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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.
*gasp* MORE people might actually BUY your music... NO the humanity, the HUGE MANATEE!
"As far as I'm concerned, I prefer silent vice to ostentatious virtue." ~A. Einstein
To echo comments in the previous article, asking Apple to share iPod profit is like an electric company asking Maytag to share their profits from selling washing machines. (Or like oil companies asking automobile manufacturers to share their profits.) And so on...
If the execs really want to see what drives people toward digital downloads then they should look at iTunes. iTunes is what makes this all so easy so let's give the execs %100 of the profit from iTunes.
Oh! That's right... iTunes is FREE!
Q: I am short, useless and provide no value. What am I? A: a sig
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
This just another attempt of theirs to eschew their customers and get a bigger slice of the pie. Methinks their egos have grown too big for their britches.
Forecast for tomorrow: A few sprinklings of genius with a chance of DOOM!
How many hits does the iTunes Music Store get in a day?
Hell, how many does it get in an hour?
Good luck walking away from that, Mr. Nash...
--R.J.
Electric-Escape.net
'What if Jobs says 39 cents or 29 cents per download - what then?
Someone is threatening their monopoly.
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.
If they close iTunes, iPod users will just rip their own music (and share it) leaving 0 revenue.
I don't read your sig. Why are you reading mine?
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.
The recording industry is 'picking on someone it's own size'. Apple may not be able to really compare equally with the entire industry, but it has enough notoriety, money, marke share, and general influence that I don't think the RIAA or anyone else is really going to want to get into a legal / PR brawl with them.
I know nothing
It's probably just a bluff, but if the Music Industry does go through with this it would be incredibly stupid of them. I know it would be contrary to their agreements with Apple Records, but if the music execs do go ahead with this, I think Apple should start selling music directly from the musicians rather than going through the labels. They could simultaneously reduce the prices and give the musicians much more than they get under their current contracts.
Facts do not cease to exist because they are ignored.
a nice move would be to call for price cuts - about 50% would be about right.
Jobs should do this in front of Congress, if available.
I'll bet he could disclose how little it costs to distribute the songs, and pose the musical question - "How Much Profit?"
You can't talk about Wikipedia's flaws on Wikipedia
Ford and GM announced today that unless Exxon and Shell start sharing gasoline revenues, future SUVs will run on ethanol.
Light a fire for a man and he'll be warm for a day. Light a man on fire and he'll be warm for the rest of his life.
now, IANAL, but isn't attempting to force pricing schemes on the retail end illegal? aren't they only allowed to change their wholesale price to the retailer?
The recording industry never saw a cash cow they didn't want to kill.
I used to have a cool sig, back when I cared
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.
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.
Buy what if i own a company that made most of the clothes that are washed in Maytag washing machines I should get a bit of the profit then...
Right?...
I don't see them closing iTunes Music Store. If all of the labels backed out, Apple would probably start focusing on indie bands, and put more focus on the podcasts. I can see them allowing indie bands to set their own pricing on their songs, and providing for "premium podcasts" that require either a subscription, or purchase of individual podcasts. In fact, I wouldn't be terribly surprised if they start doing that anyways.
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.
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.
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
One first step would be to make it illegal for anyone to receive financial renumeration for lobbying a congress critter. Why should a group or individual with money be able to hire someone to go lobby when we working stiffs have to juggle career, family, and fun with any political activities that can be fit in?
Let's level the playing field and return government back to the citizens instead of the highest bidder.
So what about it Apple?
Abstinence is a government conspiracy. www.SafeSexZone.co
if they did that, Jobs would give the RIAA a big "go fuck yourself" and sell ipods at cost for a while
Worse! Steve Jobs could make HIS OWN RECORDING COMPANY! *GASP*
RIAA, meet your nemesis.
(Boy, these times are getting more and more interesting)
I feel for the music industry, because they were stupid enough to challenge Jobs to a Mexican standoff.
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"
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.
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]
Why should Apple be treated differently than all the other music player manufacturers in history?
Did the music industry get a cut of Sony's CD player sales? Toshiba's? JVC's?
It's time for the RIAA to have a RICO case brought against it.
I don't think there are many who love the iTunes music store so much that they run out and buy iPods. Sales may take a hit if the store is brought down, but the iPod won't lose its status any time soon. Anyway, there are so many other ways to acquire music for it-- and more importantly, most of us already have the collection to fill it.
What I think we may be looking at is that the labels want their own online music services (and in the case of Sony, also sell their own players) so there is no moody Apple middleman between them and the consumer. Again, Sony is already there, and others may be too. I'm not sure where the trails of Warner's parent and sister companies lead.
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.
Reading Slashdot is ruining my spelling and grammar.
No. In the case of "Big name artists", who cares about their new Albums? You only care about their back catalog (i.e. albums they have already recorded.)
By definition every single record that comes out is a crap shoot. So, let's say Apple could sign, let's say Paul McCartney. That won't help them with Beatles music, Wings, or McCartney's solo albums from the 80s. The best you could hope for is signing an established artist who is making hit albums currently.
These people either already have gone independent, or else they are probably already in the pocket of the record companies. I don't see this plan working for any established artists.
For new artists, sure they way to go seems like being independent and marketing yourself via the web and via iTMS. I'm not sure how this gets you any radio play, or on MTV, but it probably beats the extremely bad deal that most people get from record labels. Again, I'm not sure what Apple would have to gain by being "their record company". Why not just let independent labels sell via ITMS? Otherwise, Apple would end up funding marketing efforts for thousands of flop albums.
Again, the problem is the existing back catalog that the labels own.
Avoid Missing Ball for High Score
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.
Why are they going after iTunes, which coss 99 cents, while many (most?) other WMA services offer tunes for 89? And why do they care how much the retailer actually changes the consumer for the song? Shouldn't the record company just be concerned about how much money it's getting from each one, regardless of the retailer's price (leave the reatailer to decide how much profit they want after that)?
R.Mo
Fine with me, I'll just go back to stealing music.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
the real story is that now w/itunes there is a 3d party who has real life numbers on music sales. guess who doesn't want that info out of their control? the companies. why you ask? because the artists now have the ability to verify the companies audits. hmmmm whoz getting fsckd
The record labels are biting the hand that feeds them. Talk about choking the goose that laid the golden egg, and now they want to break its neck to get the gold out all at once.
Stupid stupid stupid.
I hope they get what they deserve.
Six weeks in hell.
Raydude
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.
First of all - this is a power struggle, plain and simple. The recordcos are, once again, shooting themselves in the foot. They seem to think they're still in charge - Apple should show them otherwise. The first record company to pull out of iTunes should be made an example of.
Let's say Sony decides to pull out first. Well, then everytime a customer tries to do a search for one of their artists or songs (like Switchfoot for instance), have a big, HUGE message for the customer about how Sony wants to charge more than anyone else does and that Apple isn't playing. Let the iTunes customers know about what Sony is trying to do and to contact them to protest their decision.
Then when Sony finally comes back to the table, Jobs should demand that Sony's songs go 2 for 1 for a time. Jobs has a lot of power here - iTunes is the number one place to get digital music. I hope he realizes it.
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
ITunes is doing a lot to keep the money rolling in. While they may not make as much per track I guarantee that the labels are overall selling more music per listener through ITunes than they do through physical CD's. It's much better suited to impulse buys and it's less noticeable when you buy a lot of music because the bill doesn't show up til the end of the month.
ITunes provides a viable way to get music quickly the moment you want it and it gives you a way to do it that insures the music industry gets paid. If they cut off the air supply to Itunes, all of that file swapping that happened before is going to go up exponentially. So rather than diverting those users back to physical CD's, they will simply lose them as customers all together.
Frankly if Apple's smart they could probably play such a stand off against the labels quite well. Think about the average person's perception of IPod, ITunes and Apple versus their perception of the average music label. Apple can go direct to artists and bypass labels all together. Sure a lot of artists will have contracts that keep them locked into the existing labels, but with people already hooked into ITunes it will be easier to convert people to newer less well known arists.
So please labels, make a stand so we can finally flush you.
This sig has been temporarily disconnected or is no longer in service
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"
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
bears make money and bulls make money, but pigs only make shit.....
I strongly believe that the way things are presented, including the exact words used, has a great impact on our perceptions. George Orwell built on that with "Newspeak" in his "1984". We are seeing this every day to a greater and greater extent from politicians and people in power (PATRIOT act, for example).
This is why I think it is very important to pay attention to the words used. In this particular case, the "music industry" implies that musicians, composers, authors are all lumped together. We need to distinguish between the greedy b****rds who run the music publishing cartel from the rest of the "music industry".
Similarly, we should expand DRM to "Digital Restrictions Management" because that is what it actually is.
It may not make an immediate impact, but over time more and more people will understand what the opponents of DRM and RIAA have been trying to say for a long time now. Education is the most effective weapon against oppression, and using the right words is one part of educating those who "don't get it".
If Warner and the rest of the labels want to look a gift horse in the mouth, don't give it to them. Saying you don't want to sell downloads at iTunes would be like saying you don't want to sell CDs at Wal-Mart: marketplace suicide.
How ya like dat?
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.
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 RIAA isn't supposed to represent the artists. It represents the Recording Industry Association of America, i.e the record companies, i.e the executives. They don't give a fuck about the artists.
(mods, go away, use your points where they're needed.)
^_^
I guess they don't consider extortion by big business stealing
I guess to them stealing is only stealing when it's an individual (usually a minor) who they can then threaten with a lawsuit
(Isn't that extortion also?,)
Kenneth Hertz, partner at Goldring Hertz and Lichtenstein LLP, a law firm representing major recording industry artists said "What if Jobs says 39 cents or 29 cents per download - what then? The industry can say, OK we'll cut him of - very few people buy music from digital downloads... [Jobs] will figure out another model ... The industry got together and said 'We don't want another MTV'. Well, now we've got another MTV, in Apple. And we have to deal with it."
So, I have to ask...if very few people buy music from digital downloads according to this suit, then what the FUCK do these guys care what price Apple sells their music at? This is greed. Pure greed. The recording industry is so used to making reams of cash without doing any of the actual work that they're lashing out when someone tries to take that away from them.
And then to turn around and say they want a cut of the profits from the physical iPods themselves shows they have HUGE balls too. I mean, do they get a cut from every CD player sold that plays their music?
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.
Or better yet, I won't even listen to music anymore. I'm so pissed off and disenchanted with the whole industry I'll just sit and listen to the birds outside my window...or laugh like a brook as it trips and falls over stones on it's way. Sorry, was channeling "Sound of Music" there....DAMN!
"Leo Fender was in a 'state of grace' when he designed the Stratocaster." -- Paul Reed Smith
You'd have a lot of trouble convincing a judge that the Apple enjoys a monopoly on MP3 players and online music stores.
Its like saying Ford has a monopoly on Ford automobiles when there are plenty of competitors.
There is no monopoly without a relevant product market. There is no "iPod" market. There is only an MP3 player market.
I know there's a lot of love for Steve Jobs around here, but he's a monopolist at least as far as iPod goes.
That's like complaining Gillette has a monopoly on Mach-3 razor blades, except that Apple's razor can also use generic blade cartridges. It just can't be used with the proprietary DRM'd WMA blades of the other razor makers.
And further, I don't need to own an iPod to play DRM'd AAC files. They'll play on the iTunes application on the computer too.
(I'm not analogizing the razor-and-blades marketing strategy to the iPod and AAC.)
Oh, say does that Star-Spangled Banner entwine / The myrtle of Venus with Bacchus's vine?
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.
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
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)
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
consider what a "music company" is. a tower full of suits running drugola and payola, seeing and being seen in expensive fancy places, and in the case of rap imprints, the odd gangland style shooting in an expensive fancy place. there are a couple dozen A&R guys around signing acts and leading them into the studios to cut "acceptable quality" masters, at the industry's highest rates, on credit against receipts from sales. so big-hit artists start out broker as the record goes higher, due to label-paid publicity tours and the like they have to pay back.
apple doesn't need any of that. they have an eMarket that is instantly recognized and considered grade-A, they have a track record of paying their artist revenues in full and on time (which the big labels shockingly have never had,) and they have giant media buzz as well as street cred.
no, apple doesn't need any steenkin' labels. the steenkin' labels need apple. the artists can always re-contract with iTunes music service and be done with big label bullshit. ITMS needs to get an office, phone, and a couple more dealmakers, and the "major record labels" are all dead as doorknobs.
the artist as their own label, with a distribution network of millions of hits daily... that's what ITMS could be.
the line forms at One Infinite Loop, please don't block the bus stop as you snake around the block......
if this is supposed to be a new economy, how come they still want my old fashioned money?
Or better yet, I won't even listen to music anymore. I'm so pissed off and disenchanted with the whole industry I'll just sit and listen to the birds outside my window...or laugh like a brook as it trips and falls over stones on it's way
The more you create on your own, the broader and better your taste in music/art/etc becomes.
Fuck the music industry, humanity has created great music for thousands of years without their nonsense..
Your hybrid is not saving the environment. Its purpose is to make you feel good about buying something.
Force iTunes out of business and I'll revert to stealing your music.
Downloads on iTunes aren't cheap. On the contrary, at a buck a song, it is only marginally cheaper to buy music on iTunes (though arguably more convenient). So, with no physical product to produce and distribute, we are being charged almost the same amount as if we go into a store and buy a CD? And you want to charge more?
What part of 'greedy fscking assholes' don't you understand?
Let's see...
The RIAA claims music "piracy" is the great satan costing them billions in profits a year. Enter Steve Jobs, their great savior with a plan to legally distribute their merchandise over the Internet. He has the resources and has seen the light in the attractiveness of the 99c menu. He has software created to work with his company's media player, a good idea for him, the iPod promotes iTunes and supports the legal sale of songs owned by the RIAA. The plan works for years until someone gets greedy and threatens to pull the plug. I'm sure they know an end to iTunes will force people back to "piracy." Since the RIAA knows this, it is safe to conclude that "piracy" really isn't costing them as much as they claim. Now they want some variety in pricing, no not a drop in prices, only price increases. I guess they like suing people because that is soon going to be their main source of income. Remove people's ability to do something legaly and sue them, makes perfect sense.
F7 doesn't work, ignore spelling and grammar
"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?
I'm curious about who's running the bigger risk... While ITMS sells a lot of tracks, it doesn't contribute *that* much to Apple's bottom line (5% of revenues is the last I heard).
The record companies aren't making that much off selling digital tracks either, compared to CD revenues.
So what's going on is not about the current scene but jockeying for the best position in the long run, assuming that downloads will eventually outstrip CD sales.
The finger
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.
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
They don't really want a cut of iPod revenues. It's just a negotiation tactic to have leverage when they ask what they really want, which is to have more control over pricing in iTunes.
In Soviet Russia, I ruled you
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.
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
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
This post was fucking hilarious and I'm kinda sad I couldn't mod it up.
"I hope I don't make a mistake and manage to remain a virgin." - Britney Spears
Fine
So now what happens?
They have to pull the same stunt on every other joint that is distributing music on-line, Rhapsody, Napster, the Windows Music box or whatever they will call it, Wal-Mart, etc etc
So all of a sudden no more 99 songs at ITMS and the price is $1.99 everywhere else!
And the subscription prices will probably Double! How many people will just CANCEL their subscription services?
Guess who loses? (you already know)
Oh, and if they pull this on Wal-Mart, they'll just pull the plug, Wal-Mart won't play along.
I like microcars
The labels believed that once one company forged a path, everyone else would follow leaving them king of their little fiefdom. Unfortunately for them, Apple was more like an ice breaker in the Arctic. They made their own path and the sea froze behind them. I was of the opinion that they were trying to kill iTunes because they see it as a genuine threat. After reading this article, I am convinced the labels are genuinely too stupid to realize their extremely precarious position. This is, in fact, not a strategy to kill iTunes because of the threat it presents. This is just greed. They really are that stupid. Too bad they don't see the end coming. It'll be like they've been shot in the back of the head. No crys of "Please, please don't kill me! I'll do anything you want! Just don't *BANG*" kind of thing you'd get if you shot them in the face. It's a shame too, because they really deserve to be shot in the face.
There will be no labels for new music soon. Bands will go direct to fans through iTunes, keeping the copyrights to their creations, and making six times the profit margin the old labels would have paid them. They will make the same money going 'gold' as they would have going 'platinum' the old way. You are witnessing a turning point in music history. Music is about to become very diverse and interesting again. Get ready for something besides the same old cookie cutter 'alternative' crap you've been hearing for the last 15 years.
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?
Hi Bill, Steve here. Say, I know we've had a few differences in the past but how would you like to OWN THE FUCKING MUSIC INDUSTRY with me. I'll spin off iTunes into joint venture that we'll share and you and your $27.87 Billion will be used for financial backing. I have the disturbution you've got the cash to burn. And, hey, calling it itunes means apple records(assholes) can't sue me any longer.
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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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."