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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...
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?
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.
no.. that "share" is ipod sales. ITMS barely breaks even.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
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.
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.
They don't want it to succeed. The recording industry actions over the last few years have pointed to a common goal: stop online music distribution. It could never be as profitable for the music cartel as physical distribution. I think they allowed iTunes to temporarily succeed with this plan in mind all along so they can later kill it, to establish that there is no market for online music distribution and people can now go back to paying $20 for a CD with 2 good songs on it. But it's too late for that to happen now. The only thing that will ultimately pull the music industry's collective head out of it's collective ass is when well-known artists bypass them altogether. When things like this happen, that day will come sooner rather than later.
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
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.
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
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
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
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.
This would be such a dream come true for many people and for so many reasons. Imagine an independent (non-RIAA) label with the distrubution clout and exposure of one the majors. It would revolutionize the "biz".
I came to the datacenter drunk with a fake ID, don't you want to be just like me?
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.
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.)
^_^
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
The record labels are biting the hand that feeds them.
They bite the vendors, and they screw everyone else, including the artists and the buyers. If this is not monopoly abuse then I don't know what is. I think your average drugs dealers is a bit better than these guys - even they aren't, at least the law knows how deal with drugs dealers.
Jumpstart the tartan drive.
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?
Because Apple's contract is up. They negotiated a contract for 2 (or has it been 3?) years and now they have to re-negotiate the contract. Then the record companies can use this to force the next contract re-negotiation to raise prices (kind of like IP "parity" - Australia grants 200 year copyrights so now we have to too stay even - except we tack on an extra 50 years and now Australia...). Also, iTMS has like 85% of the market, so the recording companies have to take them down a peg. They want competition amongst distributors, a typical divide and conquer strategy. If they were solely reliant on digital distribution, they would be fucked, because Apple could basically dictate terms to them. They want a bunch of digital distributors with small percentages of the market so that if any of them get out of line, they can destroy them with out affecting their bottom line. It is very similar to Microsoft, in that they encourage fierce competition amongst hardware manufacturers, leading to lower prices and razor-thin margins, while maintaining a monopoly on the software needed for that hardware, ensuring they can enforce high prices and even higher margins.
I really hope Apple holds out, because otherwise we are going to be screwed, ceding all market power to the RIAA.
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
I think that should be "at least the law WILL deal with drug dealers."
So far, no one really seems to care about what the music industry is doing. Because if someone says something to them, they will just scream "PIRACY! PIRACY!" and the government turns the other way... "oh, carry on then."
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
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?
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.