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Music Businesses Media Media (Apple) Sony Apple

Japanese Musicians Defy Sony by Joining iTunes 320

Posted by Zonk
from the power-to-the-pods dept.
Homework Help writes "Japanese musicians under contract by Sony are defying their contracts by using Apple's iTunes service to deliver songs. Rock Musician Hotoharu Sano points out: 'It is an individual's freedom where that person chooses to listen to music. I want to deliver my music wherever my listeners are.' Sony Music Entertainment and Apple are still locked in talks and no agreement has been reached so far. Apple's offering of its iTunes service at lower cost in Japan is greatly attributed to their success." From the article: " Before iTunes' arrival, Japan's top music download service, which is backed by Sony and includes Sony recording artists, averaged about 450,000 downloads a month. By offering its service for lower prices, Apple is undercutting such online music services. Japanese are accustomed to paying twice as much as Apple is charging in Japan, which are still higher than the 99 cents charged in the U.S."
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Japanese Musicians Defy Sony by Joining iTunes

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  • by kinglink (195330) on Thursday August 11, 2005 @09:31AM (#13294371)
    Everything is more expensive in Japan, even Videos and Cds, but it's nice to see Apple realizes it doesn't have to be that much more, and is showing it by undercutting the cost of the service.

    It's the freaking internet, all they pay for is bandwidth and the music. Good to see that some companies remember that and are trying to avoid gouging. I just hope apple continues that path.
    • Everything certainly isn't more expensive in Japan (many electronics and restaurants are a cheaper in Japan than the US, for example, and anybody who's spent a while there will agree), but media is definitely more expensive there. I recently went to a movie theather in Hokkaido where two tickets cost exactly ¥3600 (about $34). This is pretty normal I learned, and CDs are uncommonly expensive everywhere. As an aside, renting CDs is very popular among the Japanese. So, that means that a large portion of t
      • So that's why the CDs are $30 or 35, because people rented and ripped them to minidisc and then mp3? Good deal I guess for the people, but the artists are getting screwed. Guess that means any real money has to come from touring. I considered importing a few CDs, but never went through with it when I saw the prices. If Apple ever gets cross-continent deals worked out with those labels, there are a few artists I'd like to finally pay.
    • Apple is not being "fair"... they're just pushing some decent competition on Sony's Music Store.

      Let's see if the price stays the same once they crush Sony's music service...
  • Wrong! (Score:5, Insightful)

    by gowen (141411) <gwowen@gmail.com> on Thursday August 11, 2005 @09:32AM (#13294374) Homepage Journal
    'It is an individual's freedom where that person chooses to listen to music. I want to deliver my music wherever my listeners are,'
    Yes, it is, initially.

    But you sold away that right in exchange from a large advance from Sony. You can't have it both ways. You can have your freedom or you can take the corporate dollar.

    When you sup with the devil, use a long spoon.
    • Did they? (Score:5, Insightful)

      by mcc (14761) <amcclure@purdue.edu> on Thursday August 11, 2005 @09:46AM (#13294498) Homepage
      But you sold away that right in exchange from a large advance from Sony

      Are you sure? That would depend on the details of their contract and the details of Japanese contract law, wouldn't it? Depending on those details they may well have sold away the right to Sony to distribute their work on CD while retaining some sort of right to independently negotiate sales through other entities on new mediums.

      We don't have copies of their contracts, so we don't know. But something of this sort is clearly the case with Mr. Motoharu Sano who said the thing you quote; otherwise Apple certainly would not have allowed his music onto their store in the first place, as doing so would have been illegal.

      You can't have it both ways. You can have your freedom or you can take the corporate dollar.

      This seems to be the case right now, but only in a practical or logistics sense. Aside from purely practical matters, there seems to be no good reason why this is the case, and so there is no good reason to shrug things off and accept the way things are. Not all evils are necessary.
    • But you sold away that right in exchange from a large advance from Sony

      Did they? What if they signed the contract in the 80's or early 90's before the internet became a way to sell music? Does Sony have the right to retroactively add terms that weren't even conceivable at the time to the contract? If so, I've got a contract here for you that says I'll pay you $50. Don't worry about the blank space at the bottom, I won't scribble in that you'll owe me $50 million after you've signed it. I promise.
    • But you sold away that right in exchange from a large advance from Sony. You can't have it both ways.

      Somewhere way back in history the phrase "you can't have it both ways" was uttered for the first time.

      And thus, lawyers were created.

      Really I think of it like divorce - this poor guy has shacked up with someone who turns out to be manic depressive - "No I won't join iTunes! You're sleeping on the couch tonight!!". What is he supposed to do, watch his carreer go down the tubes? Seems to me he has a right t
    • sold away that right in exchange from a large advance

      Or as the record companies have been so fond of explaining for years music is licenced not sold.
  • by drhamad (868567) on Thursday August 11, 2005 @09:34AM (#13294393)
    Good for them! They should be able to put their music everywhere and anywhere - isn't that why they signed on with a label in the first place?

    Of course, doing so in violation of their contract could put them in a sticky situation. I wonder what the contract actually says.
  • by goldspider (445116) <ardrake79 @ g m ail.com> on Thursday August 11, 2005 @09:34AM (#13294394) Homepage
    What is it these days??

    People sign things like NDAs, record deals, and professional sports contracts, and then expect us to be sympathetic when they decide not to honor their agreements?

    Want your music to be free (speech)? Great! Then don't sign a contract with a major label! It's that simple!
    • by garcia (6573) *
      People sign things like NDAs, record deals, and professional sports contracts, and then expect us to be sympathetic when they decide not to honor their agreements?

      I'm not sympathetic at all but I'm all for artists standing up to the oppressive recording conglomorates. If this is the only way that they can get extreme exposure, fair compensation, and more rights then I'm all for it.

      The only way the industry will change is with revolution.
    • by uqbar (102695) on Thursday August 11, 2005 @09:48AM (#13294514)
      These days there is very little need for the majors. Everything that musicians need to produce, promote and distribute music is cheap. But the majors have a stranglehold on the media - it's far harder to get mainstream exposure when you aren't playing the payola game (e.g. Sony [mtv.com]).

      Still unless musicians stand up to the majors and say no to crap contracts, and unless fans start supporting musicians that go the tougher indy route (by not stealing their music when they should be buying), things will move slowly, if at all.

      • Still unless musicians stand up to the majors and say no to crap contracts, and unless fans start supporting musicians that go the tougher indy route (by not stealing their music when they should be buying), things will move slowly, if at all.

        If the musicans stuck together, maybe things would change. But when a big record company is dangling a juicy contract with the devil firmly in the details, all the while being reminded that there are a thousand others just like you that would sign in a heartbeat, your
    • by Infonaut (96956) <infonaut@gmail.com> on Thursday August 11, 2005 @09:53AM (#13294552) Homepage Journal
      People sign things like NDAs, record deals, and professional sports contracts, and then expect us to be sympathetic when they decide not to honor their agreements?

      In business the breaking of contracts happens all the time. Those who break their bargains know that they're breaking contract, but the value of breaking the contract is higher than the value of keeping one that is too restrictive or favors the other party.

      The consequences are usually spelled out in the contract, so contract-breakers are essentially making a cost-benefit assessment and acting accordingly. You can call it a moral issue, but in American law no moral judgement or determination of guilt is made.

      Contracts and the breaking of them has been going on for a long time. I think we just hear more about it these days. As for being sympathetic to those who break their contracts, that's another story. When some rich athlete whines about a bad contract, he's certainly not getting my sympathy.

    • > Want your music to be free (speech)? Great! Then don't sign a contract with a major label! It's that simple!

      Want your computer to be free? Great! Then don't use any software whatsoever that comes with a EULA! It's that simple.

      And good luck with that .. your "free" computer makes a good doorstop/conversation piece.

    • People sign things like NDAs, record deals, and professional sports contracts, and then expect us to be sympathetic when they decide not to honor their agreements?
      Want your music to be free (speech)? Great! Then don't sign a contract with a major label! It's that simple!


      Megacorporations insert unfair clauses in contracts, using obfuscated legal language to screw over the little guy, and then expect us to be sympathetic when they decide to enforce them?

      Want to be stuck playing in dives and highschool proms f
  • by Anonymous Coward on Thursday August 11, 2005 @09:38AM (#13294420)
    iTuning Japanese, iTuning Japanese, I really think so.
  • Hobo King Band (Score:5, Informative)

    by Dachannien (617929) on Thursday August 11, 2005 @09:39AM (#13294429)
    The fellow's name is Motoharu Sano, and his band is called the Hobo King Band. Apparently, their music is not currently available on the American version of iTMS.

    • Re:Hobo King Band (Score:3, Informative)

      by argent (18001)
      You can listen to samples of his music at his website [moto.co.jp] (flash sample player).
    • Though, like most western people, I've never heard of the band, and the band probably wouldn't sell much here, I'm surprised they aren't listed. After all, it would cost about $0.00 to do so and at the least it could be good marketing.
    • It would appear that each countrys iTunes is specific to that country. iTunes UK carries al of the Manic Street Preachers albums, but iTunes US only carries one.
    • You can visit the Japanese iTunes store and listen to samples, even if you can't buy from it.

      The next advance in the record industry needs to be the distribution model, so that local merchants can sell CDs that do not yet have a local distributor.
  • by Doc Ruby (173196) on Thursday August 11, 2005 @09:40AM (#13294438) Homepage Journal
    How long before the record companies realize they've just lost to Apple their most important asset: the direct relationship with the customer? They've monopolized that position, between artist and audience, for a century, which is where they get all their power and money. Now that Apple has judoed (judone?) them to the mat, will they start to fight really dirty? Probably against the only thing they still have control over: us, the people in the audience.
    • How long before the record companies realize they've just lost to Apple their most important asset: the direct relationship with the customer?

      Actually, at least in the U.S., Apple has bent over backward to avoid threatening the record companies in this way. Apple only accepts songs from record companies, not from individuals. They could easily implement a way for their Garageband music mastering software to publish to the iTunes store either for free or for a set amount. This is a huge threat to the

    • How long before the record companies realize they've just lost to Apple their most important asset: the direct relationship with the customer?

      Has this been lost? Or simply transferred to Apple the same way artists have been passed between companies by contract sales and buyouts for decades.

      Is there really a change, or is Apple just the newest Master?

  • by alvinrod (889928) on Thursday August 11, 2005 @09:41AM (#13294452)
    If this report [apple.com] is to be believed then Apple is selling roughly half as many songs per day as Sony was selling per month according to the description.

    Give it a month or so and they will probably be going through 450,000 songs a day. I'm guessing that the reduced price has more to do with it than the Apple Brand. It looks like Apple is going to sell a lot of iPods to Japanese consumers.

    I wonder if these latest developments will be enough to bring Sony around to reaching an agreement with Apple.

    • Music in Japan is very expensive, in part due to the high cost of living and other economic factors. The only cheap consumer product in Japan seems to be Japanese comic books, the collected books can run about a third to to half of what it costs in the US.

      At any rate, a "single" CD with maybe four tracks costs about ¥1200 when converted to US currency, a full album is ¥3000+. It's easy to see why ¥150 per song is going to sell well.
    • Probably because in Japan sony is considered "cheap and tacky". They see the devices as disaposable because they find the quality so bad.

      Yet here people think Sony is a good brand. Go figure...
  • Riot! (Score:2, Funny)

    by djfray (803421)
    Yeah! They are really making a great point by defying the corporate tools they willingly and knowledgeably entered into a business agreement with, by selling out to other corporate tools!
  • by Fahrvergnuugen (700293) on Thursday August 11, 2005 @10:01AM (#13294599) Homepage
    How long before places like iTMS become the main source for distribution? The record companies should be getting nervous... once upon a time both artists and listeners needed them for distribution. Now they're useless.
    • How long before places like iTMS become the main source for distribution? The record companies should be getting nervous... once upon a time both artists and listeners needed them for distribution. Now they're useless.

      Then all the record companies need to do is buy out Apple. Truth is, Apple just isn't big enough to hold out against them if they want it.

  • by HangingChad (677530) on Thursday August 11, 2005 @10:06AM (#13294637) Homepage
    The margin they make on music sales is, by and large, dictated by the record labels. But when Apple deals directly with the artist they have the opportunity to formulate a split that more fairly compensates both parties.

    I doubt it adds up to much right now, but I see the day when places like iTunes are the music distribution channels of the very near future.

  • Does anyone know who is violating their contracts to get onto iTMS? Since I'm guessing each contract is unique, it will be interesting to see how Sony handles the inevitable lawsuits against popular bands vs. non-name ones. And whether the ones who are breaching their contract will ever be able to get signed by a major label again.
  • Music CDs are typically $20-$30 in Japan, so I can see why iTunes would be popular there.
  • by Gruneun (261463) on Thursday August 11, 2005 @10:21AM (#13294766)
    1. Sign a contract with Company A to create products
    2. Take money from Company A to create products
    3. Sell products through Company B for more money

    This is no different than whiny athletes who sign with a sports team and refuse to play until their contract is renegotiated. The amount of gross funds you generate, the fans you gain, and disparity in how profits are distributed are all irrelevant. Everyone was happy when the contract was signed and the only thing that changes are the attitudes of people who incorrectly (and quite arrogantly) see themselves as the sole source of that profit. Take a step back, see who the true money-grubbing whores are, and stop glorifying thieves.
    • Everyone was happy when the contract was signed

      Bull-shit

      Everyone appeared willing to follow the terms of the contract, even if they weren't happy with it. Perhaps they found it satisfactory.
      • Perhaps they found it satisfactory

        OK, I suppose it's within the realm of possibility that they weren't happy when they were offered a contract, but in fact, were simply satisfied. However, I'm willing to bet they were happy, perhaps shifting to simply satisifed, then unsatisfied, and eventually angry.

        I fail to see how any of that changes a damn thing.
  • How it should be (Score:3, Insightful)

    by Nom du Keyboard (633989) on Thursday August 11, 2005 @10:41AM (#13294932)
    Japanese musicians under contract by Sony are defying their contracts by using Apple's iTunes service to deliver songs.

    And this is how it should be. Musicians promoting revolution. Clearly the record companies are not looking out for anyone except their own fat bottom lines, and it's about time they take the hit for that. Go for it!

  • by Elias Ross (1260) on Thursday August 11, 2005 @10:41AM (#13294940) Homepage
    My wife's Japanese, and I like J-Pop. But, iTunes Japan won't be getting my money, since we live in the U.S. and you have to have a Japanese credit card to download from their site.

    It's actually easier for us to buy a CD from Japan and get it shipped to us, than try and send money to her Japanese bank account, etc.

    You can buy a money card from http://amazon.co.jp/ [amazon.co.jp] (it's on the front page) ONLY IF you are in Japan. They think of everything...

    I suppose eventually some stores are going to set up so you can purchase iTunes money cards overseas, but until then, iTunes Japan can kiss my ass.
    • But, iTunes Japan won't be getting my money, since we live in the U.S. and you have to have a Japanese credit card to download from their site.

      And how hard can it be to get a JCB card, especially when you have a bank account and family in Japan?

    • Don't blame Apple if they can't change they system; they are trying, and this is a first step. Apple is restricted by the contracts each specificy music organization requires for Apple to do business with.

      IE, the US's RIAA won't let Apple sell their music in China/Japan/etc, and Japan's equivalent here.

      It's stupid, yeah, but place the blame where it rightly belongs: On music cartels trying to limit music so they can maximize profit on the few channels they control.
    • You might already have done/known about this, but if not, humor me:

      In iTunes, go to Music Store, on the front page, (top-ish left) there is an America flag and a "Choose Store ->" link... Clicking that will let you switch to another countries store, such as Japan's...

      You can then do searches or choose Genre -> J-Pop and buy music for 200 yen (which is deducted from your credit card in USD after being converted.

      Maybe you have done this and the selection is limited, but as far as I know, anything you ca
  • by SnowDog74 (745848) on Thursday August 11, 2005 @10:44AM (#13294972)
    It's RIAA's worst nightmare. Not piracy... but artist independence. The entire reason that RIAA has been resisting internet music distribution since it became a reality in the mid-1990's is precisely because the industry's 50-year old distribution monopoly (Read "This Business of Music" [amazon.com] by Sidney Shemel and M. William Krasilovsky.) is directly threatened on such a wide-open medium with so few barriers to entry.


    The industry cannot compete on the internet effectively, and artists are awakening to the fact that in such a venue, they don't need to become the indentured servants of record companies just to see global distribution. The fact is, if they sell so much as one album on their own, they've made more money than 85 percent of the recording artists signed to major labels alone--who do not sell enough albums to recoup their recording advance.


    Using the royalty computation model explained in "All You Need to Know About the Music Business" [amazon.com] by Don Passman, an industry lawyer and professor, the average mid-level artist has to sell a quarter-million albums just to start seeing a dime of royalties.


    This luring of artists away from their record companies, into direct distribution, and cutting out about 9 or 10 middle-entities along the way, is basically "phase two" of the emergence of internet distribution as the dominant model.


    To make matters more interesting... Think about the implications here... In a world where even an artist selling 500 copies can make a better profit than a Britney Spears should her latest album sell less than enough to cover whatever six or seven figure advance she's been paid, there's going to be a much bigger selection of talented artistry out there... available for mass consumption. One won't have to resort to ridiculous marketing and promotions to make a buck... and that will make it harder for Britney Spears and the like to dominate the scene because they essentially bring nothing to the table


    Record companies with their moronic A&R departments so myopically focused on putting every last ounce of energy into pushing only the biggest international artists stand to lose everything... and their employees along with it (especially the overpaid, underimaginative executives).


    So, if you're still wondering why RIAA spends so much time, effort and money ice-skating uphill... It's because they have everything to lose, anyway. All they can do now is try to postpone the inevitable... and they're failing to do even that. But if they let down, it means they're going to have to get off their asses and find real jobs.

    • by Nom du Keyboard (633989) on Thursday August 11, 2005 @11:01AM (#13295143)
      In a world where even an artist selling 500 copies can make a better profit than a Britney Spears should her latest album sell less than enough to cover whatever six or seven figure advance she's been paid,

      An obvious flaw in your argument is that Britney keeps the seven figure advance too. You won't make that much profit on 500 Internet sales.

      But for those of you who aren't Britney (thank God there aren't more of her running around) and will never see such advances, it's a good deal.

    • I agree with your basic point, but:

      The fact is, if they sell so much as one album on their own, they've made more money than 85 percent of the recording artists signed to major labels alone--who do not sell enough albums to recoup their recording advance.
      ...the average mid-level artist has to sell a quarter-million albums just to start seeing a dime of royalties.

      You seem to be implying that the advance should not be counted as compensation.
      • by SnowDog74 (745848) on Thursday August 11, 2005 @11:42AM (#13295569)
        The advance is not compensation. It's a loan.

        More importantly, it's a loan from which the costs of recording are paid. In other words... Out of that advance, Britney has to pay:

        1. The studio

        2. The producer

        3. The musicians

        4. The songwriters

        5. The backup singers

        6. The business agent

        7. The manager

        8. Security

        9. Staff

        10. Personal assistants

        11. Music techs

        12. Sound engineers (yes, they cost extra)

        13. Transportation

        Usually, the entire advance gets spent on all of the above... the artist is now sitting with zero in the bank or even a negative balance after all is said and done.

        Now here's where it gets scary...

        The entire advance is a loan... That's right... it's owed back to the record company.

        Recoupment works like this...

        If Warner Bros. pays you a $500,000 advance for album 1, and has you optioned for three more...

        First you have to recoup the $500,000... but you don't recoup it at the gross MSRP of the albums sold. You recoup it at your royalty rate.

        The royalty rate an artist gets is not based on the MSRP. In other words, if an album retails for $15.98, the artist's cut... probably around 14% for Britney... is not 14% of $15.98. It's 14% of the royalty base less gross margin, i.e. about $7.98 ... after deducting marketing, distribution, packaging, promotions, and related costs.

        So now, that's about $1.12... pretty high actually for a Britney, believe it or not. But let's be generous and say that her royalty is $1.12.

        She has to recoup the $500,000 at that rate... $1.12 per album. So, she has to sell 446,428 albums just to pay back her advance.

        Now... UNTIL she pays back her advance, she does not get to keep a DIME of royalties. So, given that with a $500,000 advance she's probably spent every last dime of it, she's going to be broke if her album doesn't go gold. What's worse, she's still tied to her contract until she delivers the other optioned albums.

        But wait, it gets worse...

        If she gets a larger advance, she now has to sell even more albums to pay back the advance, meaning it takes even longer before she gets paid a dime... and usually when artists get a larger advance, they still blow every dime of it on all the aforementioned expenses.

        But here's what's more... If she has any contracts with band members or producers to get paid royalties... their percentage take comes OUT OF that $1.12... Then the business agent and managers take their cut... 15% of what's left? No, 15% of $1.12 per album.

        It still gets worse... the artist is the last person to get paid. The business manager handles all disbursements (just like a lawyer on retainer)... everybody else gets paid, then the artist takes what's left.

        It gets worse, still... If any tracks on the demo submitted to the A&R department are rejected, Britney has to go back to the studio and record some more...but if she's blown her advance already, then the additional recording costs come out of her pocket.

        It gets even worse, even now...

        If Britney's album is a failure and lets say $200,000 has not been recouped... When her next album is due, the $200,000 unrecouped balance gets pooled with the advance for the new album. Now she has to still recoup both... but there's more. Until she has paid off all her debts, she cannot get out of her contract... she still owes the record company material.

        But there's still more...

        The record company may incur additional expenses related to the promotion of the album... whenever an A&R agent wines & dines a program director at a radio station, whenever someone uses a jet to fly from LA to New York and meet with program directors there, whenever transportation costs and other overhead expenditures are incurred in relation to the promotion of her album, etc.... all these expenses are deducted from her advance and/or royalty checks first.

        • Very interesting to hear these sort of details. *NO WONDER* record companies are so scared.
        • by SnowDog74 (745848)
          Let's not forget that all the aforementioned expenses are entirely outside of what Britney does with the rest of her life.

          Any parties she throws, her mortgage, car payments, phone bills, shopping for $5000 purses, trips to Ibiza... whatever's remaining, if anything, from the advance... is pretty much her earnings for the time being.

          Then, on top of it all, let's not forget the income taxes on the royalties. Of course, since a recording artist is an independent contractor and not an employee of the record

  • by Nom du Keyboard (633989) on Thursday August 11, 2005 @11:09AM (#13295219)
    The record companies have too much power - especially Sony. Take the example of Fiona Apple and her third album "Extraordinary Machine" which was completed nearly two years ago and never officially released. It finally leaked out over BT and P2P (yeah), but when a record company can sign you and then bury your work this has gone too far.

    Therefore, anything that weakens them is not a bad thing for the world at large.

  • by Orrin Bloquy (898571) on Thursday August 11, 2005 @01:07PM (#13296555) Journal
    ...finally get my hands on all that Japanese Country music I've been hearing about:

    "The Corner Automat Stopped Selling Your Panties Today"
    "My Ecchi Breaky Heart"
    "You Took My Heart, My Dog And My Battlesuit"
    "She Said I Was Her First, But The Tentacle Marks Don't Lie"
    "I've Been Drowning In Sake Since Your Webcast Bukkake"

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