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Record Execs no longer happy with iTunes.

Discussion in 'Miscellaneous [BG]' started by Blackbird, Apr 19, 2005.

  1. Blackbird

    Blackbird Moderator Supporting Member

    Mar 18, 2000
    This came out on the 15th. Sorry if it's old to some.

    Source: CNet News.

    When Apple Computer CEO Steve Jobs walked into the suites of top record label executives in 2002, iTunes software in hand, he was welcomed as a trailblazer to a digital music future.

    Now, nearly two years after Apple's iTunes launch, record executives have become worried that they have inadvertently ceded too much power over their industry to this charismatic computer executive.

    Frustrated at what they see as Jobs' intransigence on song pricing and other issues, some record executives are now turning their hopes toward other partners, particularly mobile phone carriers eager to get into the business of selling music. They see this new focus as a way to broaden the digital music business, and lessen Apple's dominance over their market in the process.

    "The (wireless) carriers' economics are aligned with us much better than Apple is aligned with us," said one senior executive at a major record label, who asked to remain anonymous because of his company's ongoing relationship with Apple. "The mobile market is very important, as important to us as the PC."

    Jobs is given undeniable credit for jump-starting what is now a fast-growing digital music market, but some music executives complain that his company, with 70 percent of the digital download market, is setting the ground rules for their own business.

    While iTunes is designed to propel the sales of iPods--more than $1 billion worth in the last quarter alone--the labels complain that Apple's policies are insensitive to their goals and limit their ability to grow their digital business even faster.

    For example, Apple wants to sell all its songs for 99 cents each, a single price point that's easy for consumers to understand. But the record labels have pressed for the ability to vary prices to maximize their own sales. They want to sell older titles at a discount--like the $9.99 CDs available in most record stores--and charge more for popular songs to take advantage of market demand.

    Jobs also has refused to license Apple's antipiracy technology, called FairPlay, to rival MP3 player makers, and has blocked music formats from other companies, such as Microsoft, from the iPod. This makes iPods and the iTunes store incompatible with rival digital music devices and stores, fragmenting the market in a way the labels fear ultimately limits sales.

    Read whole story here.
  2. Who's surprised? Not me.
  3. Marlat


    Sep 17, 2002
    London UK
    Apple is to digital music what Microsoft is to everything else.
  4. Droog


    Aug 14, 2003
    Can the major music labels for once do something that does not make me despise it? Give me a break. The redord labels were all gung ho about itunes, Apple has not changed a thing about it in two years, which is amazing in of it self. Now they are realizing its leading the pack and want to start maximizing profits for shareholders. Piss on that.

    I think its great that Jefferson Airplane tunes cost just as much Audioslave. Leave it the hell alone I say. In my mind Jobbs has more than delivered for the labels and to consumers too, the $$$ don't lie.

    Greed, greed, greed!
  5. Wrong Robot

    Wrong Robot Guest

    Apr 8, 2002
    That's pretty silly "we want apple to charge more, they don't want to, so we'll get other people to charge more!"

    iTunes music store already has flexible album pricing, where sometimes a new pop album will be more than $9.99 or an old best of album might be under $9.99 So I don't really see what they are complaining about.

    $.99 a song is a sweet spot, People aren't going to want to pay anything more than that, and the margin is incredibly tight already.

    I don't necessarily agree with apple's tactics of boxing things into the iPod/iTunes, but since apple dominates the market so thoroughly, I don't see that changing any time soon. Perhaps if competition heats up, apple will start to expand the fairplay stuff. But even then it's unlikely. A big part of why apple computers offer remarkable ease-of-use, intuitiveness and overall good is because they design hardware and software to fit that hardware, so they maintain a level of quality over all their stuff, whereas, if apple licensed fairplay for widespread use, the overall quality(in terms of reliability, compatibility, and functionality) can suffer.

    That said, there haven't been any iPod killers yet, but I think that mobile phones will start to tip the tide. Even though those phones typically cost over $400, people get them for free or massively discounted due to service plans and stuff. But, I would take an mp3 player phone with 512 MB memory over an iPod shuffle any day.
  6. Broach_insound


    Jan 25, 2005
    New York
    Apple is better than Microsoft :cool: Macintosh computers are slowly becoming more and more popular
  7. Josh Ryan

    Josh Ryan - that dog won't hunt, Monsignor. Supporting Member

    Mar 24, 2001
    Anyway, it's greed all around. the record execs are doing what they have always done, trying to bleed a stone, Apple is doing what it has always done, protecting it's niche by hogging the ball. big deal. I'll eat my shorts if the mobile phone market is what saves the current version of the recording industry. As for starting another Apple vs. MS thread, enjoy this sanitized for Talkbass Granny.

    Attached Files:

  8. Christopher


    Apr 28, 2000
    New York, NY
    Record execs are idiots. iTunes is saving labels' asses.
  9. Josh Ryan

    Josh Ryan - that dog won't hunt, Monsignor. Supporting Member

    Mar 24, 2001
    -they always want more, and more etc. they really don't deserve saving.
  10. bassmonkeee

    bassmonkeee Supporting Member

    Sep 13, 2000
    Decatur, GA
    Funny--iTunes already does this. I got Elvis's 50 Greatest Hits for $17.99. That's 36 cents a tune. I think the key part of this statement is the "charge more for popular songs" part. Imagine that--record execs see that it can be done without them, and want more control... :rolleyes:

    I will say this about iTunes, though--After all of my gift certificates ran out, I don't see myself buying many tunes from iTunes, though. 99 cents is too much to pay for a song at 128kbps. When I want to buy music, I'll use www.emusic.com. I haven't had any problem importing the emusic mp3s into my iPod. And, of course, I still have about 800 of my own cds to rip as soon as I get a new 160 GB hard drive....
  11. I like iTunes generally, and I particularly like seeing record labels execs sweating and whining. It makes me laugh.

    But I don't like this format exclusivity crap. Aren't we past all this now, or shouldn't we be? How would we like it if we bought a Sony CD and could only play it on Sony CD players? Apple is being stupid and proprietary about this, and I predict that the future will not belong to them.
  12. I mean, no computer company has ever "hogged the ball" by making certain technology exclusive to their products and then release said products with a time delay for other platforms, if at all. It's big, bad and evil for Apple to even think that they can be market leaders in a field that they raised from pretty much nothing at all and for which they invented a practical way of doing business. How dare Apple to even think in such an obviously unethical and capitalist way.

  13. brianrost

    brianrost Gold Supporting Member

    Apr 26, 2000
    Boston, Taxachusetts
    Format exclusivity is a GOOD THING. The biggest problem I have with digital audio is all these incompatible formats...mp3, WMA, RA, etc. not to mention the post CD hard format mess (SACD, DVD-A, various surround formats).

    iTunes just works...the hardware works, the software works, zero hassles. So Apple should open it up so it can stop working seamlessly? *** for?

    I also really dug this paragraph:

    "Part of the mobile market's attraction comes in pricing. Consumers around the world have shown they will eagerly pay $2.50 or more for a ring tone, a mere snippet of a song that costs just 99 cents for the full version at iTunes. Labels see these consumers as receptive to variable prices for different songs."

    In other words, hey maybe we can jack up the prices. I didn't see anything about the labels wanting to LOWER prices!!!!
  14. I don't know if you and I mean the same thing by format exclusivity. You seem to be using it to mean having a single format. That's not what I mean at all. That wouldn't be an exclusive format--that would be a standard format *available to all in the field*--the opposite of what Apple is doing. The current music CD format--as opposed to the post-CD format--is not a mess at all. It's one format, and everybody uses it. This is a *good* thing.

    The problem I have with Apple is not that they have their own format. It's that other players can't be used with the site. I repeat: how would you like to have to buy a Sony CD player to play a Sony CD you bought? Not only is it kinda arrogant IMO, it's short-sighted and, I believe, ineffective in the long run. IMO, Apple right now is adding to the format mess, not solving it.

    OTOH, multiple formats are not a problem if the gear is built to accommodate all of them. I just bought a DVD writer for my computer for < $100 that does CD, CD-R, CD-RW, DVD, DVD-R, DVD+R, DVD-RW, DVD+RW, and probably something else I forgot. If multiple digital music formats are going to continue,as they probably will, then my $0.02 is that all players ought to be able to handle all formats, and any player should be allowed to be used with any site. The iPod is a beautiful piece of hardware, and iTunes is a nice piece of software. I just don't like Apple trying to make me use an iPod if I want to use iTunes. Seems to be an Apple mania--can't seem to unhook software from hardware.
  15. Diggler


    Mar 3, 2005
    Western PA
    A person may pay $2.50 for one or two ringtones. They're not buying a couple hundred ringtones, though, like they would with songs.
  16. See the Sony Betamax for your history lesson.

    VHS proves the viability of licensing.
  17. Josh Ryan

    Josh Ryan - that dog won't hunt, Monsignor. Supporting Member

    Mar 24, 2001
    format exclusivity is a good thing? Yes to protect your market. allowing an itunes formatted song to play on a Zen would not interfere with the operation of iTunes, your iPod or anything elese. that made no sense. Having your iPod play wma files will not "break' your iPod or iTunes. OTOH, I don't fault Apple for doing this, I think the iPod an iTunes really saved the company and I would have done the same.

    I agree with you about the pricing thing though. The main goal of the recording industry seems to be something along the lines of "let's see how many people we can get to bend over".
  18. DigMe


    Aug 10, 2002
    Waco, TX
    I assume your talking about how Sony allegedly refused to allow other companies to use the Betamax technology? From what I hear that was an urban legend and Sony did in fact offer to license beta to JVC in the mid seventies. However, JVC felt that their VHS technology was better and went with that. It ultimately won out in the consumer market because consumers liked the longer record times of VHS. I may be wrong but I think that was more the cause of VHS winning in the consumer market than anything involving licensing.

    brad cook
  19. Craigle

    Craigle "Careful with that joke, it's an antique!"

    Mar 10, 2004
    New Orleans, Louisiana
    ^^^ 100% true

  20. Man, busted on an Urban Legend...

    Reminds me of the time I heard about the escaped convicted murderer in the insane asylum...

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