[mac-at-kearsarge]

Gasp! Shock! Awe! The record companies want more money (who would have thought that was coming huh?)

But our hero Steve, stepped in and and (My impression from this article) virtually bitched-slaped them. http://news.yahoo.com/s/ap/20050920/...apple_itunes_5

[iMOTOR]

jobs has balls®

[Big Mac]

This is an interesting negotiating tactic. I hope SJ knows what he's doing. He's resisting the will of a powerful consortium, with constituent corporations that have their own online music services and would prefer to sell them instead of iTunes. Of course, AAPL's setting records once again on the news, so it looks like the Street approves.

[DarwinX]

I agree Big Mac that it seems like a bit of a gamble, but this is Steve Jobs after all and I wouldn't expect anything less. Stick it to 'em Steve!

[Randman]

Steve has the position of power in this negotiation but never underestimate the greed and stupidity of the record companies.

[Eriamjh]

With 80% of online music sales, Jobs is the ONLY one who can tell the record companies that he is not raising prices. Jobs is right. Raise them any higher and piracy will increase much more.

Notice there was no mention of pressure to go to subscriptions?

[Big Mac]

Originally Posted by Eriamjh

With 80% of online music sales, Jobs is the ONLY one who can tell the record companies that he is not raising prices. Jobs is right. Raise them any higher and piracy will increase much more.

Notice there was no mention of pressure to go to subscriptions?

82% of the market provides a lot of clout, but let's not fool ourselves - if the labels pull out for whatever reason, iTunes is dead with a capital D. It must really bother SJ to have to treat the execs with magnanimity. Steve isn't the type of guy to genuflect, but his personality could sour the deal. Eriamjh, I don't think they would try to cram subscriptions down Apple's throat because they know iTunes is successful because of its pricing model.

[Hawkeye_a]

I dont expect anything less of SJ. But man he's got balls. And he laid it out quite simply..... the labels bear no distribution costs, and are making more money through this channel on individual sales than selling through the conventional channels.

Theyre greedy. But Apple and SJ need to play this out rater carefully. If the labels start supporting the other online distributors, that could have bad reprocussions for Apple. But having said that Apple pretty much owns that channel. iTunes->iPod.

Since this topic has come up....are there any other online muslic stores that are not subscription based and not based on WMF ?

Cheers

[Millennium]

Originally Posted by Hawkeye_a

Since this topic has come up....are there any other online muslic stores that are not subscription based and not based on WMF ?

Doesn't Real have an AAC-based store? I don't know if it's rent... I mean subscription... or not, but it's a thought.

In any case, Steve has definitely put his Big Brass Ones (tm) on display this time. I see the theory behind it: if the music stores back out now, they'll only validate his claim that they're being greedy. However, this stands a chance of backfiring very nastily.

[dreilly1]

Here's something from the Reuters article:
http://yahoo.reuters.com/financeQuot...0632868_newsml

Sony BMG CEO Andrew Lack said at a Reuters gathering earlier this year that Apple is benefiting from two revenue streams, sales of both the iPod devices and song downloads, while the music industry has only one.

"I'm not making any money on this," he said. "I've got one revenue stream that a proctologist would have a hard time analyzing. It's not pretty."

I think I agree with this Sony guy. Apple benefits from two revenue streams. I only have one revenue stream, and it's not nearly as big. Clearly, Apple needs to give me some of their money!

[lavar78]

Originally Posted by dreilly1

Here's something from the Reuters article:
http://yahoo.reuters.com/financeQuot...0632868_newsml



I think I agree with this Sony guy. Apple benefits from two revenue streams. I only have one revenue stream, and it's not nearly as big. Clearly, Apple needs to give me some of their money!

This argument he makes is ridiculous in a number of ways. First of all, he implies that the iTMS is responsible for iPod sales when the reverse seems much more likely. Also, the record labels make more per song than Apple does—and that's before taking out all of Apple's expenses (marketing, bandwidth, etc.).

[PookJP]

Steve's clearly right on this, so that's all I'll say on that subject.

But it needs to be mentioned the RIAA is spectacularly stupid. The one growth area they have right now and they're threatening to turn people away. Un-flipping-believable.

[Mastrap]

The vast majority of mainstream record companies are just unbelievable arseholes. Buy independent, people.

[PookJP]

Originally Posted by Mastrap

The vast majority of mainstream record companies are just unbelievable arseholes. Buy independent. people.

Well yeah, the music's better there too. I'm listening to a live performance from Clap Your Hands Say Yeah on KCRW... awesome.

[Salty]

Actually I bet the big 4 are more worried about Indies getting a better chance at being marketed than they have before. All I know is there are very few CDs I would buy not on iTunes.

[alphasubzero949]

Originally Posted by PookJP

But it needs to be mentioned the RIAA is spectacularly stupid. The one growth area they have right now and they're threatening to turn people away. Un-flipping-believable.

I believe that you're referring to the same conglomerate that sought the death of the blank cassette tape and managed to keep the record button off of CD players.

[PookJP]

Originally Posted by Salty

Actually I bet the big 4 are more worried about Indies getting a better chance at being marketed than they have before. All I know is there are very few CDs I would buy not on iTunes.

Hey, you. *cough*

[The Godfather]

I wonder if their greed can be used to maneuver them into disband. Maybe luring Sony, Virgin, WB, etc individually into signing better profit deals would break this cartel.

[Weyland-Yutani]

After thinking this over, then I have to say Steve Jobs just said what he should say. Apple doesn't make money off the iTMS in any significant quantity and makes its profit from the iPod.

Record companies may want more money but they are many. Would Sony stop granting Apple licence to sell music through iTMS if Universal didn't? Apple just wants to sell iPods, but I sometimes wonder if somewhere in a dark room in Cupertino there is a paper marked "plan B" that covers the situation if digital music sales eclipses the regular ones and Apple still has more than 80% marketshare.

I don't think digital sales will ever pass physical myself but this is about distribution control. So far Apple has been able to quiet down the record industry or perhaps this is just PR play.

cheers

W-Y

[typoon]

I hope this doesn't backfire on Apple. It would suck big time if it does. On that note. I'm glad Steve is sticking up for US the consumer. I've bought ALOT more music from iTMS since it's been out than I have in the past. If the greedy record labels raise prices and once again shoot themselves in foot AGAIN, I'm going back to other means of getting my music and buying more indie music.

GO STEVE!!!!!! Sometimes things he does makes us all scratch our heads and wonder why; but I think on this issue we are all behind him and Apple.

Once the labels have a good thing like LEGAL music downloads they have to try and do something stupid to shoot themselves in the foot again. GRRRRRRRR

[ambush]

pppppwn3d.

[Eriamjh]

It's an interesting conundrum.

The music industry probably wants its OWN download service, regardless of the model. Apple has 80% of the market, but won't license fairplay to anyone. Any new music service won't work on the iPod, thus limiting the appeal of any new service. The music industry could cut off Apple, but the iPod users wouldn't buy from them anyway because no WMA DRM will work on the iPod.

So it's work with Apple and Jobs or spend a ton of money setting up a new service that willl likely fail. I think this is why the iPod doesn't support WMA. If it did, iTMS might suffer a quick death once all other music services supported it.

[demograph68]

Bronfman Fires Back at Apple

“To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer,” said Mr. Bronfman. “Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past.”

Appropriate to consumers by jacking up prices? Yeah, that so unfair... I want to pay more! Damn you Apple!

[The Godfather]

If anything, most songs should cost less than 99 cents.

Does Apple have a contract signed by the RIAA, or is this an "at will" deal?

[alphasubzero949]

Originally Posted by demograph68

Bronfman Fires Back at Apple

“To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer,” said Mr. Bronfman. “Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past.”

Appropriate to consumers by jacking up prices? Yeah, that so unfair... I want to pay more! Damn you Apple!

So a Black Eyed Peas song should be worth $6 because of market demand?

[Mediaman_12]

Originally Posted by demograph68

Bronfman Fires Back at Apple

“To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer,” said Mr. Bronfman. “Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past.”

Appropriate to consumers by jacking up prices? Yeah, that so unfair... I want to pay more! Damn you Apple!

They just want complete control of the market, like they do in all the big 'High Street' record stores. The first week a track is available of an 'artist' they want to push, it may be less than .99 (to give it chart position). After that, when it's 'popular' (more people will have herd it, so they also want it) the price will rise to the most expensive, slowly dropping off as it popularity reduces.

The Record Co's will obviously realise that they can have lots more 'automated' control of the price of tracks on something like the iTMS, by linking the prices to the amount of downloads a track has, the more a track is downloaded (ie. bought) the more expensive it could get. No other method of delivery can offer this sort of price control.

If Apple allows them to control the prices, they will want more and more control over what is sold (i.e. more 'album exclusive' tracks). maybe even specials that could only be bought in combination with other tracks (i.e. Track 'a' is only available when you also buy track 'b'). Price control is a foot in the door to total control.

[Kevin]

Who do they think they are fooling? The artist wont say any of that extra money.

They always try to say "It's for the artist" No, no it's not. They try to pay the artist AS LITTLE as they can.

[FulcrumPilot]

I think Apple will listen if it can benefit from a price hike.

[typoon]

Originally Posted by FulcrumPilot

I think Apple will listen if it can benefit from a price hike.

Not sure I agree with that since if that did happen they would be killing the golden goose...I mean iPod. Oh wait they killed the gold iPod already. Well you know what I mean. The iPod is making Apple more money than it's had in a while. Why would they want to kill that to increase prices so they could appease the record industry and possibly make more themselves? Yes I know they are a business and they are out to make money but I think the iPod is making them more and is enhanced by the music store. Not the other way around.

I also doubt that the record industry is larger than Steve's RDF.

[Eriamjh]

The RIAA doesn't have a contract with Apple. Apple has contracts with the recording studios/record labels.

I'm guessing that The labels want a hit single to be $2.49 to $4.99, like if you bought a CD single. Greed certainly is the name of the game. I doubt they want Apple to get any more money above $0.99.

The problem is the $.99 price point is ideal. Most songs probably aren't worth $1. Old albums are not worth $9.99 to me. I wouldn't pay more than $10 for a new album that is as compressed as the iTunes tracks are. If I'm going to pay $15 for an album, I want it on CD.

[Randman]

The parts about not having two sources of income is a joke. I guess real-world sales don't count.

I hate the freaking record companies. Bad music, for the most part, and greedy, selfish bastards (and open about it too).

[Tesseract]

Originally Posted by Mediaman_12

After that, when it's 'popular' (more people will have herd it, so they also want it)

So true.

[production_coordinator]

Record companies... greedy? This is news to me



Introducing the RIAA and Music Industry Approved Music Pod
- 128MB Flash Card
- Happy Fun 2048 bit NSA approved Viper Z retina scan DRM
- MP3 to WMA DRM + 64kbps auto converter
- 1" x .5" black and white screen
- Smaller than a large book
- Holds 1000 songs*
- ONLY $799! (plus a $19.95 monthly subscription fee)
- $3.95 per song special until Oct. 1!!!


*20 second songs @ 32kbps

[alphasubzero949]

It gets better.

"Now, we need to understand that listening to music on your computer is an extra privilege. Normally people listen to music on their car or through their home stereos," said Kyyrä. "If you are a Linux or Mac user, you should consider purchasing a regular CD player." (Translation via tigert.com)

[Salty]

Funny thing about that... you know a regular CD will work in my car, stereo and PowerBook! Of course however some DRMed pieces of CRAP that try and limit my fair use rights under my country's law, won't play...

Honestly I think if the labels ever did drop iTunes. Apple should just say fine, and instead release the iTunes pirates cove . How bout it? P2P built into iTunes if the labels decided to get too annoying? Wonder how much piracy would sky rocket then! Not that I really like piracy... but it's hard to root for the RIAA!

[demograph68]

Originally Posted by alphasubzero949

It gets better.

And worse...
http://en.wikipedia.org/wiki/Trusted_computing

"While proponents claim trusted computing increases security, critics counter that not only will security not be helped, but trusted computing will facilitate mandatory digital rights management (DRM), harm privacy, and impose other restrictions on users."

[nredman]

Originally Posted by production_coordinator

Record companies... greedy? This is news to me



Introducing the RIAA and Music Industry Approved Music Pod
- 128MB Flash Card
- Happy Fun 2048 bit NSA approved Viper Z retina scan DRM
- MP3 to WMA DRM + 64kbps auto converter
- 1" x .5" black and white screen
- Smaller than a large book
- Holds 1000 songs*
- ONLY $799! (plus a $19.95 monthly subscription fee)
- $3.95 per song special until Oct. 1!!!


*20 second songs @ 32kbps

hahahahaha ohhh my side hurts now

[Sarc]

You just have to give it to the RIAA. They are undoubtedly the greediest and -by far- the dumbest industry.

One thing they don't realize is that very soon, as iTunes's user base continues to grow, they will become obsolete, since iTunes is in itself a proven distribution model. There's no limitation I can see for artists to make distribution deals directly with Apple and sell their albums directly through the iTMS. Add a marketting campaign to boost sales, Billboard charts already look at the iTMS, make some deal with the radio stations and that's it (sounds simple )

Hell, the artists might even like it since iTMS is a cheaper distribution model than regular CD's, so they get to see more money per track sold.

If the RIAA gets greedy enough to back off from the iTMS, fine, cut the middle man.

[Tesseract]

Originally Posted by Sarc

There's no limitation I can see for artists to make distribution deals directly with Apple and sell their albums directly through the iTMS.

Yes there is. The Beatles.

(Apple Corp. lawsuit)

[The Godfather]

Originally Posted by Tesseract

Yes there is. The Beatles.

(Apple Corp. lawsuit)

The options:
Pixar Music
Stevie-o Records

[Dork.]

How big is Apple Corp., really? Apple Computer's got a lot of cash on hand, could they buy them out?

[Sarc]

I think the suit was settled long ago, as it prescribed that Apple couldn't get into anything related to audio (or something along those lines), and they did when they added audio capabilities to the Mac.

That freaked out The Beatles and they reached some sort of agreement.

Is it something like that or am I still drunk ?

[Tesseract]

Originally Posted by Sarc

I think the suit was settled long ago, as it prescribed that Apple couldn't get into anything related to audio (or something along those lines), and they did when they added audio capabilities to the Mac.

That freaked out The Beatles and they reached some sort of agreement.

Is it something like that or am I still drunk ?

Yes.

Then Apple introduced the iTMS. The Beatles sued for the third time. I don't know if that has been settled yet.

[lavar78]

It hasn't been settled yet.

[Dork.]

Regardless, though, Sarc is still drunk.

Originally Posted by Tesseract

Yes.

Then Apple introduced the iTMS. The Beatles sued for the third time. I don't know if that has been settled yet.

I don't think it has. My money is on Apple for this one. The Beatle's corp is alleging Apple has become a record label, which it has not. Apple does not produce music, they only sell it.

[Tesseract]

Originally Posted by hayesk

I don't think it has. My money is on Apple for this one. The Beatle's corp is alleging Apple has become a record label, which it has not. Apple does not produce music, they only sell it.

If Apple does as Sarc suggested, then they will (essentially) be a record label. So they need to get the Apple Corp. thing cleared up before they start short-circuiting the labels.

[JoshuaZ]

Way to go steve. Tell them how it is.