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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.
Couldn't they just find out a way of making their on money on digital media stores instead of trying to prosectue people who download or trying to threat iTunes store. Or is this thier new way?
Beats me.
Upfront disclaimer: I'm a total idiot, and I have no idea how businesses work, nor do I have any legal background.
So, I wonder if this is a confrontation Apple may welcome, and maybe even brought semi-intentionally. My hunch is the thesis: iPods generate sales, rather than download sales generate iPod sales is the more correct dynamic at work in this market.
There certainly are plenty of alternative sources of music, music that could temporarily replace the current source for iTunes, should the music industry call Apple's bluff. But I think the music industry stands to lose way more than Apple. The music industry could:
- lose revenue
- lose confidence of the consumers
- lose artists
- lose relevance
Apple, on the other hand still offers a sweet product (even a sweet suite of products) and there are myriad ways to get music onto their devices. Sure, a speedbump in iTunes could require a detour, but I think Apple faces little risk. Apple could be the huge winner here. In my opinion, Apple already is at least the winner, they've dared not to blink and the music industry is starting to look silly.Me, I refuse to play one way or the other with any of DRM markets, but I give Apple grudging credit for offering a palatible product and willingness to take on the hand that feeds.
Perhaps legal action could be taken on the basis of price fixing/gouging if they were to actually drop Apple because Apple would not sell at the price the industry demanded?
Cyric Zndovzny at your service.
If they did that, jobs would give the RIAA a big "go fuck yourself" and sell ipods at cost for a while...
Especially when I can get it in a much friendlier format for free.
Now, I'm not trying to advocate piracy of any sorts in this post. But EVERYBODY knows about the popular P2P networks. If you raise the prices, more people will stop buying.
It is like the classic supply and demand scenario, but there isn't much demand, and the guy next door is handing out stuff for free.
of giant businesses who seem to have no idea just how good they've got it.
this is 2005.
the fact that people are still paying for downloads at all (including me, I have well over 200 iTunes songs) in 2005, YEARS after Napster started the easy-as-pie method of music aquisition... do the music companies really want to go ahead with this? do they want to return to the days of talking about free tunes on Napster instead of paying for iTunes?
MORTAR COMBAT!
I'd love to see Jobs tell the RIAA members to go screw themselves and open up iTunes as a 'label' for independent artists most of whom would probably be happy to take a much smaller cut then the leaches at the labels do. Talented muscians don't need multi-million dollar marketing campaigns to be successful, they just need an audience. And iTunes could deliver that audience much more efficiently than Warner or Sony/Columbia ever could.
1. Apple needs to make a deal with Apple Records to free themselves from any restrictions.
2. Apple starts a "record" company.
3. Apple doesn't screw artists and big names flock to them.
4. Apple uses "pod casts" to replace radio air play to promote new artists.
5. Apple cuts out the middle man so artists and Apple now split the profit so each side makes more money.
It is the end of the world as Warner and Sony knows it... And we all feel fine.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
That is wht the Tech big wigs need to do. Google should buy one, yahoo, MS and Apple.
I watched a business show about this and tehy said that each of those companies market caps are large enough to buy one company each. then all you need to do is make the tech companies share the catalouges amoungst each other.
Tech companies that are trying to sell their technology will have a friendler stance about copyright and the consumer than the record companies would.
I am the Alpha and the Omega-3
I quit buying cd's when the ipod came out. I'm on windows, so I had to wait a while with no cd purchases until the PC ipod units came out. Now I buy music online all the time.
So yes, ipod sales drive online music sales. The prices aren't out of line either, especially for whole albums, which is what I tend to buy.
What miffs me are albums that are only partially available. Why do they do this when they also have the option of making the song available on the album only? I don't get it.
Also, doesn't this mean that as a song rises in popularity, it gets more expensive? That's kinda what they want, right, so wouldn't that drive demand down? Economics 101, HELLO!
wasn't it in japan a few months ago where sony artists were tired of the bickering between sony and apple in regards to itunes that they just said kcuf it and started releasing their songs on itunes in spite of their contracts?
maybe the same thing can happen here with artists backlashing against the riaa (who are supposed to represent the artists themselves but seems more likely they are representing the executives). but i guess that would depend on the character of the band.
"Tread softly because you tread on my dreams"
iTMS is destroying the RIAA's right to speech:
1. The RIAA can't pat iTMS DJs and Producers to force users to download the hot song of the week.
2. The RIAA can't pay iTMS to list the proper version of the Top 40 Charts.
3. The RIAA can't control which markets get their music, heaven forbid a black consumer getting a listen to Kenny G by accident.
[/kidding]
The music industry needs to see what would happen if they kill this cash cow by trying to milk it too hard. One day would probably not be sufficient, so let's have a week, or maybe just 5 days, where you can't buy anything from the iTunes store. Make it be the last week or 5 days days in a reporting period, because a lot of the pent-up demand will recover the next week, probably.
Better yet, let's see Steve Jobs say, okay, you want variable pricing, we'll hook up with Magnatunes and CDBaby and sell their tracks for 50-75 cents, or something. Those indy labels could really use the visibility, and the artists might see more revenue even at that lower rate than the ones beholden to RIAA and the big corporations. Some of them might even ask Apple to distribute their tracks as m4as, not m4ps, and would probably volunteer a lot more free tracks of the week.
Also, I can't believe they want some of the revenue stream from iPod sales. They had nothing to do with their creation, sales, marketing, etc. They're just becoming more obviously money-hungry than ever before.
Not only would this be a good time for Apple to implement this as a sign that they won't back down, it would finally free me of checking RIAA Radar everytime I go to the iMS to download a song!
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
now, IANAL, but isn't attempting to force pricing schemes on the retail end illegal?
Nope, it happens all the time, at least in Canada. I recently bought some 33" Goodyear MT/R tires for my Jeep. Vendor couldn't publicly quote a price for them in writing because he'd lose his license to sell goodyear tires.
While I agree it's anti-competitive, it happens in industry all the time.
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
The Music Industry is right about the need for variable pricing.
New tracks should be $0.99
Older tracks should be $0.50
Oh wait -- you actually think that a track is worth more than a buck even as you try to continue to limit how I listen to that track?
I don't think so.
I'm not a huge fan of DRM, but Apple does make it fairly simple and it doesn't really get in your way for day to day uses like some others do.
RIAA's cut on these tracks is PURE PROFIT. They're not paying for the bandwidth to download the music. They're not paying for software changes to showcase the music. They just get a big, fat check. And as is typical with these greedy RIAA execs, they want more. Why not, they've been stealing from musicians for decades without providing real value added services, so they feel they should get a cut of everything. Hopefully they're going to get a dose of reality real soon.
How exactly is the relationship between Apple and the large record companies defined? Surly there is some kind of contract in which Apple pays X% of of an iTunes sale to the song's owning record label. If they record labels back out, won't it result in some sort of contractual breach? (Anyone who knows more, please reply)
I think the record companies (unsurprisingly) underestimated the the kind of sales that the iTMS would do. Now perhaps they're finally waking up to the reality of the situtation, that this is how people WANT to purchase and enjoy their music. I mean, how long ago was the old Napster? More than 5 years. FIVE YEARS. After all the bitching and moaning, the labels STILL don't have their own digitial distribution mechanisms. It just shows that the labels were and are still sooooo dimwitted and clueless. And now, "oh wait look, Apple is making money on this online store that we should have made ourselves 5 years ago to react to market demand. Apple should give us more money. Wahhhhh!" Well I say FUCK YOU record labels. You did this to yourself. You underestimated the market, your customers, the technology, and EVERY OTHER ASPECT of running your businesses. You signed deals with Apple letting them sell your music for 99 cents a track. It must have been a good deal then, right? Why else would you have signed to such a deal? If you're unhappy with the terms now, thats your own fault.
"To lead the people, you must walk behind them"
They should do what some slashdotter wrote a while ago.
When you select songs, the song price should be written and additionally the break-up of where the money goes. When they see 9c to apple, 90c to the record company and 1c to the artist, they'll understand something is wrong.
Then they'll see indie labels, 10c to apple, 40c to record comapny, 50c to artist.
And then indie artists, 10c to apple, 90c to artist.
^_^
Musicians with big label contracts have puppet strings firmly attached. Sure, they might like to make more money via direct sales through Apple but the sales side of the music biz is 98% promotion, not fan devotion.
I agree with your statement, but consider this:
If the RIAA takes its ball and goes home, Apple will be able to only promote artists who aren't currently under RIAA control. Crap coming from the teen-idol production machine and manufactured "counter-culture" crap that the RIAA promotes (think "St. Anger" *PUKE*) wouldn't be on iTunes. The artist would then have a sizeable captive audience without the RIAA controlling who's popular and who's not. IOW, Apple just might have the needed intertia to compete with the RIAA itself, and give the artists more control over thier destiny.
I say that's a good thing.
Soko
"Depression is merely anger without enthusiasm." - Anonymous
If that's what Apple is thinking, and I'd love to see them do that, they'll call their bluff on the threat.
This is great.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
[QUOTE]Good luck walking away from that, Mr. Nash... [/QUOTE]
I doubt he is seriously contemplating it, he would be almost sure to be hit by a class action law suit from his investors if he did and would probably lose such a suit.
LetterRip
Does it really matter? The way you put that makes it seem like you think it does, but I can't for the life of me think what the issue is. Sure, Apple will want to keep song prices low to make iTunes more attractive/competitive....but so would any other music store.
The fact they also sell the music player as well....well, so what?
Were I Jobs or Apple, I'd pull a preemptive strike. Announce "Since Warner Records doesn't feel the agreement with iTMS is fair, we've decided to resolve the problem. All Warner titles have been removed from iTMS and Warner Records has been released from the agreement. They're now free to market their music through a service whose pricing is more in line with their desired price points.". Then sit back and watch Warner scream as their sales plummet.
Now "the Association" approaches a major customer of said companies and attempts to dictate an increase in prices with the threat of all of its members shutting off said customer in concert.
Please, please, PLEASE do it, RIAA. I'm begging you, don't chicken out. Jobs and Apple have lawyers and aren't afraid to use them, and this one might even qualify for Section One treatment.
Lacking <sarcasm> tags,
I think the name for this kind of request is "Protection Money." The record companies are used to being the biggest kid on the block, they are used to winning unbalanced cases with hoards of lawyers, if the gloves really come off in this fight Apple will be more than they can handle. Steve has already publicly called them greedy - but what if built into the iTunes music store when you went to buy music was a brief explanation of why people can't buy their music, and a signup page for a CD sales boycott? How about a link to lime-wire? What if through iTunes, I can start a musician account with Apple, upload my music to them and make 15 cents a download? The record companies need to realize just how much backlash there could be.
Correct me if I'm wrong, but I seem to remember reading that the music industry actually makes more money on each 99 cent download than it does through physical cd sales, simply because there is virtually no overhead involved (for record companies) in online music distribution.
Though I think the music industry is acting in an exploitative and short-sighted way, I'm not terribly worried. The general consensus from the tech crowd seems to be that $3 a song is gouging. Supposing Apple caves and lets labels price their songs higher, consumers will reject price gouging and go back to piracy. After all, the labels aren't just competing with each other, they're competing with illegal P2P. Consumers have shown that they'll pay $1 for a song legally, but my guess is that if $3 is too much, the labels'll know it pretty quickly through lost revenue and prices will drop again. To play devil's advocate, though, consumers may actually be willing to pay more $ for certain songs. All songs, after all, aren't created equal, and I'd rather pay $5 for one good song than $1 for 20 bad ones. In any case, I'm guessing prices will be exactly where they should be in several years.
My dream scenario for this starts with the RIAA following through and yanking the rights to all of their music from Apple.
Should this happen, Apple will have to find something to do with iTMS - I think shutting it down would be their very last resort. Much more likely, Apple cashes in on what little "counterculture" street cred they might still have, and starts courting independent bands and labels.
Freed of the insatiable greed of the RIAA, they and the indie lables start turning the store into a much better service. The samples will get longer, and you will even be able to download full songs from many bands looking to market their new albums. The iTMS becomes a worthwhile service, and rapidly gains popularity. Pundits declare it the center of the independent music Universe, and hail Apple as the Greatest Company on Earth.
On top of that, Apple starts really capitalizing on the podcast thing. They start arranging agreements with various news and sports radio networks whereby people can subscribe to shows for a price. Apple breaks out of the young technophile music-head market and starts getting the attention of NPR addicts. (However, they will draw ridicule when their ad campaign featuring sillhouettes of people wearing headphones sitting at desks or driving home in traffic and being less bored than normal is launched.)
Through it all, Apple fares fairly well, and may even lose some of the "evil corporation" reputation it's been earning lately, although its profits may take a slight hit as the iTMS becomes more expensive to run. iPod sales will stay where they are, because iPod sales drive iTMS sales, not the other way around. Customers aren't hurt because there are plenty of other places to download MP3s on the internet.
The RIAA, though, ends up with egg on their face as their play at forcing Apple into a position where they can be accused of (and sued for) actively supporting piracy with iTunes and the iPod fails miserably. They also hurt their sales as they close down a small but noticeable source of revenue and it is promptly replaced by the biggest advertisement and point of sale that their competitors have ever had. Their reputation suffers further as a few more people are added to the ranks of those who think the RIAA is a pack of fucking morons with a greed problem.
I wouldn't worry. iPod nanos are going to sell like hookers this Christmas. This is a lot of public snorting from a few labels that won't go anywhere, because Apple has the upper hand--they're the #1 music store and are surpassing even P2P networks in usage. Steve Jobs doesn't give a shit if Warner pulls out. Without Warner music on iTunes, iPods are still just gonna keep on sellin' while Warner loses cash to non-sales and piracy, especially when video-enabled iPods come out.
.99 per song ain't gonna happen on Jobs' watch. Apple did focus studies that determined .99 was the sweet spot.
This is just the game they play. Higher prices than
"Sufferin' succotash."
How long until Apple simply approaches all of the musical artists and licenses "direct" for digital. RIAA actually has made a mondo mistake. They have licenses to distribute the recordings. Correct.
However, RIAA has also put much effort into distinguishing "analog" from "digital". Enough so, that a good lawyer could argue a case for the artists that RIAA was not granted the right to collect "digital" royalties.
(This actually came up with the lawsuits against "web radio" and the creation of a "digital royalties" collection agency.)
However, it could be pushed by the artists that they are distinct. And they could then license the "digital distribution" exclusively to Apple. Even if the case is lost or held up in court for years of debate. Apple could sign "digital distribution rights" with new bands. Keep the price $0.99 cents and split $0.25-$0.50 with the artist. Artists would see much more profit from Apple's model. While at the same time the record labels would see a loss of revenue. Eventually, the record labels will go bust and Apple will be able to buy their portfolios (just like RIAA did with MP3.com & Napster).
Touche
Its the way of the future, except the bit about 10c to apple. Once major artists start coming out of contract they will start recording and distributing their own music. iTunes exists because of the deals Apple have done with recording companies. Web downloads are a pretty good distribution mechanism and other distributors will spring up.
The recording companies know that this is the beginning of the end for them.
http://michaelsmith.id.au
Oh, they have a reason. Yeah, it's a cash cow now. But imagine ten or twenty years from now. An Apple that has 50% of the music market is an Apple that holds the labels by the balls. More importantly, it is an Apple that no longer needs the labels.
If Apple gets a big enough market, it can start selling artists directly. That is what the labels are really worried about. All the rest is just rhetoric.
The cake is a pie
"Music Industry Threatens to Commit Suicide"
I'm sure some artists (Indies) will continue to sell through ITMS, and I already have tens of GB of music. I will listen to that and not purchase a CD unless I like most of the songs and can rip them to my iPod. I had not purchased any new music for years until ITMS came along. I was not stealing it either. I just stopped paying $15 for a CD with one good song.
My iPod revolutionized how I listened to music I already owned, ripping CDs I had purchased over the years. ITMS got me buying music again. I have purchased 326 songs from ITMS since its inception. That is up from zero per year for several years. If the music industry wants to cut its own throat, I'll let them. Piss on them. I can't stand those greedy bastards. The RIAA and MPAA are some of the worst scumbags on the face of the earth. They have no respect for the rights of others, and they are totally consumed by greed. How many cars and multi-million dollar homes do you need?
Yes, I'd rather blatantly steal all the music from here to the end of my life then have to pay anything to the bastards that run these companies. I'm sorry to the artists but lets face it, they only see a 10th of the actual cash these companies are actually raking in.
What an amazing statement! Amazing simply because it will resonate through the ears and hearts of music purchasers everywhere.
I don't mind a company earning money. Hell, I enjoy it since it helps me pay the bills every two weeks. But greed so blatant and obvious is going to kill the greedy bastard in the end.
Not sure if this will be the end of the music companies, but I think they are buying the shovel to dig their own grave.
I'm not prejudiced. I hate everyone equally.
The music industry better step it up! If they want to stay afloat, they should allow the 99 for all policy to stay! What is better, getting a little under a dollar per song ($10 for an album), or having everyone just pirate and take it all for free? Actually, if they played their cards right, it would be more profitable to lower the price. I would buy a lot more music if it were less than a dollar. In fact, anything 75 or lower, if I heard it, and didn't think it was terrible, I'd buy it. It's time they started realizing that they work for us. We pay them for entertainment. Well, you know what? Screw them. I can live without legal music. I can live with what I've got, or just acquire music from others. By the way, I do not in any way condone or approve of stealing music. Remember that every time you download a song, God (or Buddha, or whatever) kills a kitten!
---Without electricity, we'd all be surfing the net by candlelight.
In other words, it was a trial balloon, to see how people would react to the idea.
Free Hans!
But how will I get my music? The same way that I get the majority of my music now: Buy Used CDs. No (new) revenue for the labels, no DRM on my music and I am supporting a local business that buys and sells Used CDs. I could use P2P for anything I can't find used, but I really can live without it; I have way more music right now than I have time to listen to.
One more point: The used CD market really sets the value that I'm willing to pay per song. Most used CDs are available for $6.99 to $7.99 (sometimes even less). So if there are 10 tracks on a CD, they are only really worth $.80 max / track. I may pay $.99 for certain songs if I don't want the whole album, but no way would I pay more than that.
....just go back to stealing music.....
You use the wrong term. It's called copyright infringement. When you steal something, the original owner no longer has whatever you stole. It's not piracy either, since you never board a ship on the high seas. Words must still have true meaning.
All theory is gray
Well, in order for the record industry to even function, they need to use my ears to deliver their music to me. I'm not getting paid. I think if the record industry wants to continue to charge for music, that I should get a some reasonable cut of that as my ears are irreplacible assets that they have used for free for long enough.
The Admin and the Engineer
They are playing with fire here, they need to apologize quickly to Apple and act like they never said anything at all. I see a few scenarios that can evolve from this:
RIAA Wins
1) Apple bows to the RIAA and begins charging more for songs and sharing profits on devices themselves with them. I find this one the most unlikely to happen.
2) Apple takes RIAA to court and loses; it's possible, but I doubt they would lose.
Apple Wins
3) Apple denies the RIAA, and the RIAA drops Apple's iPOD. Apple starts its own publishing company and uses the iPOD's ubiquitous nature to rake in many artists and privateers. Now the RIAA has a fight on its hands for the domination of the music industry, where before there was only a medium for them to make money.
4) Apple takes the RIAA to court and wins ruining all possible chances in the future of the RIAA being able to racketeer companies out of their own revenue. And, the settlement would probably require they drop the price per song and/or give Apple even more % of the profits, instead of raising it.
They should probably be happy with the billions they're already making and not try and ruin a good thing. Steve Jobs doesn't take threats lightly.
Damn skippy.
I pay on average $3-$8 for used CDs in "like new" condition, via Amazon.com.
No low-quality downloads, no DRM, no overpriced songs I can't play where I want, on whatever device I want. No bullshit.
Why in the world would I ever even consider paying a dollar per TRACK of the same music, only to have harsh restrictions placed on me as to where I can play it, and how many times I can copy it to other devices?
Screw that. As long as I can still buy CDs used, that's the route I'll take. If iTunes Music Store goes the way of the dodo, I guess it won't bother me.
Between you, me, and the dodo, though, the RIAA's dumber than a sack of hammers to let a potential cash cow like this die.
Free money. For a product they already have. Being sold by someone giving them a cut. For something they otherwise wouldn't be selling at all.
What collossally stupid people must they be, those in charge of the major labels. These are potentially the best years to get in on the ground floor of the internet music revolution, and here they are, trying to stamp it out and drive themselves out of business.
Heh.
And I thought music execs liked money. I guess they don't.
And the circle of life continues to spin, occasionally wobbling on its axis thanks to the weighty presence of dumb.
Mind you, I'd like downloading music to only be referred to as copyright infringement.
I don't get it.
I have stated several times that I buy CDs, burn them and ditch the shell. I get called a thief, yet I am not a thief. Simply a copyright abuser. And, this is why. How can I buy music from services who may not exist in a couple of years?
Copyright also gives me the right to copy something at a lower resolution as a copy--fair use--regardless of what happens to the original. Dear RIAA, go f yourself.
ITunes is proof that Steve Jobs is both brilliant and a fantastic liar.
See, the Big 5 are deathly afraid of suffering from the "MTV syndrome" when it comes to digital downloads. See, originally music videos were seen as an interesting way to promote and "package" artists which proved incredibly sucessful through the 80's and early 90's through the partnership of the big labels and MTV, which initally was desperate for content for it's PAID service, then they switched to an advertising model with the videos as content, and the station took off. Eventually of course, the MTV people realized that the videos THEMSELVES were advertisements and started charging for airplay (no payola laws for music videos afaik). The labels didn't like being held hostage this way and it's one of the big reasons for the decline of actual music videos on MTV and MTV2.
iTunes was sold to the Big 5 essentially as an experimental system for devoted Mac fans. The software would ONLY run on Macs and the iPod (which would only work with Macs). This was a critical sales point because the Big 5's other major concern was widespread piracy of digital music tracks (not that that wasn't happening already). The Big 5 recognized that Apple is a relatively small player in the PC space so that even if their DRM protection was cracked, if the software/player only worked on Macs there couldn't be THAT much piracy since only a relatively small market used Macs. They also didn't have to worry about the "MTV syndrome" because incompatibility with Windows, Linux, and other big MP3 player vendors (Rio, Creative, etc.) would keep iTunes confined to a niche market.
Hasn't turned out that way has it?
http://www.magnetbox.com/riaa/
I've been RIAA free for over four years now, and believe me, there's precious little out there from RIAA represented musicians that you can't live without (as in none.) On the other hand, there is a TON of excellent, heartfelt, meaningful music out there not represented by the RIAA. I hope everyone here complaining about the RIAA is putting their money where their mouth is and not supporting a group whose policies you disagree with.
I certainly hope Apple will resist the effort at corporate blackmail on the part of RIAA members. It does own its own sizeable chunk of recording rights, which it bought a couple of years ago for a few cool billions, and I'm sure that 600,000 title catalog has gown.
However, in Japan Apple did ultimately cave-in on the matter of variable pricing. The Japanese labels refused to budge, and Apple wanted to get that iTMS Japan store going. The tunes it sells are roughly at parity with the prices charged at other Japanese download stores. iTMS is still, however, wildly more popular than any other store here, which has Sony frothing.
It would be interesting to see if iTMS could implement a model similar to that used by AllOfMp3.com (but with no doubt watever as to legality).
The prevelant wisdom here, that Apple has the labels by the royal jewels, is wrong, though. These people have incredibly deep pockets, collectively far deeper than Apple's, and could quite easily weather an losses in revue incurred if dropped by iTMS. There are still plenty of other download services that they sell through.
The issue is whether Apple feels spunky enough to be a maverick, kiss the the big labels good-bye (and along with them the major acts), and risk making a go with smaller labels and independent artists. If it is, then it can deal with the labels on its own terms by simply ignoring them. The recording industry as represented by RIAA members is just one--admitedly very large--dimension among many. As it has demonstrated its fortitude in being a maverick computer company, bucking the odds in a more-or-less Microsoft/Windows universe, so might it equally succeed with music.
The other thread of wisdom, that the buying public will cheer at this Apple toughness, is also a bit too optimistic. Most of the downloading public doesn't give a mouse fart in a hurricane. They want their popular tunes, and it doesn't matter that few folks here think most of that popular stuff is shite. Call them Philistines if you wish, but they buy the music that's popular.
Someone else has noted here that the real issue is control of distribution, and there of pricing and who gets the lion's share of profit. This is entirely the case: RIAA members see their distribution networks under threat if not under seige, and they are willing to dig in and take whatever immediate financial losses may be incurred to assure their longrange control of the distribution network. Control of that in turn assures that they can charge whatever they wish.
So the further question facing Apple is whether the iPod would continue to be a hot seller if the major labels were out of the picture, and if th iPod would continue to drive music sales for alternative independent arts and small labels.
There are many comments here about Apple starting their own label, and how they can't right now because of the Apple Records lawsuit. Why not leverage the Pixar name and start a label under that? Promise the artists something insane, like a 70% cut of all sales on it for switching from a RIAA label to Pixar. We already know that artists are getting some insanely low 1-2% cut, or even lower in some cases now. If they buyout their contract, or fulfill the contract by releasing the remainder of their albums, there is nothing to stop them from moving.
Apple/Pixar are currently in a perfect position to really shake things up in the Music industry, and if I were any of the major labels, I'd be really careful not to piss off Jobs. The only thing the labels are bringing to the table right now is their contracts with artists, and if Apple owns their own label and those contracts expire, there could be plenty of incentive for artists to give the finger to RIAA labels and switch over.
Online music distribution is where everything is currently heading, I would venture to guess that purchasing a CD in 10 years from a retailer will be next to impossible. I also think that it is in Apple's best interest to form their own label (or buyout Apple Records) and use that to distribute their music. If the big moneymaking artists signed with the dinosaur labels start leaving and going with another label that treats them right, those labels will be screwed. It's a realistic situation, and it's going to happen at some point (even if it's not with Apple).
Another thought on this, the label could not initially rely on online distribution only. They need to have some way for people to buy their albums at traditional retailers. Do they print and press CD's and distribute them, or do they use some of the on demand CD duplication technologies that are out there? It certainly would be nice to be able to walk into a store, select 10 different songs from 10 different albums, hit Print and have a CD with a nice printed cover in my hand in a couple of minutes. Not only does this provide some novelty and convenience, but it greatly increases the amount of different music that a retailer sells. I know when I go into Target and look for something that's not mainstream, I can't find it. Having a Kiosk like this would be able to provide me with literally everything I was looking for (since it would be connected to the net and have full access to the iTunes music store library).
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