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.

Comments

iMusic industry news

[zappepcs]

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.

Re:iMusic industry news

[DrLang21]

Apple opening it's own record label would put it at serious odds with the the other labels that it sells. A better solution would be for Jobs to start his own record label completely independent of Apple. The single song electronic sales business model has already been forced onto the music industry, so the only purpose of a new record label would be to explore the other flaws in the system, like constructed pop stars.

Re:Dependency and Apple

[DrLang21]

It takes a lot of time to develop an application as usable and stable as iTunes. So unless the labels formed a coalition to develop a strong competitor in top secret conditions, they would constantly be in fear of being removed from the iTunes store in the meanwhile. Not to mention that any competitor coming to the market right now would have to compete with a serious branding problem. Everyone knows iTunes and subconsciously accept it as the only option. Any new outlet would need to be able to offer something compelling that iTunes doesn't or better yet, can't.

Re:Middlemen layering

[samkass]

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.

Re:Palm doesn't have to overcome it at all

[UnknowingFool]

From what I understand, what Apple tried to do is secure the rights to distribute via cell phone data networks. Currently you can get your music onto the iPhone/iPod using your computer. What they got permission to do was allow iPhone users to get music onto their phone without having to connect to a computer. Having a deal here doesn't open them up to monopoly or anti-trust rulings as long as they didn't prevent other cell phone makers from doing the same thing.

My Verizon phone has long had the ability to get music from the network that but the music was tied to my phone and expensive. Now that iTunes is DRM free, nothing prevents me from playing those songs or Amazon's DRM free MP3s on my Verizon phone . . . except that Verizon has crippled my phone not to do so.