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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 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
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
Next thing we'll see is probably "unsigned artists" in the music store. The first step for Apple to become a record label, or?
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
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.
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.
It was over 1 mil in the first week.
They reached 2 mil in 16 days.
They reached 3 mil in 4 weeks.
At this rate they will be selling only 1 song a week by the end of the year. And this means...
(everybody say it with me)
Beleagured Apple is going out of business!!!
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
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.
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
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