Slashdot Mirror
Behind the Scenes In Apple Vs. the Record Labels
je ne sais quoi writes "The New York Times recently posted an article describing what really happened between Apple and the Record labels that culminated with the January 6th Macworld Keynote by Apple Senior VP Phil Schiller." Essentially they discuss a bit of a swap: Apple allowed variable pricing for songs and the industry allowed DRM free music. And apparently the iTunes homepage is a huge hit making device. Big shock.
Can we get a special section for iMusic news? Apple did what the music industry should have done and failed to do. Perhaps Apple should start the iMusic label and start signing artists, sort of an effort to put the music industry into perspective with it's current situation. It would be an eye opener for the RIAA.
Support NYCountryLawyer RIAA vs People
I'm really having a hard time gleaning any actual content from this article. Other than the first paragraph, where Apple is allowing Sony to jack up prices so long as there's no DRM... it really doesn't say much.
There's sensationalist crap about how the companies are "uneasy" with this truce and each one wants the other gone... I'm not really sure why.
The one interesting idea brought to the table was the idea of a "subscription fee" for music... pay a monthly fee and listen to _whatever_ you want. I'm not sure how I feel about that. On the one hand, I kinda like it as a compromise between DRM and piracy, but on the other hand, it doesn't seem like that would _stop_ piracy at all.
No, they gave up DRM, and copy protection is sort of related to that. They did not give up anything even remotely related to copyright protection, unless I somehow missed the part where Apple talked RIAA into releasing works into the public domain.
That's just plain wrong. Bad reporter!
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
IMO, it's about time someone gave these bastards a taste of their own medicine.
Kiteboarding Gear Mention slashdot and get 10% off!
Really, the ip0wning that the record guys are now receiving is their own fault(and I, for one, am experiencing everybody's favorite German emotion). They wanted DRM to protect their precious content. DRM is, by nature, inimical to interoperability. Thus, the record labels, by forcing people who wanted to buy music online to choose lock-in to one DRM camp or another, created a situation where the winning DRM "ecosystem" would be extremely valuable, and powerful, and all the others would be near worthless. Shockingly enough, playsforsureexceptonzune wasn't the winner.
If the online music business were a bunch of generic outfits selling MP3s(or generic AAC) then the relationship between the labels and the retailers would be a lot more like the brick and mortar one. By pushing DRM, the labels created something they can't really seem to handle. Had they just stopped clinging to the nonsense dream of magic interoperable DRM, they might well have been able to avoid this. Idiots.
According to TFA the music industry are now depended on Apples iTunes Store due to the major revenue. How come none of the labels have launched a similair service (it's not really the most original idea of all times)? I doubt they're lacking funds. If the itch is too annoying, why are they entangling themselves into more dependency? I it's not like it gets easier to detach from iTunes Store with time. I don't know, but to me it seems that everybody that touches Apple becomes stuck to it in some way or the other. Sure it's great for business, if your name is Apple. For everyone else: please bend over and cough.
I am the lawn!
"And apparently the iTunes homepage is a huge hit making device. "
This is part of what an iphone "killer" has to overcome (I'm looking at you Palm).
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
Simple--they have tried to do so in the past; between their propensity towards suing everyone they work with and their addiction to (failing) DRM no one wants anything to do with them any more.
Sure there are reasons to dislike Apple but their stance on DRM is refreshing and has not changed significantly over time, making their iTunes Music Store less of a risk than any 'hear today, gone tomororw' outfit the RIAA can throw up overnight. Moreover their partner in rhymes (Microsoft) got greedy and did the rest of us a favor by underlining just how risky it is to buy music that 'Plays for Sure' and eliminated any other major players from moving in.
Not to say that the iTunes Music Store is the only (no DRM) mp3 store around, I know they aren't and there are certainly a couple of good ones well worth doing business with--but who has heard of them besides us geeks and Linux users?
--bornagainpenguin
Have a Virgin Mobile USA smartphone? Give VMRoms.com a try!
This is part of what an iphone "killer" has to overcome (I'm looking at you Palm).
But with iTunes songs being DRM free now, Palm doesn't have to build their own iTunes - they just have to be able to feed songs into their own device from the users iTunes library, and support AAC (an open audio format).
They could even list all songs and ones that are still locked down could take you to the Apple iTunes Plus page to unlock (which you can happily do on a song by song basis now).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
How come none of the labels have launched a similair service (it's not really the most original idea of all times)?
As others have noted they have tried.
The reason they will never succeed, is because they are not software companies and never will be - nor should they be. They exist to edit artists down to ones that will probably be popular, and market them.
Even when they partner with companies that are software companies, the fact they are the ones driving requirements means the results will always suck, and consumers will shun them compared to better ways to get music (like iTunes currently).
Something may eventually topple iTunes, but it will not come from the music industry.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Apple won't start a music label for the following reasons:
Its not their core business - (appears to be a logical step but itunes faciliatates sales of ipods and other apple gear). Apple might be able to hire the skills but it doesn't match their business strategy
It would be business suicide. Once apple start competing with labels, they'll pull their libraries and Apple will lose their entire competitive edge in the market being able to offer only new stuff
It would in the long run make them uncool. Apple would turn into "the man" as other labels scramble emulate them. Eventually apple will be just another label.
you have to remember - apple is in the business of making money NOT doing whats necessarily benevolent for the consumer. Bad to say it that way but its reality. Apple ultimately answers to shareholders and shareholders don't care about RIAA conflicts if it doesn't impact their shareprice.
Read what I mean, not what I wrote.
The gripe that they effectively created MTV, they gripe that the revived Apple.
If I was a large shareholder, I'd fire the lot of these guys. Because either one of the two is true:
1) They're lying as an excuse for their failures
2) They have all this business opportunities that create entire new industries, but they can't get it done themselves, effectively giving up 10's of Billions of dollars.
I wouldn't want those guys working for me, that's for sure.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
DRM creates a natural grouping of power, and we are all lucky that Apple chose to use the power of distribution that eventually accumulated to them due to the use of Apple DRM, to try and break DRM.
The article makes an excellent point at the end:
"Mr. Card of Forrester, however, has a different take. "If it weren't for Apple, God knows how bad the music industry would be," he said."
Even though the music industry had to be dragged kicking and streaming, Apple saved them - the 1.5 billion in revenue Apple generated for the music industry last year would probably mostly have been simply gone, replaced by downloading for the most part rather than album sales.
Now if only they could do the same for video... I don't think Apple has the same leverage there though, as is evidenced by wacky policies around TV and movies in the iTunes store (like season passes for some TV shows costing more than buying each episode individually). I'm not even sure they have the same drive to try and get rid of the DRM they did with music. I don't know if that industry can be saved as easily.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Empty-Vee?? What's that?
I only get references to something called music television when I google it; but clicking on it on the television only gets me some stupid Reality TV show or some documentary about the 80's...
--bornagainpenuin
Have a Virgin Mobile USA smartphone? Give VMRoms.com a try!
You mean the pillaging of artists currently practiced by the labels? iTunes has profoundly revolutionized the music world, and is mostly fair to consumers.
What about a label that revolutionizes management and actually works unobtrusively for the artists??
NewBand: "Why should we sign with you and get 3 cents on the dollar before "expenses" when iMusic gives us 62 cents per buck *after* legit expenses?"
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Why not "Old, successfulBand"? They don't need the one thing the label can give them: publicity?
The real "Libtards" are the Libertarians!
Actually, I see the opposite being true. Previously it was just you against the record labels. The record labels always won. They could charge $15 for a CD that cost them $1 to print and $5 to create, market, and manage. Then Apple came along. Apple is not in the music business, they're in the *iPod* business which relies on the music business. So they bundle a cheap music store with their iPods and it becomes the #1 way everyone in the US gets all their music. Now you have Apple negotiating on your behalf for lower prices, and it's Apple vs. the record labels-- a much more even match. So prices come down.
If Apple's dominance in music distribution is ever broken, expect prices to double or triple as you'll have no one with any power negotiating on your behalf anymore.
E pluribus unum
Magnatune already does this, but they operate somewhat in their own bubble. They don't play on the same field as the big hitters, I assume because of money. The big labels know how to promote, I'll give them that much. If Magnatune could promote on a level playing field with everyone else, the tides might change.
I see the glass as full with a FoS of 2.
That would be funny, because right now there is no reason not to push the quality through the roof. But because I dabble with dinosaur mp3 players as a hobby, you can fit a lot more music at 80kbs-rate (spelling off) in 256 megs than 192 kbs-rate.
That might interact with the world of bandwidth caps on the isp side too.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
And as Apple's influence in the music market grows, what is going to happen is that now we're going to have 2 layers of middlemen between us and the artists, as opposed to one... which is necessarily going to cause a reduction in service and an increase in prices, with no benefit for anyone other than the middlemen.
This is weird, I thought that retail and distribution were middlemen.
Since we'd go from 3 to 2 layers, any reduction/increase cannot be explained by your theory but must be because this is what the market will bear. So, our hope goes for independent labels to do better than the majors and push the market down. And since you don't have to buy shelf space, the odds are in our favor.
ID: the nose did not occur naturally, how would we wear glasses otherwise? (apologies to Voltaire)
That's because Apple record abused the intent of trademark, and Apple computer found it cheaper to settle.
This of course changed years later with the iPod, something that couldn't ahve been predicted when the Apple trademark abuse^H^H^H^H^H issue came up.
The Kruger Dunning explains most post on
Maybe, except that the minimal cost of digital distribution has started to allow bands to make their music available without the help of a major label. Both no-name and big famous bands are experimenting and starting to be successful doing it all on their own. While there will still be some space for larger labels to operate, their monopoly on the mass-production of music has been cracked by technology, and will continue to erode away.
If Apple loses leverage and the major labels try to jack up prices two or three times, Three basic groups of music consumers will emerge. One group will shrug their shoulders and just pay extra (but not as many as the labels would like). The second group will look to smaller/indie labels for cheaper music, and thanks to the internet they'll be able to find them with increasing ease. And the third group will go back to downloading off of whatever kazaa/limewire type software is popular at that time.
Especially with the economy cratering the way it is right now, raising prices is a really good way to get your customers to look elsewhere. The only reason the music companies could get away with it in the past is that recorded music was nowhere else to be found. Now it's digital and it's everywhere. Yay.
One time I threw a brick at a duck.
If you're talking about the music store, yes. If you're talking about the PC application, I'm going to have to turn my head to the side and shoot my green tea out my nose.
I don't want to know about your fetishes.
I've used music players on Windows and *nix, commercial and free, and all of them suck dirty swamp water through moldy sweat socks. iTunes sucks less than most. It could be that there's one or two that suck less than iTunes, but it's near the top of the smelly heap.
* Skinned user interfaces. No. Hell no. Any application that doesn't at least TRY to stick to the native user interface is right off my short list.
* WinAmp, derivitives, and clones. Ugh. Just... ugh.
* Windows Media Player, Realplayer, other applications based on the Windows HTML control. No thanks, I'd rather run through the hot ward at a plague hospital snogging the ebola patients.
All software sucks. Music player software sucks more than most. iTunes works, it's got some nice features, you can rip the Quicktime out of the OS. In this market, I count that as a win. Maybe my standards are low, but I've earned those low standards in the trenches.
Why couldnt Apple do it when Amazon and others could sell DRM free music?
Actually, doesnt Apple carry some DRM music in the store?
>the industry allowed DRM free music
Again, how did Amazon and company do it?
Apple is late again to the party and were supposed to hail them?
True, and some successful bands have done just that. But the equation is different for an established and popular band. They've got some leverage to negotiate with the record labels. The labels aren't taking as big of a risk backing a guy who's already had three platinum albums as they are with a guy nobody has heard of. The plus hopefully the ability and wisdom to hire a decent lawyer to protect them, and said famous band should walk away with a much better deal than your average no-name group could ever hope to get.
Sure, Aerosmith could print their own CD's and make deals with walmart and amazon and iTunes to carry their music. But if they can negotiate a good deal with Sony and let someone else do all that busywork instead, then maybe it's worth it for them.
One time I threw a brick at a duck.
Meh, they only realized that they couldn't deal with themselves after they repeatedly shot themselves in the foot trying to make the issue go away.
They have not realized yet - Apple has forced them to go DRM free on iTunes, but it was very much against their inclination...
If the music industry had truly come to the correct realization, would we have seen the recent Microsoft announcement, which doesn't even allow song transfer from one device to another if you upgrade?
If the music industry had truly realized the DRM was harming them more than anyone, would they not demand cell phone makers sell DRM free music to consumers too?
The fact that there is still so much DRM around that is not going anywhere, shows that Apple has forced them to do what is right (ad by "right" I don't just mean morally, but in the business sense) but the music companies still do not think it is the correct thing to do - they just have no choice because like any addict, they cannot live without the iTunes drip.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
With video, most people only want to watch it once, or maybe once and then a second time years later (with some exceptions). DRM that prevents it from playing on different devices over time or making it hard to move, does not create as significant of a usability problem or bother most users.
I very much agree with the first part, that most video watched will be only once. Thus the nature of DRM to make a purchase really more of a (in practice) unlimited rental, does not matter.
The second part, I'm not as sure of. Even though you only want to watch most things once, portability is still of value - because you may want to watch something on a laptop, or portable device (like an iPhone or other small media player). That's where the DRM can annoy compared to ripping a DVD with something like Handbrake.
So there I think Apple has a similar stranglehold on people buying video because if there's any inclination to watch something more portably, most people would have an iPod and thus buy from iTunes to be able to use that. Even so, I would guess that does not exert as much leverage with video producers because there are so many other distribution channels (including free ad-supported stuff like Hulu).
So I don't know where all that will go, but I guess in the end it does not matter to nearly as many people as music being opened up does.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I'm never going to pay a subscription fee to hear an unlimited amount. I would pay a subscription fee to download and own all I want in any given month.
You can lead a man with reason but you can't make him think.
"They could charge $15 for a CD that cost them $1 to print and $5 to create, market, and manage."
Aren't you forgetting the entire wholesale/retail aspect of that $15 price? The distributors? The music store that got half the money for stocking the shelves, BUYING the shelves, turning on the lights, hiring staff, paying the lease, and so on?
Saying in so many words that the labels got $9 in profit after $6 of expenses is just wrong.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
E Music is far better than Apple for price I cant believe people don't know this. DRM free and you own the music.
Now you have Apple negotiating on your behalf for lower prices ... If Apple's dominance in music distribution is ever broken, expect prices to double or triple as you'll have no one with any power negotiating on your behalf anymore.
As I read the article, it seems it was the labels that wanted "variable" pricing, and Apple that wanted to stick with $1/track.
I don;t think you are right about lower prices. All the other a la carte services have generally undercut Apple's pricing, usually $0.8 or so per track, except for the high quality lossless tracks that were often charged at over the $1 mark.
Furthermore, given Apple's historical aversion to low prices (its margins have generally been at least a generally reliable ~3x the industry average), I'd think that its premium prices for hardware would be reflected in its software licensing prices as well.
Da Blog
There's also the often ignored fact that CD prices have DECLINED since introduction. Many new release CDs can be had for $10-12, despite decades of inflation where the costs of many other things ($3 for a loaf of bread) have dramatically increased.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
The issue of whether something is or isn't infringement depends on whether it would be confusing, and cause consumers to assume that one product is produced by another company -- essentially free-riding on the other's reputation.
My understanding is that the Apple Records vs. Apple Computer suit never got to the point of determining whether that was the case. If the suit had gone forward, a judge would have needed to rule on it one way or the other. But before that happened they arrived at some sort of deal, in which Apple Computer agreed to stay out of the music business and Apple Records out of computers. That deal persisted until 1997, when Apple Computer basically bought Apple Records out and acquired sole ownership of the "Apple" marque.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
"Why not "Old, successfulBand"? They don't need the one thing the label can give them: publicity?"
I've worked with "Old, successfulBand" before and one hit doesn't mean anything. Or 20. It is all about the next hit.
I knew one guy that had multiplatinum albums dating to the 70s until the early 90s...decided to go it himself. For 15 years, he sold practically nothing. Yeah, the profits were actually decent considering all of this, but he couldn't sell out huge concert halls any more. For an artist, this is where the real money comes into play. Along with licensing, which isn't going to happen if his songs aren't getting heard by the public (an indie artist might get a song played with just critical buzz alone, but an established one won't...if it is only buzz, the tastemakers are going to pass it up for something unknown).
Lots more reasons, but that's all I got tonight...
Depends on the artist I guess. Just look at Nine Inch Nails, they're doing great now that they aren't on a label. Trent Reznor is trying all sorts of interesting things that are good for his music and good for the fans, and by all accounts is making boatloads of money off of it. That's not to say that your "multiplatinum albums dating to the 70s until the early 90s" friend wasn't right about the problems of operating without a lable when he was trying to do it, he may have simply tried it too early. Digital distribution and the internet may be what have made it possible for stuff like this to work for well known bands like NIN, (I have no illusions that for most unknown bands labels are still somewhat of a necessity, though not necessarily the major labels) so perhaps technology has changed the equation some.
There's also the often ignored fact that CD prices have DECLINED since introduction. Many new release CDs can be had for $10-12, despite decades of inflation where the costs of many other things ($3 for a loaf of bread) have dramatically increased.
CD prices have not decreased if you account for inflation. 26 1980-dollars is about 9.5 2007-dollars.
Inflation did not cause the price of bread to rise, by the way. Energy prices did.