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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.
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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.
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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.
"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"
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.
I see the glass as full with a FoS of 2.
That's because the music industry demanded DRM. And guess what, they did try to open their own music store. But, like all music stores, they failed for one simple reason - there was no way people would buy music if they couldn't load it on their device. And the device that most people had? iPods. Whose DRM was proprietary to Apple. Which meant they could take a piece out of the non-iPods out there (along with the millions other stores), but that's it.
The last gasp at trying to break into the iPod (and to get Apple to bend over to the music labels, rather than the labels bending over to Apple) was Amazon. Alas, while Amazon is popular (and #2), it still didn't hold a candle to iTunes' popularity. And Jobs knows that since the music industry was already wavering on DRM, now would be the time to also make iTunes DRM-free (Amazon is DRM-free, so iTunes should be able to demand same).
This is an industry where a very limited customer base was considered a Good Thing(tm). Yes, Jobs went to the music labels, and promoted the limited marketshare of Mac users as a benefit in the experiment of selling music online.
How come none of the labels have launched a similair service (it's not really the most original idea of all times)?
You mean like the Sony Music Store?
What, you never heard of it? Perhaps that's because Sony's been systematically alienating their customers since the Walkman/Discman era?
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
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They've tried and failed with Napster, PlaysForSure, etc. The problem was that they didn't have the technical prowess to set up a seamless integrated operation. They don't have the facilities to understand websites, hardware etc. It took Apple who was willing to do it all before online music was a success.
Also the demands of DRM and tight control doomed most of the implementations because they want the consumer to pay for a copy for every device or rent music. They even fought against the idea MP3 players with their lawsuit against Rio. The subscriptions may generate lot of money for them, not that it's good for the consumer or what they wanted. Also they wanted subsidies from every device maker.
Are you kidding? With all music now DRM free from Apple, I can completely uncouple from iTunes. I might have 10 songs I need to upgrade to DRM free. Heck, I can use Amazon now. The reason I still use iTunes is that it's freakin' convenient.
Well, there's spam egg sausage and spam, that's not got much spam in it.
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
There's two big reasons why.
First off, creating a good online music store is hard. Lots of people have tried already, and very few have been successful. Just because the labels have access to lots of songs doesn't mean that they know how to create an online storefront and run the backend system that it would require. Sure, they can try to hire someone else to do it, but there aren't too many people out there with an established track record for this sort of thing for them to pick from.
Second, Apple's got the iPod, it's got the cool factor, and the labels have none of that. Nobody cares which label a song comes from. The star power comes from the artist, not from the distributor. A store run by the labels would get little attention, and would have to prove itself useful in every way from the very beginning, because nobody would give them the benefit of the doubt on anything.
One time I threw a brick at a duck.
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.
...except the labels don't need to. They can leave the
management of MP3 devices to someone else. All they need
now or ever needed really was an effective ecommerce site.
They don't need to "control the experience" like Apple.
Even Apple doesn't even really need it.
A Pirate and a Puritan look the same on a balance sheet.
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
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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?"
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The experience (convenience) is what Apple sells most. I'm not saying that they need to manage mp3 devices, but they will need a model that offers something starkly compelling that Apple doesn't. Amazon offered DRM free music when Apple didn't, but it was more expensive and somewhat clunky. Now the prices are comparable, but Amazon is still clunky. So why use Amazon when iTunes is more convenient? A 10 cent price difference on Amazon will not lure people away from convenience. At this point, any serious competitor to iTunes will need to interface with iTunes at least in some minimal way to prevent people from turning away because of being inconvenienced. That could be something as simple as automatically adding songs to a user's iTunes playlist when you download them.
I see the glass as full with a FoS of 2.
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
Sell wavs or mp3s (and flacs and vorbis for the nerds) through an old fashioned traditional shopping-cart store, and you have an instant market that doesn't cost you anything in R&D. Any random webmonkey can have something for you with a single day's labor.
Amazon already did this, and they are nowhere near being a serious competitor to the iTunes music store despite being the #2 source for purchasing electronic music. Several others have pointed this out, but I'll reiterate it here. iTunes doesn't just sell music. Their business is selling a convenient service. You buy music, it's automatically downloaded to your playlist, and you can add it to your iPod (the market dominating mp3 player) all in one program with a fairly intuitive user interface.
I see the glass as full with a FoS of 2.
And this, friends, is why Apple's the player to beat and everyone else can't figure out why.
Yes, if you wanted to do it the clunky way of navigate to website / browse / shopping-cart / checkout / download / copy to player / copy to portable - that can be done without much work.
However, for the rest of the people who *don't want to* or *can't* do that, Apple's packaged it up nicely. You don't go to your browser to buy music - you go to your music player. You don't manage files on your portable through your computer, you manage it through your music player. You can sync your playlists, drag-and-drop music from one playlist to another, all within iTunes. See a theme here?
So good luck with that music website. There are thousands more like it, all with as little impact as yours would have. But Apple's still going to beat you because they know what people want, and you don't.
It takes a lot of time to develop an application as usable and stable as iTunes.
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. At least on a Windows box, my experience with iTunes has been forcefully installing Quicktime and hogging system resources like a bloated bitch.
I like to think of online DRM as something akin to a college -- you pay for lessons until you learn something.
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.
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There's a difference between fit and polish. Anyone could write the application. MS with it's billions of dollars is already on revision 3 of the Zune software. It's almost the same functionality and stability as iTunes. Many others have tried. And failed.
Here's what you didn't understand: You need permission from the RIAA to sell songs. They are never going to grant you permission to use non-DRM'ed music. They only gave permission to Amazon to fight Apple and only grudgingly to Apple because they need Apple.
Well, there's spam egg sausage and spam, that's not got much spam in it.
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.
Or a similarly-featured open source program that is dedicated to interfacing to many different music sales sites could show up on the scene...
www.getsongbird.com
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.
Apple isn't that unreasonable about outside services working on iTunes and iPods. At a minimum I know that Audible.com has a tie in to Apple's i* DRM, you can activate iTunes and iPods to play their books. Surely the music industry could have worked something similar out (especially early on, before iTunes itself became a Juggernaut.)
I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
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.
Yeah, I run iTunes to sync my iPod and to manage the tags, then I close it as soon as possible. Winamp has been able to play music in the background for years without skipping, if iTunes doesn't have focus the music jumps all over the place in ways I haven't seen since my first Pentium.
My point is that it's not as easy as some people think. "Hey, all it takes is a little code and I can have a music webstore." If it was that easy, iTunes wouldn't be as popular as it is today. Unfortunately people will also discount the hard work and polish that Apple has put into iTunes simply as not the reason they are #1. They rather believe it was lock-in.
They also don't see the reality of the situation that the record companies control the music and will not likely agree to allow anyone sell DRM free music. They have only reluctantly allowed Amazon and Apple to do so.
Well, there's spam egg sausage and spam, that's not got much spam in it.
The Labels used looser terms with Amazon in an effort to rob Apple of some marketing muscle and negotiating "leverage" and it failed, on both counts.
It is worth Apple's time to do so, as it increases sales and profitability of their actual higher priority endeavor, selling iPods. This has caused them to set a price point to maximize iPod profits, rather than music profits.
But now anyone else getting into online music sales has to match or beat that price point. Which is basically not very profitable because the labels scoop out nearly all the profit.
So the only entities in the market which will probably be willing to expend the resources to make a service as compelling as Apple's, are other entities with similarly tied profit avenues to bolster the online store, i.e. MS and the Zune. Or the labels themselves, since they would then keep the profit. Or Amazon.
Unfortunately, MS's success was poor since they launched before DRM fell out of fashion, and the labels have absolutely no conception whatsoever of what it means to design and build a business based on serving a consumer's needs and desires. i.e. making an online music sales outlet that is convenient, easy to use, offers good terms, etc.
Amazon has taken a shot, and may eventually gain some momentum. If the labels would actually throw some real support behind them, they might eventually dethrone iTunes. But of course, then the labels would do something stupid like immediately raise prices and things would swing back the other way.
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.
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"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...
The Labels used looser terms with Amazon in an effort to rob Apple of some marketing muscle and negotiating "leverage" and it failed, on both counts.
And either way, it was at least partially (if not completely) due to Apple's success that the labels ran to Amazon with the "no DRM" deal.
"No, no, no. Don't tug on that. You never know what it might be attached to."
No. Variable pricing at launch wouldn't have made a difference to the labels, the DRM would still have been required. They came later to the party, when it was obvious even to the tree stumps that DRM fails.
Apple showed with iTunes showed you could make money selling songs online, you didn't need models that constantly resubscribe to your account to keep listening. It worked for Apple, it worked for the recording industry, and it worked for most people listening to digital music.
eMusic showed you could sell DRM free music - but they couldn't get the library.
Subscriptions came and went. Some actually work reasonably well, now, as streaming technology has caught up - and the Zune "subscribe a bunch, keep some" looks good to me. Pity that they can't seem to figure out how to get the offering outside of the U.S., though.
For big industry, Apple was the bellwether and they became the laggard while they renegotiated the terms. Maybe it took longer than it should have, I wouldn't know. But without iTunes or a service by anyone else as egalitarian and as successful, Amazon would not have had the opportunity to make their offering. It didn't have to be Apple in the first place, but they showed up at exactly the right time, with the right combination of product and service, while the world was screaming "OMG NAPSTER".
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.