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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!
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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.
IMO, we need someone to challenge Apple, too. Magnatune is pretty cool, but not quite competing with iTunes (Amarok + Magnatune, admittedly, is pretty neat though).
"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?
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
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
One point the article made (not that anyone read it) is that the labels were scared Apple would drop them.
Do you even lift?
These aren't the 'roids you're looking for.
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.
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.
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.
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.
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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...