Vocal
New Age
Sacred/Gospel
Blues
Folk
Easy Listening
Soundtracks/Musicals
Children/Holiday
Each category has somewhere between 1 (Children/Holiday) and 19 (Rock/Pop) channels. I have been listening to the Indie Rock and the Ambient channels a lot at work, and I've been surprised and delighted with Real's quality of song selection. Not only do they play songs by some of my favorite artists in these genres, but they have introduced me to some really wonderful new artists. I've already bought two CDs of artists I discovered on this service. Also, a small box displays interesting tidbits of information about each song/artist as the song is being played.
I don't care if I can't copy the songs to my mp3 player of burn a cd. That's not why I want an MP3 service really. If am going to buy music, I am just going to buy a cd. I have a good backup that truly can sound better than any mp3 version (on the right equipment), and I can do anything I want with the mp3s I rip from it. If I am paying for music, I don't want restrictions.
With the Real service, I am not really paying for music. I am paying for a very high quality, on-demand, highly configurable Internet radio station.
For $10/month (only $5 for first three months), I get unlimited streaming access to over 325,000 songs. I can't listen to those songs without a computer and broadband connection. That kind of sucks, but it's only $10/month.
Also, you can burn certain songs to CD for $.79, as has been pointed out elsewhere, but I haven't really explored this much, as I have had no desire.
Anyhow, I highly recommend this service to people who feel similar to me. I really just want a badass Internet radio station, and Real's Rhapsody service is the best attempt I have seen so far.
Why should Apple care at all about EMusic? It's subscription, Apple's store is per-song. They can co-exist pretty well. If you get tired of a monthly fee, you can always turn to the Apple Store, and if you like some stuff that's not on EMusic while you're subscribing you can still buy stuff from the Apple store.
Probably a good split would be really small bands on EMusic, and then large to small bands on the Apple store.
Apple is not Microsoft, they do not crush people just for the hell of it or demand utter domination in a market space.
"There is more worth loving than we have strength to love." - Brian Jay Stanley