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Music Industry Threatens to Pull Plug on Apple
bacterial_pus writes "First the music industry wanted
more money, by changing Apple's 99 cents per song policy. Now one exec is
threatening to pull the plug on Apple if Steve Jobs doesn't change the iTunes Music Store pricing." From the article: "Nash's comments echoes those made last week by Warner CEO Edgar Bronfman, who called for Apple to adopt variable pricing and share out revenues from iPod sales. The record companies' position is based on the dubious argument that digital downloads sell iPods. In fact all the evidence points to the opposite: that iPod sales have driven demand for downloads. The vast majority of digital music sales are made by iPod owners. Cut off Apple and the labels digital sales will slump." More recently Jobs resisted their pressure, and the execs snarked back. Looks like they're getting more serious.
According to Apple, the original goal of the iTunes Music Store (ITMS) was to sell more iPods. In fact, they didn't expect it to be profitable at all - but now it commands a sizable share of Apple's quarterly revenue.
PayPal $$ if you sign up for free offers (eBay, cred cards, e
Or maybe they need the money; for all I know, the price of snorting coke off a stripper's breasts has gone up dramatically in the last year or so.
-paul
Pistol caliber is like religion: everyone has their favourite, and theirs is the only right choice.
There was a fight years ago between TV channels and Record compagnies about Videos.
The TVs didnt want to pay because they were doing free advertisements for the records, the Record companies wanted money because the TVs were doing money showing the videos.
And yes the sales of records were going up thanks to the music videos. Well, TV channels had to pay anyway. End of the story.
As long as you give money to pay the records or whatever is coming from those record companies, they are controling the market, they are controlling the music, they are controlling the medias.
Give your money to alternative music channels that respect your rights and the music and the artists.
Not to give the labels too much credit (they certainly give themselves more than enough), but in fairness, I think they do have a bit of a point with this. iPod sales did rise dramatically after the introduction of the iTunes Music Store to levels well above what they'd been immediately before (and they've been going up ever since). That said, it may also have something to do with the boost to the iPod's Windows-friendliness around the same time (the 3rd gen iPods, which introduced dual-platform support in a single box and the ability to use USB as well as FireWire), or simply market awareness and the "fashion" factor building to a head.
In other words, I don't think we (those of us outside the industry, without access to their market research) truly know to what extent iPod sales are driving iTMS sales and to what extent iTMS sales are driving iPod sales, and I think a decent case could be argued in either direction.
That said, the music industry's apparent sense of entitlement to a piece of Apple's iPod revenue, and its threat to pull out of a store offering their product in a medium that both offers them some control over how consumers use it and reduces the costs associated with manufacturing, shipping, storing, etc. physical goods to virtually nothing, are pretty damn ludicrous. They ought to be on their knees thanking Apple for finding a way for them to generate earnings while dramatically reducing their costs; instead they're demanding more slop in the trough. I'd dearly love to see them pull out and then watch their earnings disappear as consumers finally decide they've had enough of this shit and spend their music money on alternative content providers, but I know better than to expect that.
If Apple bypassed the labels, they'd only be able to sell new material. Artists contracted with the labels don't own their prior work - the labels do. A musician can't say to Warner, "I'm going to sell my music on iTMS whether you like it or not" because Warner owns the music that has been produced under contract, not said musician. He'd have to go out and produce original tunes to sell - without any contract guarantees.
The artist get to keep the *most* money from the concerts, not the studios.
If I recall correctly, Bronfman (the name refers to making brandy, in German -- but Bronfman is as kosher as gefilte fish), is from a long line of alcohol makers. They supposedly made their fortune dealing in liquor illegally during Prohibition by making a huge fraction of the illegal alcohol sold in the US.
. htmlr onfmanking.html
His daddy was in essence a kosher Pablo Escobar.
Little Bronfy himself presided over the shameful shakedown of Swiss banks in the 90s.
It doesn't surprise me at all that Little Bronfy vants his money.
Here are some references:
http://www.forward.com/issues/2002/02.06.07/news6
http://www.davidicke.net/tellthetruth/reststory/b
http://www.blacksandjews.com/bronfman.html
http://www.thebricktestament.com/the_law/when_to_
The record companies should check with Michael Eisner before they fuck this up badly. You do not renege from a deal with Steve Jobs, and you do not double-cross him at the deal table. Pixar SAVED Disney to a large extent. With the ABC albatross around the neck during the 90s, the only thing Disney made massive revenues from were the box office hits conceived, created, and executed by Pixar.
When negotiating with Jobs beyond the initial five-picture deal, Disney then tried to play cheap. Pixar walked. Disney is now having to learn how to build Pixar-caliber films all by themselves and they're finding that it's, ah, hard.
The record companies had better take a lesson from this; if it's just their own stupidity or some other forces causing them to draw a piston on their own foot, they'd better watch it - building a successful online music store isn't easy, and it won't be profitable for them, as selling music through iTMS currently is.
well in america the states have already sued them once for doing this with CDs. august, 2000. the labels settled for $67.4 million. link.
Maybe I'm missing something, because I'm not into this whole scene, but why doesn't the RIAA just raise their own prices? I assume they have some sort of contract with Apple, because otherwise they would be (rightfully) sueing the shit out of them for mass distribution of copyrighted works. So that contract must have some sort of pricing deal included. The very simple, honest, market-proven technique to get what you think is you fair share is that when the time comes to renew the contract, you demand a higher price. It doesn't matter what iTunes charges, as long as the RIAA gets what they were promised.
Now, I would assume that this is what is already happening. I would guess that by "cutting them off", the RIAA means that Apple is demanding prices which allow them to distribute for $.99, but the RIAA isn't going to agree to that anymore, such that they may reach an impasse where the contract won't get signed. That's not really news, though, because that's everyday business. You play the game to try to get as much as you can. It's only interesting because, as somebody said, they basically each have related monopolies, so it's an irresistable force against an immovable object (and in an area that consumers care about).
Sadly for the RIAA, everybody hates them and has no qualms about taking their products without paying for them. Everybody loves Apple and even around here people are willing to pay for physical things. So while the RIAA in this case is on just as firm ground as Apple, they are going to lose the public opinion polls and they are on poor footing because of rampant copyright infringement. So I think Apple will win, whether they deserve it or not.
The RIAA is a lobby group, not a company. It's the labels that the RIAA merely represents who want to drive up proceeds.
Just pointing out that a lot of people are acting like the RIAA is its own entity. It's record labels, people.
"Sufferin' succotash."
More interestingly, Hertz is a proponent of blanket licenses:
Peer to peer file sharing is really just interactive radio consumers get to listen to exactly what they want when they want it. This demand is not addressed by the record industry. In fact, it cant be offered legally at any price. And as I think Ive illustrated, technology and reality will insure that supply finds its way to meet that demand...
and
My partner Fred and I therefor support compulsory blanket licensing. The same way restaurants, radio stations and elevators pay for background music, a tariff on communications technology could permit non-commercial file sharing to flourish, and copyright owners to benefit financially. File sharing is NOT piracy. Piracy is big fat guys manufacturing fake CDs in Mexico and selling them at swap meets. File sharing is tens of millions of music fans swapping copies of things they wouldnt otherwise buy. An ASCAP or BMI like pool of money allocated in an equitable way amongst copyright owners is the only solution that could be of benefit to creators, consumers and copyright owners. Compulsory blanket licensing for non-commercial file sharing is the equivalent of loosening a tourniquet tied around the entertainment industrys neck.
- ACLU Bill of Rights Dinner - Thursday, December 12, 2002
If I remember correctly, didn't Apple computer have a spat with Apple Records (the ones the Beattles started) but settled by saying they will stay out of the sound business and even later having a fight over the sound card on a mac?
Although, I guess apple could call the label "iTunes Records"
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
You ask if the labels of get a cut of every CD player they sell... In some cases (Sony) they do.. in other cases the labels actually get money from taxes on CDR sales... The IPod changes things signifigantly since the labels get no revenue from this..
The Music Store has been solidly profitable for years now, according to the quarterly conference calls.
When Apple was dealing with the setup costs, the store was a break-even endeavor. Those costs are now over, and the store is profitable, though with small margins (compared to the 20-30% it makes selling iPods and G5s.)
CDBaby already put a lot of their artists' catalog on iTunes...but there is some paperwork the artists need to fill out before they can do that. (i.e. assurring that the material is original, etc.) CDBaby even has its own ISRC identifier that it tacks on all the digital tracks that they sell. Check out their digital distribution info here: http://www.cdbaby.net/dd They also don't limit themselves to iTunes...and they take a 9% cut of whatever they get after fees. Not too shabby.
Magnatune goes direct...and lets the listener set the price per disc...which is an entirely different concept. Very cool indeed, but they're more selective about what goes up on their site. Plus, you can play the stuff before you buy it. Once it's bought...pick your distribution format.
// Agent Green (Ian / IU7 / KB1JQO)
// IEEE 802.3: All 10base Are Belong To Us
Warner Music: iTunes Statement False
p le_decapitation/>, which had quietly removed the story by Thursday morning. The spokesperson would not comment on the status of any negotiations with Apple.
By Ed Oswald , BetaNews
September 29, 2005, 12:20 PM
BetaNews has learned that a quote widely attributed to Warner Music's digital music strategy chief Michael Nash, which received a lot of attention in the press, never actually occurred. Nash was quoted as saying they'd "cut him off," referring to Steve Jobs and iTunes if discussions were not favorable to Warner Music Group, and that "very few people buy music from digital downloads."
"He was misquoted in a lot of different sources," a Warner Music spokesperson told BetaNews. The comment first appeared on British technology site The Register http://www.theregister.co.uk/2005/09/27/warner_ap
Join emusic.com. High quality drm-free mp3s, great selection of independent artists, fast downloads, much cheaper than itunes.
Addicted to the major labels and couldn't possibly live without their music? Yourmusic.com, $6/CD. It's a music club, so they're not going to have everything, but almost everything that's popular enough they'll have a few months after the retail stores do.
I'd suggest you don't use Slashdot as your only news source, or you will suffer permanent brain damage.
The record industry is too anachronistic to have the foresight to create this solution themselves and are still obsessed with selling a solid medium (LPs, tapes, CDs), while treating its customers as criminals and artists as expendable commodities that can ignore paying royalties if they can help it
A brief look at the practices of the record industry reveals that they are the dishonest lot:
Apple earns less than a nickel per iTunes track
States settle CD price-fixing case
RIAA Continues Distributing Dud CDs to Satisfy Settlement
A music industry case study Shows how little the artist makes thanks to middle men like the record industry
Wal-Mart Wants $10 CDsRemember when CDs first came out and people said it was too expensive and the record industry promised that it would go below $10 eventually. Never happened
How Apple saved the music biz
FTC: Labels charged with price-fixing - again
Music Firms to Look Harder For Artists Owed Royalties Spitzer announced a settlement in which the nation's five largest recording companies promised to do a better job of tracking down and paying $50 million in unclaimed royalties to thousands of performers.
Finally, last night 2005-Sep-29 on Nightly Business Review (NBR) was a four part series on the music industry. It shows how iTMS allowed one relatively unknown electronica artist sell directly to her consumers with the iTMS . Her music was featured on NPR and then people all over the world wanted to download and listen to her music. Stores like iTMS are the great equalizer from years of abuse from the greedy record labels. "The Business of Music,"-Part 4: The Down Low On Download Distribution
It costs them nothing to distribute music this way...
Servers aren't free.
I've said it before, and I'll say it again: As long as the big name artists all acquiesce to RIAA control of the music industry, they're complicit. A lot of smaller artists understand that the music industry cartel props up a small number of big name artists at the expense of all other recording artists. Unfortunately these smaller players don't have the clout that the big acts do.
Millionare recording artists, wake up and smell the coffee! The system that built you up is crumbling at the foundations. It won't be around forever.
As for the RIAA, the original Reg article indicated that they were feeling full of piss and vinegar supposedly because their profits have been better than expected, and they have a lot of faith in wireless networks to deliver the Next Big Thing in music. Yep, because ringtones are the bellweather of the future and everyone wants to use a cellphone as a music player.
Morons.
Read the EFF's Fair Use FAQ
Since they are Apple's servers, it costs them (the labels) nothing to distribute music this way. While there is the issue that Apple is taking a cut, the real point is that music via download does cost less to distribute than music via physical media. But the labels want to be paid the same for music from either source, and not pass on any of their reduced costs. Of course, we ought to be used to this by now since CDs were priced significantly above that of cassette tapes, despite the fact that the manufacturing cost for a cassette was above that of a CD.
Like you ever stopped. And it's not 'stealing'. It's 'copyright infringement'.
Most modern music is basically the same with some slight variations for marketing purposes (music development has always been based on the development of the supporting musical instrument technology). Even the rebellion aspect of music is over fifty years old (excluding of course any hint of rebelling against the publishers profits).
Recorded music has always been and will always be "dead" music, when it is live and shared it comes to life as part of a shared community celebration, whatever that community may be (create your own music don't buy it because your are just buying advertising 3 minutes at a time).
Chaos - everything, everywhere, everywhen
The RIAA is afraid of Apple. They know in today's world, music labels aren't as necessary. And iTMS may be making them useless. Why should a major act re-sign with a label when they can go straight through iTMS? Dvorak has a great article on it.
s p
http://www.pcmag.com/article2/0,1895,1862166,00.a
would be like a cut of every CD player, tape player, or record player sold. If the RIAA doesn't get a cut of those, then it obviously shouldn't get a cut of iPod.
It is also an insipid argument that their digital downloads made the iPod. It is completely bass-ackwards to the real truth. There were digital music players, and even digital music stores, before iPod/iTMS. It wasn't until Apple made it simple to buy music that digital downloads took off.
The RIAA labels really show how they feel about Intellectual Property with this move. "What's ours is ours, and anything ours touches is ours."