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Universal Refuses To Renew On iTunes
Posted by
ScuttleMonkey
on Mon Jul 02, 2007 01:29 PM
from the don't-be-greedy dept.
from the don't-be-greedy dept.
UnknowingFool writes "It appears for the moment that Universal will not renew its long term contract with Apple for content on the iTunes store. While the details are not known about the exact nature of the dispute, many speculate that it has to do with Apple's stance on fixed pricing and Apple's refusal to license their DRM. The worse case scenario may include Universal pulling its entire catalog from iTunes. Both sides stand to lose out with 1/3 of of new releases coming from Universal and an estimated 15% of Universal's sales coming from digital downloads. Apple's market share is about 75% of digital downloads, and digital downloads are growing while CD sales are shrinking."
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News: New Head of EMI Says 'Embrace Digital Music or Die' 176 comments
no0b writes "Guy Hands is the new head of EMI, Britain's largest music publisher. Hands has come out publicly with a statement warning the industry against something music listeners have probably understood for some time. In the words of the Telegraph article, 'the industry will not survive if it continues to rely on CD sales alone.' More from the piece: 'With both new and established acts now capable of making money without the backing of a big company, McGee says record labels are being left out of the loop. He scoffs at their efforts to make up lost ground by developing into "multimedia entertainment companies that can manage bands and share in live income". But try they must. Revenues from record sales in Britain have dropped by more than £130m since 2004. The true cost to the industry could be far greater. TNS, the market researcher, looked at the spending habits of file-sharers between 2003 and 2005 and estimated a £1bn loss to the country in retail spend.'"
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Universal? (Score:3, Insightful)
Re:Universal? (Score:4, Interesting)
Personally, I think it's a bit early to be deciding who is doomed and who isn't. I think it's just as likely that both formats are doomed and there will be a "winner" only in the same way that laserdisc "won" the battle to be the next video medium after VHS. It was the format to use, there were just a low percentage of people interested in it.
Parent
Re: (Score:3, Informative)
In terms of standalone Blu-ray vs HD DVD player sales, HD DVD has a wide lead
Re: (Score:3, Insightful)
Secondly, who the hell buys porn on hard media anymore? Far far far more people download porn than get it any other way. The internet is, indeed, for porn.
The whole "Porn decides all format wars" line would be a lot more useful and relevant if we had a pool of results that was larger than, you know, one. Just because adoption followed porn once, doesn't mean it will ever do so again.
Re: (Score:3, Insightful)
Porn was the bulk of what drove the penny arcades, which in turn promoted the old silent movies (themselves started mostly as a vehicle for porn). Most of the visual entertainment media used throughout history either started out, or was heavily fininanced at the start by porn.
And they've decided today as well. You youself made the point without realizing it.
BOTH formats have lost, it's not about har
This is nothing more than (Score:5, Insightful)
My long-term prediction? More of the status quo. Both sides are winning, and there is no external stimulus that seems like it might upset the equilibrium that has developed. Apple doesn't want to lose a third of its collection, and Universal doesn't want to be tied to the misfits and rejects that compose the rest of the playing field.
Re:This is nothing more than (Score:4, Insightful)
It isn't enough to show Apple that they're serious, they want the rest of the industry to see that these steps can be taken without ruining their business. The ultimate goal is to restructure Apple's relationship with the entire music industry, not just with Universal.
If you see this as just an empty threat, then you aren't looking very far down the road.
Parent
Most likely negotiation tactics or... (Score:5, Insightful)
The other possibility is that Bill Gates, in utter desperation because the Zune is such a piece of crap, has offered to pay Universal for exclusive content for the Zune. I would seriously not put it past Bill G and Steve B to do something like this. It would be a really bad day for Apple if this did happen, because it would make the Zune more popular and the iPod less popular.
Of course, it could backfire heavily against both Microsoft and Universal if Zune sales don't grow significantly.
Re:Most likely negotiation tactics or... (Score:5, Insightful)
1) Oh, Universal's music is no longer available on iTunes. I'll buy this piece of crap Zune instead of the cool new iPod Femto
or
2) Oh, Universal's music is no longer available on iTunes. I'll have to <strike>pirate it like there's no tommorrow</strike> rip it from CD onto my iPod
Parent
Re: (Score:3, Interesting)
I think that's a reasonable bargaining chip to bring to the table - imagine the launch of ipod compatible, variable priced music on Amazon - launched with a live concert by universal artists such as U2 & Elton John....
Re:Most likely negotiation tactics or... (Score:4, Interesting)
or
2) Oh, Universal's music is no longer available on iTunes. I'll have to <strike>pirate it like there's no tommorrow</strike> rip it from CD onto my iPod
3) Oh, Universal's music is no longer available on iTunes. Hey, here's a cool song on iTunes, from some other label, I was thinking about getting this one too, I guess I'll just buy it instead. I don't really need that other song I wanted.
or
4) Universal conspires with two or three other big labels to also drop iTunes if their collective demands aren't met. Apple accuses the labels of forming a dangerous anti-consumer cartel, while the labels accuse Apple of being a dangerous anti-consumer monopoly, and because the labels have deeper pockets and are much more experienced at spreading ridiculous lies and deceit, few people hear Apple's side.
or, as another poster pointed out,
5) Universal sets up an iTMS competitor selling DRM-free tracks; they offer an introductory price of $0.89/track for the first three months, then jack it up to $1.99 per track for the tracks more than a handful of people want, while still offering crap nobody likes for $0.89/track (which is the price they'll advertise, of course). Throw billions of dollars at promoting it, and they'll convince some people to switch away from iTMS.
Parent
That'll sure help the A/R folks out... (Score:5, Insightful)
Universal A/R dude/dudette: "Yep, that's right."
Unsigned Band with break-out potential: "So any unit sales revenue we see from you will be from Wal-Mart and Best Buy sales, nothing else?"
Universal A/R dude/dudette: "Uh huh."
Unsigned Band with break-out potential: "Losers. Next!"
Re:That'll sure help the A/R folks out... (Score:5, Insightful)
You're assuming major labels are still out there trolling nightclubs for "unsigned bands with break-out potential".
More often what they're doing is hitting up their local malls and "recruiting" teenage girls (or in the case of boy bands, teenage boys) to actively "break" as the next pop star. These girls and guys had nothing going for them (except cheerleader looks) before, so why would they turn down the promise of riches just because the songs some producer wrote for them to lay their heavily processed vocals over won't be on iTunes? If they do, hey, there's plenty more at the mall they came from.
Parent
Re: (Score:3, Insightful)
To your point...the recruiting/packaging you ment
Re: (Score:3, Informative)
Re: (Score:3, Insightful)
Universal A/R dude/dudette: "Yep, that's right!"
Unsigned Band with break-out potential: "We'll loose all creative control and have next to no say in what we put out, but we're guaranteed to have at least one initial single because you own all media outlets like radio stations, television and most stores?"
Universal A/R dude/dudette: "Uh huh."
Unsigne
Minor correction(s) (Score:5, Insightful)
Universal A/R dude/dudette: "No, of course not. You will never see sales revenue because we will cook the books so that you never see a penny. But you are othewise correct - the unit sales revenue you will never see will only come from Wal-Mart and Best Buy."
Unsigned Band with break-out potential: "Where do we sign?"
Parent
Universal shoots itself in the foot. Film at 11. (Score:3, Insightful)
They think this is good for them HOW?
Re:Universal shoots itself in the foot. Film at 11 (Score:5, Insightful)
Parent
Load of Hooey (Score:5, Insightful)
And yet you sell all your CD's at $16.99 regardless of that fact now, don't you?
At the same time, Mr. Jobs has refused the industry's calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.
Another load of crap. iPods can play music from any other DRM-free music seller. This joker wants you to believe iPods only play iTMS music, which is a lie. And iPod owners would likely buy music from other sources if: 1) It didn't have yet another, incompatible, version of DRM; 2) It was priced right; 3) It was the music they wanted to hear; 4) It had a nice interface to easily purchase and load said music onto their iPod. The record companies themselves are the ones to blame here.
You know, It's the DRM, stupid!
I just don't see it working out for Universal (Score:4, Insightful)
If Apple and Universal cannot come to an agreement, Apple should bide its time, wait for them to weaken and strike. Buy out their catalog for a cool few billion dollars in cash and license it exclusively through the ITMS.
Re:Whoda thunk? (Score:5, Insightful)
Parent
short term vs long term (Score:5, Insightful)
As ATi learned, he has absolutely no problem with damaging his company in the short term if he thinks it will strengthen its position in the long term.
Though I don't have an opinion on whether Steve Jobs is doing this, I do prefer a company executive that looks, years down the road, to the future instead of to this or the next quarter. That's a shortsightedness it seems too many corporations have now.
FalconParent
OK - Here's a thing (Score:5, Funny)
But some music executives have been chafing at the flat rate
Well, Universal, here's *my* new flat rate for any of your artists.
$0.00
I call it the Interwebs Discount.
Happy now?
And there isn't a damn thing you can do about it.
Which DRM to use? (Score:5, Interesting)
The problem with music DRM, from the music distributor perspective, is that it's too closely tied to player vendors. There's the iPod and the Zume, and in both cases the player manufacturer takes a cut of the revenue. UMG, reasonably enough, wants to cut the player manufacturer out of the revenue stream.
Microsoft has orphaned "PlaysForSure", which, for a while, looked like an option. Or at least Microsoft tried. WalMart went with PlaysForSure, and they might insist that Microsoft keep supporting it.
What really matters is what WalMart does. If the music industry doesn't come up with a good solution, Bentonville may dictate one. Their site currently says The Apple iPod and Microsoft Zune digital media players do not currently support protected WMA-format files, and will not play Wal-Mart Music Downloads. Walmart.com has a large selection of WMA-/DRM-compatible digital music players available at great prices.
WalMart, remember, sells online music at $0.88/song, below Apple and Microsoft. And they're not going to raise their prices.
Re: (Score:3, Insightful)
If anything, music companies benefit revenue-wise from digital sales. Unlike physical medium like CDs, the distribution and manufacturing costs are minimal. And any infrastructure costs are borne by these
Record industry is dying (Score:3, Insightful)
Middlemen (Score:4, Insightful)
DRM Licensing (Score:4, Interesting)
Oh, if only Apple would license their cross-platform DRM! I know this will be modded as off-topic BUT I wish Apple would license its DRM to the BBC! That way, the BEEB would have an easy way of distributing their content in a non-Windows environment and still satisfy their perceived DRM need. It still would not make a native Linux method of playing BBC content, but it is pretty easy to get iTunes (for example) to run under wine. So, though it is not a perfect solution, at least it would be better than what the BEEB is doing now
So, go ahead, mod me off-topic, but I am hoping to at least also get to be modded as interesting as well.
Poor Universal (Score:5, Informative)
* Baby Boy Da Prince
* Bee Gees
* Drake Bell
* Black Child
* Brandon
* Big Tuck
* Big Tymers
* Blak Jak
* Bloodhound Gang
* Mutya Buena
* Vanessa Carlton
* Jamie Cullum
* Domination
* Down AKA Kilo
* Dispatch
* Drake Bell
* Godsmack
* Gotan Project
* Chris Gotti
* Pat Green
* Harry O.
* Heavy D.
* Infinite Mass
* Ja Rule
* Elton John
* Jack Johnson
* JoJo
* Juvenile
* Jordan Flynn
* Kaiser Chiefs
* Brie Larson
* Murphy Lee
* Lindsay Lohan
* Lloyd
* Damian Marley
* Stephen Marley
* Mika
* Mushroomhead
* Mystic
* Natalie
* Pharoahe Monch
* Prince
* Rakim
* Rammstein
* Scissor Sisters
* Strive Roots
* Sunland
The rest are here [wikipedia.org].
I'm not a fan of iTunes and have never bought anything off them, but Universals reasons for ditching them can only be nefarious. Okay so Prince isn't going to care, and Elton probably won't either. But if anyone knows the other artists it might pay to tell them what their label has done and that now might be a good time to think about their future with Universal.
Re:Worst case? (Score:5, Insightful)
HAH. don't hold your breath... and it _will_ be more expensive than iTunes, and it _will_ be more DRM-crippling than iTunes.
Yeah, competition's great.
Parent
Re: (Score:3, Insightful)
If Universal thinks that people will buy from another online source than iTunes, let them try. That's competition. EMI felt differently, and will win and grab a larger market share. Honestly I've never paid any attention to which labels musicians signed with before. But now it'll becoming blindingly obvious who's in what camp.
Re:Worst case? (Score:5, Insightful)
If they want to keep the DRM, good look trying to sell it on anything other than iTunes with Fairplay. They'd be excluding themselves from the biggest market.
If they're prepared to sell DRM-free, and want more than Apple's $1.29, they're screwed too, cause customers don't like being fucked by price hikes.
The fact is that by breaking their relations with the biggest distributor of downloadable music, they're only screwing themselves.
Parent
Re: (Score:3, Interesting)
Universal is going to demand DRM with their new provider. They will be cutting themselves out of that market (which I doubt is actually a huge consumer of online music since those players probably contain mostly ripped CDs, but that is besides the point) no matter what.
They just want more money and they dont want to give up DRM to get it. If they went somewhere else and sold their music DRM free I would probably buy it (assuming they have anything I want) but if its got some other DRM I wont buy it, becaus
Re:Worst case? (Score:4, Insightful)
There IS the issue of just how large their respective inventories are: I believe iTunes wins there.
Hey, there are many sources of cheap, independent music. I use them. I like them. But to say that 500 albums at 5 bucks each represents "a far better deal" requires some suspension of reality.
Parent
Re:Worst case? (Score:4, Informative)
I'd like to know who is selling less crippled music? With Microsoft's solution, to play on the PC, you need Windows Media Player, correct? Music from the Zune store only plays on the Zune. Allofmp3 is closed.
Apple does let you burn their DRM'd songs to CD, meaning you can play them in any CD player. You can also rerip. It's a crappy solution to get it onto a non-iPod player, but it's possible. Do other solutions offer this?
Parent
Re:Worst case? (Score:5, Insightful)
Parent
Re:Worst case? (Score:5, Informative)
Right. And what exactly do they not like about their deal with Apple?
They want to charge you more for their music. They'd like you to purchase multiple tracks for each device you own, and they'd really like it if you couldn't burn those tracks to CD.
Your post makes no sense because Apple has no say in the dealings that Universal does with other on-line retailers. Yes, competition is great. Theoretically, if Universal was uncomfortable with iTunes' dominance in the marketplace they would make sweetheart deals with other on-line retailers to provide cheaper music with more freedom to drive people away from iTunes, and the consumer would win. But that is not what is happening, because they're just too greedy, and the other tech companies too easily roll over to the whims of the entertainment industry. iTunes is successful in part because they're the only ones who have stood up to the record companies.
Instead, Universal uses its dominant position to strong-arm more money out of companies like Apple and Microsoft -- you'll recall that Universal stayed out of the Zune music store until Microsoft agreed to give then a cut of the Zune hardware sales. That's all that this is about.
Parent
Re:Worst case? (Score:4, Informative)
Anyway, I believe that DRM-free iTunes tracks can be converted to MP3 by simply right-clicking them and selecting "convert to MP3" in iTunes.
DRM-free tracks are the ultimate compatibility to other players.
The reason Apple wouldn't license their Fairplay DRM is because that would endanger the "safety" of the DRM, and the record companies would be angry if it was easily cracked (or so they say)
No-DRM is better than licensed-DRM, however you put it.
Parent
Re:Uh... what are you thinking? (Score:3, Insightful)
Universal wants to be able to up prices where it thinks it can get more money. Apple isn't letting them do that. How do you see it as a positive that they're going to go to someone who does?
Uh, this is what I'm thinking. (Score:5, Funny)
Parent
Re: (Score:3, Insightful)
Re:Uh... what are you thinking? (Score:5, Insightful)
Not to mention, Universal wants money from each iPod sold [slashdot.org], just like they get from the Zune [slashdot.org], (and they've been asking for that since before the Zune deal was announced). For some reason, they think that they deserve that, even though they didn't design the electronics, or the UI, and iPods are not sold with any Universal Music on them, and don't in any way require Universal Music to function correctly.
Parent
Re:Uh... what are you thinking? (Score:5, Insightful)
Parent
Re:Uh... what are you thinking? (Score:5, Funny)
That's like what -- a buck fifty total now?
Parent
Re:Worst case? (Score:4, Informative)
Parent
Re: (Score:3, Interesting)
Re:Worst case? (Score:5, Insightful)
Well, remember back when CD's came out...there really was no way to rip them...hell, not many people had a harddrive big enough to hold all a CD's data. At that time, a CD was a safe, one use medium...you could record off it to cassette, but, that was lossy and they didn't care that much about it.
Then...came larger harddrives, cd burners and cd drives on computers...and compression techs (mp3, etc). Well, what was once 'secure' to do consumer's hardware limitations, wasn't any more.
The music companies hate that...and with digital music and DRM, are trying to close that hole. They'd fix the CD's to be read only if there were only some way they could...trust me. They're gonna be happy to get rid of CD's if ONLY they can lock the users down in a way they screwed up on and didn't do with CD's.
They do not want to repeat the non-DRM mistakes they made with CD's.
Parent
Re: (Score:3, Funny)
-jcr
Re: (Score:3, Interesting)