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Vivendi Calls iTunes Contract Terms "Indecent"
Bemopolis writes "Brace yourselves for a shocking revelation: The CEO of Vivendi, parent company of UMG, is not happy with the current deal with the iTunes Store. 'The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.' The usual argument about older music priced at the same rate as new music is trotted out. No doubt UMG would prefer to make the former cheaper, while maintaining the current pricing for the latter. At least he had the decency not to claim that they were trying to defend their artists against predatory iTunes pricing. Or maybe he just misplaced the index card with that boilerplate on it."
(Where former = older music, latter = new music)
No doubt UMG would prefer to keep the current price for the former, while increasing the price for the latter.
There, fixed that sentence for you.
But Bemopolis clearly didn't misplace his index card with the Slashbot boilerplate for attacking anyone in the music industry for anything that they ever say or do.
I'm not quite sure what the story is here though. The CEO of a company wants his company to make more money? What a shocker.
If Vivendi doesn't like the terms of the contract, no one is forcing them to renew. I don't see what this guy thinks he will accomplish by whining to the press.
Silly question, but if the contract terms are unfair to UMG, then why the hell did they agree to them ?
'The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.'
Substitute "producers" for Apple and "artists" (musicians) for "producers".
The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.
:)
I agree. Music PRODUCERS (this is, the artists, and not the greedy intermediaries) should get more share
Strange curiosity: Today's captcha is "authors"
I'm split on this one:
(1) If you think of it in terms of traditional retail, Apple is applying a 41% (.29 retail/.70 wholesale) markup. That sounds like a hefty markup at first, until you figure in Apple's cost of storage and delivery. While there is no "storage" and "delivery" in the traditional brick and mortar store sense, there is still server storage and bandwidth costs. I wonder what Apple's true costs (costs to music producers and IT costs to run iTMS) are on a per-track basis. Know that, and you can get a better grasp on the actual profit margin.
(2) If the deal is so bad for the producers, why did they go in on the deal in the first place?
The second point is more rhetorical, but the first one I think bears further study before deciding if the markup is excessive. Of course, getting Apple's per-track expenses will be damn near impossible so we'll have to settle for speculation and conjecture.
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
iTunes is pretty decent. Yea people can complain about the media not working on the iPod, but I have an iPod (whether or not you think its the best or worst). But when it comes down to pricing, $.99 for a song isn't half bad. Some people may argue for lower prices, but when it comes down to it, its cheaper than some candy bars and honestly, I get more enjoyment from a song than a candy bar. Sometimes they price new albums somewhat high, especially if they don't have a lot of tracks. It's always nice to see like a 16 track album going for $9.99 (price of 10 & 1/11 songs). (Now, if only eBook stores would do similar pricing, that'd be awesome.) Digital media SHOULD be a HELL of a lot more inexpensive than the physical media. iTunes does the distribution, storage, and virtually everything else involved with selling those songs. The record labels AREN'T DOING ANYTHING anymore. They don't have a right to the lion's share of the profit. Beyond that, they sell the music licenses to Apple, so Apple should be able to charge whatever they want. If Apple wants to charge more, its their right (though it'd be a bad move) and it's also their right to keep the rest of the profit. Now, chances are, the profits are probably in percentages and not flat dollar values and that's probably what is pissing the record labels off... Apple is selling them cheaply, so they're not making as much money. Apple isn't really making that much money off of iTunes either, so the labels shouldn't complain.
I can tell you what it is...
-Q&A: Jobs on iPod's Cultural Impact
The most interesting jobs to me, are ones where people have nothing better to do than "add value" to a product that already works. Typically, they end up screwing up a good thing.
Let's say that all the music companies do leave iTunes, what then?
1. Multiple services, which would be as annoying to consumers as having to go to different stores to buy different label's music. In reality the majority of consumers would probably rather to pay a little more and go to the "Music store" that carries all music as opposed to the "Vivendi store", "Universal store".
2. They unite and create a new iTunes, without Apple, under a different name. Then, as a side effect, they will also create a new Steve Jobs, who'll probably favor one of them over the others, as opposed to favoring the iPod (and total sales). This establishment will slip away even easier than iTunes.
In either event, consumer cynicism goes through the roof. And piracy will be the largest benefactor. I bet you could figure out more accurate scenarios (I only spent about 5 minutes of thought on this), but I can't imagine something better coming to pass when you are talking about so many assertive people working together without an obvious "boss".
I'd love to see how much of that 70% makes its way to the artists. Perhaps Vivendi misunderstood where the "indecent" portion of the financial split exists...
I don't disagree with the premise that older music could or should be priced differently from newer music. One would expect that with older music the costs of production and distribution have been largely recouped. Of course, to me that means that older songs should be priced from 25 cents to 75 cents and new music remain at the one dollar level.
I doubt UMG/Vivendi shares my pricing philosophy, however. Differential pricing to them is just a lever they want to use to rationalize higher prices.
So UMG gets the fat side of a 70/30 split, and all they have to do is sit on their asses and cash the checks -- and they don't think this is good enough!
And why don't I see them running their own music stores? Because they don't know how to do it profitably. All they know how to do is whine, complain, and demand more money for things they are incapable of ever accomplishing on their own. If there was ever a reason for Big Music to crash and burn, this is it!
Music existed before the music companies, and it will exist after they're gone. With the Internet, artists -- especially the vast hoard of unsigned artists -- don't need Big Music to get their music out. For every big name you've heard of that was signed by the record companies, a thousand others were passed over, and it wasn't because they weren't good enough too. If you want fairness and a level playing field for music, that's what's happening now, and Big Music is terrified. As for those precious recording contracts, you'll have a better chance of hitting it big buying lottery tickets!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
"Ok, we'll do a contract based on the contracts you force upon the artist. You'll get 5%, except we're going to use magic bookkeeping to guarantee that you will always owe us money, no matter how well the music sells. That's right, this time you are the bitch."
Alternately, tell them they get an amount exactly equal to what the artists receive, with auditing of the music industry books to verify the money is actually paid. Hell, offer them twice the amount the artist gets. They still won't go for it because they wouldn't want their books audited.
-- Will program for bandwidth
So why not release the music in iTunes Plus? More money per song, and the customer gets a better product.
:)
OH WAIT! NO! That would make too much SENSE! Nevermind. I'll shut up now.
One could argue that racism is about self-interest and survival.
Give me Classic Slashdot or give me death!
Do you really want that to happen? The main problem with music companies now is that they own all of the distribution channels. As brick and mortar record stores decrease in importance, do you really want yet another monopoly waiting to take over? Granted, they would be all about the brushed aluminum and everything will be shiny and chromed... but still :P