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.

Comments

Re:The original goal of ITMS..

[plasmacutter]

no.. that "share" is ipod sales. ITMS barely breaks even.

Re:Quotable quotes

[zoobaby]

The artist get to keep the *most* money from the concerts, not the studios.

Re:Here's what Apple needs to do...

[vought]

Let's say Sony does pull the plug, have all of the pages that previously held their artist information have a small message that state that Sony pulled their artists due to a conflict over pricing.

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.

It's Hertz, not Warner's Nash

[bayvult]

Oops - it was Alanis Morissette's lawyer Ken Hertz, not Warner Music's Michael Nash who made those remarks.

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

Apple gets 4 cents on every 99 cent download

[saha]

First I think Apple earning only 4 cents for every 99 cent download is very reasonable. Considering it is Apple who hosts the iTMS (servers, bandwidth and ...other over head), R&D for the iPod and they came up with an elegant solution for consumers to gain access to music from a wide variety of labels under one roof.

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