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The Almighty Buck Businesses Apple

Music Industry Threatens to Pull Plug on Apple 733

Posted by Zonk
from the like-to-see-them-try dept.
bacterial_pus writes "First the music industry wanted more money, by changing Apple's 99 cents per song policy. Now one exec is threatening to pull the plug on Apple if Steve Jobs doesn't change the iTunes Music Store pricing." From the article: "Nash's comments echoes those made last week by Warner CEO Edgar Bronfman, who called for Apple to adopt variable pricing and share out revenues from iPod sales. The record companies' position is based on the dubious argument that digital downloads sell iPods. In fact all the evidence points to the opposite: that iPod sales have driven demand for downloads. The vast majority of digital music sales are made by iPod owners. Cut off Apple and the labels digital sales will slump." More recently Jobs resisted their pressure, and the execs snarked back. Looks like they're getting more serious.
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Music Industry Threatens to Pull Plug on Apple

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  • Quotable quotes (Score:5, Insightful)

    by M00NIE (605235) <poweredbystrutsg ... m ['aho' in gap]> on Friday September 30, 2005 @05:17PM (#13688817)
    Quoted from the article: 'What if Jobs says 39 cents or 29 cents per download - what then?'

    *gasp* MORE people might actually BUY your music... NO the humanity, the HUGE MANATEE!

  • Ridiculous (Score:5, Insightful)

    by pen (7191) on Friday September 30, 2005 @05:17PM (#13688818)
    To echo comments in the previous article, asking Apple to share iPod profit is like an electric company asking Maytag to share their profits from selling washing machines. (Or like oil companies asking automobile manufacturers to share their profits.) And so on...
    • by DaveFromChicago (915169) on Friday September 30, 2005 @05:20PM (#13688860)
      What? You mean the recording industry doesn't get a cut whenever a CD player or a set of speakers is sold? Clearly the music industry is floundering.
    • But what if... (Score:3, Insightful)

      by kweg (305533)
      Buy what if i own a company that made most of the clothes that are washed in Maytag washing machines I should get a bit of the profit then...
      Right?...
    • Re:Ridiculous (Score:3, Insightful)

      by soft_guy (534437)
      Or perhaps Maytag will give some of their profits to Tide.
    • The record labels are biting the hand that feeds them. Talk about choking the goose that laid the golden egg, and now they want to break its neck to get the gold out all at once.

      Stupid stupid stupid.

      I hope they get what they deserve.

      Six weeks in hell.

      Raydude
      • by Midnight Thunder (17205) on Friday September 30, 2005 @06:09PM (#13689356) Homepage Journal
        The record labels are biting the hand that feeds them.

        They bite the vendors, and they screw everyone else, including the artists and the buyers. If this is not monopoly abuse then I don't know what is. I think your average drugs dealers is a bit better than these guys - even they aren't, at least the law knows how deal with drugs dealers.
        • by ack154 (591432) on Friday September 30, 2005 @06:24PM (#13689493)
          I think your average drugs dealers is a bit better than these guys - even they aren't, at least the law knows how deal with drugs dealers.


          I think that should be "at least the law WILL deal with drug dealers."

          So far, no one really seems to care about what the music industry is doing. Because if someone says something to them, they will just scream "PIRACY! PIRACY!" and the government turns the other way... "oh, carry on then."
    • by TCQuad (537187) on Friday September 30, 2005 @05:43PM (#13689092)
      I think you're being a little harsh. Let's allow the market decide if the RIAA deserves some of the proceeds from iPod sales.

      At the sale of each iPod in the Apple store, ask the customer to donate $1, $10 or $25 directly to the RIAA. Apple will collect the money and (after assessing appropriate handling charges) send them a check.
  • by Rockenreno (573442) <(rockenreno) (at) (gmail.com)> on Friday September 30, 2005 @05:17PM (#13688822)
    This just another attempt of theirs to eschew their customers and get a bigger slice of the pie. Methinks their egos have grown too big for their britches.
  • Yeah, right (Score:5, Insightful)

    by rjung2k (576317) on Friday September 30, 2005 @05:18PM (#13688826) Homepage
    How many hits does the iTunes Music Store get in a day?

    Hell, how many does it get in an hour?

    Good luck walking away from that, Mr. Nash...
    • Exactly (Score:5, Insightful)

      by sterno (16320) on Friday September 30, 2005 @05:39PM (#13689061) Homepage
      ITunes is doing a lot to keep the money rolling in. While they may not make as much per track I guarantee that the labels are overall selling more music per listener through ITunes than they do through physical CD's. It's much better suited to impulse buys and it's less noticeable when you buy a lot of music because the bill doesn't show up til the end of the month.

      ITunes provides a viable way to get music quickly the moment you want it and it gives you a way to do it that insures the music industry gets paid. If they cut off the air supply to Itunes, all of that file swapping that happened before is going to go up exponentially. So rather than diverting those users back to physical CD's, they will simply lose them as customers all together.

      Frankly if Apple's smart they could probably play such a stand off against the labels quite well. Think about the average person's perception of IPod, ITunes and Apple versus their perception of the average music label. Apple can go direct to artists and bypass labels all together. Sure a lot of artists will have contracts that keep them locked into the existing labels, but with people already hooked into ITunes it will be easier to convert people to newer less well known arists.

      So please labels, make a stand so we can finally flush you.
    • Re:Yeah, right (Score:3, Interesting)

      by LetterRip (30937)
      [QUOTE]Good luck walking away from that, Mr. Nash... [/QUOTE]

      I doubt he is seriously contemplating it, he would be almost sure to be hit by a class action law suit from his investors if he did and would probably lose such a suit.

      LetterRip
  • He sounds scared (Score:5, Insightful)

    by SoCalChris (573049) on Friday September 30, 2005 @05:18PM (#13688827) Journal
    'What if Jobs says 39 cents or 29 cents per download - what then?

    Someone is threatening their monopoly.
  • don't blink, Apple (Score:5, Interesting)

    by yagu (721525) * <yayagu@gmai[ ]om ['l.c' in gap]> on Friday September 30, 2005 @05:19PM (#13688835) Journal

    Upfront disclaimer: I'm a total idiot, and I have no idea how businesses work, nor do I have any legal background.

    So, I wonder if this is a confrontation Apple may welcome, and maybe even brought semi-intentionally. My hunch is the thesis: iPods generate sales, rather than download sales generate iPod sales is the more correct dynamic at work in this market.

    There certainly are plenty of alternative sources of music, music that could temporarily replace the current source for iTunes, should the music industry call Apple's bluff. But I think the music industry stands to lose way more than Apple. The music industry could:

    • lose revenue
    • lose confidence of the consumers
    • lose artists
    • lose relevance
    Apple, on the other hand still offers a sweet product (even a sweet suite of products) and there are myriad ways to get music onto their devices. Sure, a speedbump in iTunes could require a detour, but I think Apple faces little risk. Apple could be the huge winner here. In my opinion, Apple already is at least the winner, they've dared not to blink and the music industry is starting to look silly.

    Me, I refuse to play one way or the other with any of DRM markets, but I give Apple grudging credit for offering a palatible product and willingness to take on the hand that feeds.

    • by LnxAddct (679316) <sgk25@drexel.edu> on Friday September 30, 2005 @05:43PM (#13689095)
      Steve Jobs could potentially become the poster boy for our generation from this. If the record labels do pull out, all Steve Jobs has to do is stand up on a soap box and say

      "Look everyone, I tried my hardest to make it easy and affordable for you to get music over the internet. We had succeeded at this and we revolutionized the industry. You and me showed the world that if you were given the choice to affordably download music that you'll choose that over pirating. Alas, the music industry has become extremely greedy. Their profit margins are already extremely inflated and they just want more money. The only option they left open for variable pricing was price increases, but where are the price decreases? It costs them nothing to distribute music this way, its cuts out the cost of the CD, the CD case, the label in the case, the cost of shipping, the cost of manufacturing. It is saving them extreme amounts of money, but they are just becoming greedier. As a result I hope we can all band together and boycott the RIAA, Sony, Warner, etc... Obtain your music through alternate channels, rip it off your old CDs, do what you must but please don't support these labels."

      He would instantly be praised and supported by millions of teens and twentysomethings, cutting nearly completely into the record label's profits. On the other hand, Apple could also simply start their own music label and really rock the industry.
      Regards,
      Steve
    • by FFFish (7567) on Friday September 30, 2005 @06:09PM (#13689353) Homepage
      I daresay Apple could fully well step right into RIAA's territory and sign up artists for exclusive distribution. I know if I were choosing a rep, it'd be someone like Apple, which would very likely strike a win-win deal that enables me to make a good living as an artist; than someone like RIAA, which I know will do everything in its power to fuck me over and leave me indebted to them.

      I should go find out what happened between Apple Computers and Apple Records. I'm a little surprised Apple is in the music business, given their original agreement with Apple Records was to stay well the hell out of anything that looked like music.

      If Apple were smart enough to have just bought AR outright, they might very well already have a mechanism in place to support artists. And that, my friends, would be the start of the entertainment revolution: independents who can make a good solid living from their work.
    • by ArbitraryConstant (763964) on Friday September 30, 2005 @06:11PM (#13689369) Homepage
      I don't know if you're an idiot or not but it doesn't look like it from your post.

      I think Apple will ultimately cave, but they want to make the labels look as bad as possible before that. Apple's actions to date support that theory, because the longer and more public the battle is the worse the labels will look. Apple can make the labels look bad without actually saying anything that can get them sued.

      Towards that end they may be putting up a fight over issues they are ultimately prepared to accept, like variable pricing. I don't think Apple's motives are altruistic (I think they mostly want to rip people off on iPods instead of on music), but if this is a battle for public opinion, an already poorly regarded industry is going up against probably one of the best PR companies there is.
  • by mspohr (589790) on Friday September 30, 2005 @05:19PM (#13688836)
    Having observed their behavior in the past, I fully believe that the music industry really believes that they are doing Apple a favor and that they can cut Apple off.

    If they close iTunes, iPod users will just rip their own music (and share it) leaving 0 revenue.

    • I don't see them closing iTunes Music Store. If all of the labels backed out, Apple would probably start focusing on indie bands, and put more focus on the podcasts. I can see them allowing indie bands to set their own pricing on their songs, and providing for "premium podcasts" that require either a subscription, or purchase of individual podcasts. In fact, I wouldn't be terribly surprised if they start doing that anyways.
      • by Bastian (66383) on Friday September 30, 2005 @06:17PM (#13689421)
        My dream scenario for this starts with the RIAA following through and yanking the rights to all of their music from Apple.

        Should this happen, Apple will have to find something to do with iTMS - I think shutting it down would be their very last resort. Much more likely, Apple cashes in on what little "counterculture" street cred they might still have, and starts courting independent bands and labels.

        Freed of the insatiable greed of the RIAA, they and the indie lables start turning the store into a much better service. The samples will get longer, and you will even be able to download full songs from many bands looking to market their new albums. The iTMS becomes a worthwhile service, and rapidly gains popularity. Pundits declare it the center of the independent music Universe, and hail Apple as the Greatest Company on Earth.

        On top of that, Apple starts really capitalizing on the podcast thing. They start arranging agreements with various news and sports radio networks whereby people can subscribe to shows for a price. Apple breaks out of the young technophile music-head market and starts getting the attention of NPR addicts. (However, they will draw ridicule when their ad campaign featuring sillhouettes of people wearing headphones sitting at desks or driving home in traffic and being less bored than normal is launched.)

        Through it all, Apple fares fairly well, and may even lose some of the "evil corporation" reputation it's been earning lately, although its profits may take a slight hit as the iTMS becomes more expensive to run. iPod sales will stay where they are, because iPod sales drive iTMS sales, not the other way around. Customers aren't hurt because there are plenty of other places to download MP3s on the internet.

        The RIAA, though, ends up with egg on their face as their play at forcing Apple into a position where they can be accused of (and sued for) actively supporting piracy with iTunes and the iPod fails miserably. They also hurt their sales as they close down a small but noticeable source of revenue and it is promptly replaced by the biggest advertisement and point of sale that their competitors have ever had. Their reputation suffers further as a few more people are added to the ranks of those who think the RIAA is a pack of fucking morons with a greed problem.
    • by Hellasboy (120979) on Friday September 30, 2005 @05:32PM (#13688975)
      wasn't it in japan a few months ago where sony artists were tired of the bickering between sony and apple in regards to itunes that they just said kcuf it and started releasing their songs on itunes in spite of their contracts?

      maybe the same thing can happen here with artists backlashing against the riaa (who are supposed to represent the artists themselves but seems more likely they are representing the executives). but i guess that would depend on the character of the band.
  • by CyricZ (887944) on Friday September 30, 2005 @05:19PM (#13688840)
    Perhaps legal action could be taken on the basis of price fixing/gouging if they were to actually drop Apple because Apple would not sell at the price the industry demanded?

    • To finish your sentance: as opposed to the price that the market sets.

      The problem is that other than a couple on-line wanabies and a grey source (allofmp3) the apple store is the only source. The monopoly still exists.

      What we really need is another eStore to open, selling comparible (and compatible DRM) music at slightly lower prices (97c anybody). Let the market open and the pricewar evolve. shortly one of the two will pick up the 'variable price per song based on download rate as a measure of popularit
  • Finally... (Score:4, Insightful)

    by Ikn (712788) <rsmith29NO@SPAMalumni.nd.edu> on Friday September 30, 2005 @05:19PM (#13688845) Homepage
    The recording industry is 'picking on someone it's own size'. Apple may not be able to really compare equally with the entire industry, but it has enough notoriety, money, marke share, and general influence that I don't think the RIAA or anyone else is really going to want to get into a legal / PR brawl with them.
  • by metternich (888601) on Friday September 30, 2005 @05:19PM (#13688846)
    It's probably just a bluff, but if the Music Industry does go through with this it would be incredibly stupid of them. I know it would be contrary to their agreements with Apple Records, but if the music execs do go ahead with this, I think Apple should start selling music directly from the musicians rather than going through the labels. They could simultaneously reduce the prices and give the musicians much more than they get under their current contracts.
    • by Soul-Burn666 (574119) on Friday September 30, 2005 @05:42PM (#13689085) Journal
      They should do what some slashdotter wrote a while ago.
      When you select songs, the song price should be written and additionally the break-up of where the money goes. When they see 9c to apple, 90c to the record company and 1c to the artist, they'll understand something is wrong.
      Then they'll see indie labels, 10c to apple, 40c to record comapny, 50c to artist.
      And then indie artists, 10c to apple, 90c to artist.
  • by Stanistani (808333) on Friday September 30, 2005 @05:19PM (#13688848) Homepage Journal
    a nice move would be to call for price cuts - about 50% would be about right.

    Jobs should do this in front of Congress, if available.

    I'll bet he could disclose how little it costs to distribute the songs, and pose the musical question - "How Much Profit?"
  • by Stickerboy (61554) on Friday September 30, 2005 @05:20PM (#13688856) Homepage
    Ford and GM announced today that unless Exxon and Shell start sharing gasoline revenues, future SUVs will run on ethanol.

  • Price fixing? (Score:3, Insightful)

    by vena (318873) on Friday September 30, 2005 @05:20PM (#13688861)
    now, IANAL, but isn't attempting to force pricing schemes on the retail end illegal? aren't they only allowed to change their wholesale price to the retailer?
    • Re:Price fixing? (Score:3, Interesting)

      by rainman_bc (735332)
      now, IANAL, but isn't attempting to force pricing schemes on the retail end illegal?

      Nope, it happens all the time, at least in Canada. I recently bought some 33" Goodyear MT/R tires for my Jeep. Vendor couldn't publicly quote a price for them in writing because he'd lose his license to sell goodyear tires.

      While I agree it's anti-competitive, it happens in industry all the time.
      • Re:Price fixing? (Score:3, Informative)

        by vena (318873)
        well in america the states have already sued them once for doing this with CDs. august, 2000. the labels settled for $67.4 million. link [zeropaid.com].
  • 'bout normal (Score:5, Insightful)

    by Nf1nk (443791) <nf1nk.yahoo@com> on Friday September 30, 2005 @05:21PM (#13688865) Homepage
    The recording industry never saw a cash cow they didn't want to kill.
  • classic example (Score:5, Interesting)

    by MORTAR_COMBAT! (589963) on Friday September 30, 2005 @05:22PM (#13688870)
    of giant businesses who seem to have no idea just how good they've got it.

    this is 2005.

    the fact that people are still paying for downloads at all (including me, I have well over 200 iTunes songs) in 2005, YEARS after Napster started the easy-as-pie method of music aquisition... do the music companies really want to go ahead with this? do they want to return to the days of talking about free tunes on Napster instead of paying for iTunes?
  • by NatteringNabob (829042) on Friday September 30, 2005 @05:22PM (#13688872)
    I'd love to see Jobs tell the RIAA members to go screw themselves and open up iTunes as a 'label' for independent artists most of whom would probably be happy to take a much smaller cut then the leaches at the labels do. Talented muscians don't need multi-million dollar marketing campaigns to be successful, they just need an audience. And iTunes could deliver that audience much more efficiently than Warner or Sony/Columbia ever could.
  • by crimethinker (721591) on Friday September 30, 2005 @05:22PM (#13688874)
    Did I read the record execs comments correctly? They want to artificially inflate the price of some songs? Gee, I wonder if their bravado has anything to do with the fact that they made a hella lot more money on price-fixing CD's than they had to pay in penalties when they were finally busted.

    Or maybe they need the money; for all I know, the price of snorting coke off a stripper's breasts has gone up dramatically in the last year or so.

    -paul

  • Don't dream (Score:3, Informative)

    by imr (106517) on Friday September 30, 2005 @05:24PM (#13688900)
    There was a fight years ago between TV channels and Record compagnies about Videos.
    The TVs didnt want to pay because they were doing free advertisements for the records, the Record companies wanted money because the TVs were doing money showing the videos.
    And yes the sales of records were going up thanks to the music videos. Well, TV channels had to pay anyway. End of the story.
    As long as you give money to pay the records or whatever is coming from those record companies, they are controling the market, they are controlling the music, they are controlling the medias.

    Give your money to alternative music channels that respect your rights and the music and the artists.
  • by the_2nd_coming (444906) on Friday September 30, 2005 @05:26PM (#13688923) Homepage
    That is wht the Tech big wigs need to do. Google should buy one, yahoo, MS and Apple.

    I watched a business show about this and tehy said that each of those companies market caps are large enough to buy one company each. then all you need to do is make the tech companies share the catalouges amoungst each other.

    Tech companies that are trying to sell their technology will have a friendler stance about copyright and the consumer than the record companies would.
  • In fairness... (Score:3, Informative)

    by Blondie-Wan (559212) on Friday September 30, 2005 @05:32PM (#13688981) Homepage
    The record companies' position is based on the dubious argument that digital downloads sell iPods. In fact all the evidence points to the opposite: that iPod sales have driven demand for downloads. The vast majority of digital music sales are made by iPod owners.


    Not to give the labels too much credit (they certainly give themselves more than enough), but in fairness, I think they do have a bit of a point with this. iPod sales did rise dramatically after the introduction of the iTunes Music Store to levels well above what they'd been immediately before (and they've been going up ever since). That said, it may also have something to do with the boost to the iPod's Windows-friendliness around the same time (the 3rd gen iPods, which introduced dual-platform support in a single box and the ability to use USB as well as FireWire), or simply market awareness and the "fashion" factor building to a head.

    In other words, I don't think we (those of us outside the industry, without access to their market research) truly know to what extent iPod sales are driving iTMS sales and to what extent iTMS sales are driving iPod sales, and I think a decent case could be argued in either direction.

    That said, the music industry's apparent sense of entitlement to a piece of Apple's iPod revenue, and its threat to pull out of a store offering their product in a medium that both offers them some control over how consumers use it and reduces the costs associated with manufacturing, shipping, storing, etc. physical goods to virtually nothing, are pretty damn ludicrous. They ought to be on their knees thanking Apple for finding a way for them to generate earnings while dramatically reducing their costs; instead they're demanding more slop in the trough. I'd dearly love to see them pull out and then watch their earnings disappear as consumers finally decide they've had enough of this shit and spend their music money on alternative content providers, but I know better than to expect that.

  • by dada21 (163177) * <adam.dada@gmail.com> on Friday September 30, 2005 @05:32PM (#13688982) Homepage Journal
    iTMS is destroying the RIAA's right to speech:

    1. The RIAA can't pat iTMS DJs and Producers to force users to download the hot song of the week.

    2. The RIAA can't pay iTMS to list the proper version of the Top 40 Charts.

    3. The RIAA can't control which markets get their music, heaven forbid a black consumer getting a listen to Kenny G by accident.

    [/kidding]
  • by ivanmarsh (634711) on Friday September 30, 2005 @05:33PM (#13688989)
    Why should Apple be treated differently than all the other music player manufacturers in history?

    Did the music industry get a cut of Sony's CD player sales? Toshiba's? JVC's?

    It's time for the RIAA to have a RICO case brought against it.
  • good luck (Score:3, Insightful)

    by nunchux (869574) on Friday September 30, 2005 @05:33PM (#13688993)
    I don't think there are many who love the iTunes music store so much that they run out and buy iPods. Sales may take a hit if the store is brought down, but the iPod won't lose its status any time soon. Anyway, there are so many other ways to acquire music for it-- and more importantly, most of us already have the collection to fill it.

    What I think we may be looking at is that the labels want their own online music services (and in the case of Sony, also sell their own players) so there is no moody Apple middleman between them and the consumer. Again, Sony is already there, and others may be too. I'm not sure where the trails of Warner's parent and sister companies lead.
  • by artifex2004 (766107) on Friday September 30, 2005 @05:33PM (#13688994) Journal
    The music industry needs to see what would happen if they kill this cash cow by trying to milk it too hard. One day would probably not be sufficient, so let's have a week, or maybe just 5 days, where you can't buy anything from the iTunes store. Make it be the last week or 5 days days in a reporting period, because a lot of the pent-up demand will recover the next week, probably.

    Better yet, let's see Steve Jobs say, okay, you want variable pricing, we'll hook up with Magnatunes and CDBaby and sell their tracks for 50-75 cents, or something. Those indy labels could really use the visibility, and the artists might see more revenue even at that lower rate than the ones beholden to RIAA and the big corporations. Some of them might even ask Apple to distribute their tracks as m4as, not m4ps, and would probably volunteer a lot more free tracks of the week.

    Also, I can't believe they want some of the revenue stream from iPod sales. They had nothing to do with their creation, sales, marketing, etc. They're just becoming more obviously money-hungry than ever before.
  • by chmilar (211243) on Friday September 30, 2005 @05:35PM (#13689016)
    Here is how I'd like to see the scenario play out:
    1. Record company cuts Apple off.
    2. Loss of revenue for record company.
    3. Record company crawls back to Apple. Jobs negotiates new terms, and record company has worse deal (lower price and/or lower percentage) than now.
  • Mark the RIAA songs (Score:4, Interesting)

    by MightyYar (622222) on Friday September 30, 2005 @05:36PM (#13689029)
    A feature I asked for from Apple a long time ago was information about whether or not the label distributing the song was independant or not.

    Not only would this be a good time for Apple to implement this as a sign that they won't back down, it would finally free me of checking RIAA Radar [magnetbox.com] everytime I go to the iMS to download a song!

  • Why iTunes? (Score:3, Insightful)

    by R.Mo_Robert (737913) on Friday September 30, 2005 @05:36PM (#13689031)

    Why are they going after iTunes, which coss 99 cents, while many (most?) other WMA services offer tunes for 89? And why do they care how much the retailer actually changes the consumer for the song? Shouldn't the record company just be concerned about how much money it's getting from each one, regardless of the retailer's price (leave the reatailer to decide how much profit they want after that)?

    • Re:Why iTunes? (Score:5, Insightful)

      by n8_f (85799) on Friday September 30, 2005 @06:14PM (#13689395) Homepage
      Because Apple's contract is up. They negotiated a contract for 2 (or has it been 3?) years and now they have to re-negotiate the contract. Then the record companies can use this to force the next contract re-negotiation to raise prices (kind of like IP "parity" - Australia grants 200 year copyrights so now we have to too stay even - except we tack on an extra 50 years and now Australia...). Also, iTMS has like 85% of the market, so the recording companies have to take them down a peg. They want competition amongst distributors, a typical divide and conquer strategy. If they were solely reliant on digital distribution, they would be fucked, because Apple could basically dictate terms to them. They want a bunch of digital distributors with small percentages of the market so that if any of them get out of line, they can destroy them with out affecting their bottom line. It is very similar to Microsoft, in that they encourage fierce competition amongst hardware manufacturers, leading to lower prices and razor-thin margins, while maintaining a monopoly on the software needed for that hardware, ensuring they can enforce high prices and even higher margins.

      I really hope Apple holds out, because otherwise we are going to be screwed, ceding all market power to the RIAA.
  • by mmeister (862972) on Friday September 30, 2005 @05:38PM (#13689054)
    The Music Industry is right about the need for variable pricing.

    New tracks should be $0.99
    Older tracks should be $0.50

    Oh wait -- you actually think that a track is worth more than a buck even as you try to continue to limit how I listen to that track?
    I don't think so.

    I'm not a huge fan of DRM, but Apple does make it fairly simple and it doesn't really get in your way for day to day uses like some others do.

    RIAA's cut on these tracks is PURE PROFIT. They're not paying for the bandwidth to download the music. They're not paying for software changes to showcase the music. They just get a big, fat check. And as is typical with these greedy RIAA execs, they want more. Why not, they've been stealing from musicians for decades without providing real value added services, so they feel they should get a cut of everything. Hopefully they're going to get a dose of reality real soon.
  • by OzPhIsH (560038) on Friday September 30, 2005 @05:41PM (#13689076) Journal
    How exactly is the relationship between Apple and the large record companies defined? Surly there is some kind of contract in which Apple pays X% of of an iTunes sale to the song's owning record label. If they record labels back out, won't it result in some sort of contractual breach? (Anyone who knows more, please reply)

    I think the record companies (unsurprisingly) underestimated the the kind of sales that the iTMS would do. Now perhaps they're finally waking up to the reality of the situtation, that this is how people WANT to purchase and enjoy their music. I mean, how long ago was the old Napster? More than 5 years. FIVE YEARS. After all the bitching and moaning, the labels STILL don't have their own digitial distribution mechanisms. It just shows that the labels were and are still sooooo dimwitted and clueless. And now, "oh wait look, Apple is making money on this online store that we should have made ourselves 5 years ago to react to market demand. Apple should give us more money. Wahhhhh!" Well I say FUCK YOU record labels. You did this to yourself. You underestimated the market, your customers, the technology, and EVERY OTHER ASPECT of running your businesses. You signed deals with Apple letting them sell your music for 99 cents a track. It must have been a good deal then, right? Why else would you have signed to such a deal? If you're unhappy with the terms now, thats your own fault.
  • Big mistake (Score:3, Interesting)

    by HangingChad (677530) on Friday September 30, 2005 @05:45PM (#13689114) Homepage
    I'd be willing to bet Apple to could survive and thrive as a music producer AND distributor. It might take a while, but if Apple started cutting new groups a good deal for hosting their music, they could attract a lot of talent away from the big labels.

    If that's what Apple is thinking, and I'd love to see them do that, they'll call their bluff on the threat.

    This is great.

  • by VP (32928) on Friday September 30, 2005 @05:49PM (#13689154)
    I strongly believe that the way things are presented, including the exact words used, has a great impact on our perceptions. George Orwell built on that with "Newspeak" in his "1984". We are seeing this every day to a greater and greater extent from politicians and people in power (PATRIOT act, for example).

    This is why I think it is very important to pay attention to the words used. In this particular case, the "music industry" implies that musicians, composers, authors are all lumped together. We need to distinguish between the greedy b****rds who run the music publishing cartel from the rest of the "music industry".

    Similarly, we should expand DRM to "Digital Restrictions Management" because that is what it actually is.

    It may not make an immediate impact, but over time more and more people will understand what the opponents of DRM and RIAA have been trying to say for a long time now. Education is the most effective weapon against oppression, and using the right words is one part of educating those who "don't get it".
  • Were I Steve Jobs (Score:5, Interesting)

    by Todd Knarr (15451) on Friday September 30, 2005 @05:53PM (#13689187) Homepage

    Were I Jobs or Apple, I'd pull a preemptive strike. Announce "Since Warner Records doesn't feel the agreement with iTMS is fair, we've decided to resolve the problem. All Warner titles have been removed from iTMS and Warner Records has been released from the agreement. They're now free to market their music through a service whose pricing is more in line with their desired price points.". Then sit back and watch Warner scream as their sales plummet.

  • Textbook case (Score:3, Interesting)

    by overshoot (39700) on Friday September 30, 2005 @05:54PM (#13689202)
    Hmmm -- let's see. An industry is dominated by five (5) big companies, who all belong to a trade association. Said trade association has already been been caught, fined, etc. for price fixing.

    Now "the Association" approaches a major customer of said companies and attempts to dictate an increase in prices with the threat of all of its members shutting off said customer in concert.

    Please, please, PLEASE do it, RIAA. I'm begging you, don't chicken out. Jobs and Apple have lawyers and aren't afraid to use them, and this one might even qualify for Section One treatment.

  • by whogben (919335) on Friday September 30, 2005 @05:54PM (#13689209)
    I think the name for this kind of request is "Protection Money." The record companies are used to being the biggest kid on the block, they are used to winning unbalanced cases with hoards of lawyers, if the gloves really come off in this fight Apple will be more than they can handle. Steve has already publicly called them greedy - but what if built into the iTunes music store when you went to buy music was a brief explanation of why people can't buy their music, and a signup page for a CD sales boycott? How about a link to lime-wire? What if through iTunes, I can start a musician account with Apple, upload my music to them and make 15 cents a download? The record companies need to realize just how much backlash there could be.
  • by putko (753330) on Friday September 30, 2005 @05:56PM (#13689228) Homepage Journal
    If I recall correctly, Bronfman (the name refers to making brandy, in German -- but Bronfman is as kosher as gefilte fish), is from a long line of alcohol makers. They supposedly made their fortune dealing in liquor illegally during Prohibition by making a huge fraction of the illegal alcohol sold in the US.

    His daddy was in essence a kosher Pablo Escobar.

    Little Bronfy himself presided over the shameful shakedown of Swiss banks in the 90s.

    It doesn't surprise me at all that Little Bronfy vants his money.

    Here are some references:

    http://www.forward.com/issues/2002/02.06.07/news6. html [forward.com]
    http://www.davidicke.net/tellthetruth/reststory/br onfmanking.html [davidicke.net]
    http://www.blacksandjews.com/bronfman.html [blacksandjews.com]

  • by moxley (895517) on Friday September 30, 2005 @06:02PM (#13689286)
    I guess they don't consider extortion by big business stealing

    I guess to them stealing is only stealing when it's an individual (usually a minor) who they can then threaten with a lawsuit

    (Isn't that extortion also?,)
  • by PortHaven (242123) on Friday September 30, 2005 @06:19PM (#13689448) Homepage
    How long until Apple simply approaches all of the musical artists and licenses "direct" for digital. RIAA actually has made a mondo mistake. They have licenses to distribute the recordings. Correct.

    However, RIAA has also put much effort into distinguishing "analog" from "digital". Enough so, that a good lawyer could argue a case for the artists that RIAA was not granted the right to collect "digital" royalties.

    (This actually came up with the lawsuits against "web radio" and the creation of a "digital royalties" collection agency.)

    However, it could be pushed by the artists that they are distinct. And they could then license the "digital distribution" exclusively to Apple. Even if the case is lost or held up in court for years of debate. Apple could sign "digital distribution rights" with new bands. Keep the price $0.99 cents and split $0.25-$0.50 with the artist. Artists would see much more profit from Apple's model. While at the same time the record labels would see a loss of revenue. Eventually, the record labels will go bust and Apple will be able to buy their portfolios (just like RIAA did with MP3.com & Napster).

    Touche
  • by bayvult (555108) on Friday September 30, 2005 @06:23PM (#13689480)
    Oops - it was Alanis Morissette's lawyer Ken Hertz [theregister.co.uk], not Warner Music's Michael Nash who made those remarks.

    More interestingly, Hertz is a proponent of blanket licenses [xeni.net]:

    Peer to peer file sharing is really just interactive radio consumers get to listen to exactly what they want when they want it. This demand is not addressed by the record industry. In fact, it cant be offered legally at any price. And as I think Ive illustrated, technology and reality will insure that supply finds its way to meet that demand...

    and

    My partner Fred and I therefor support compulsory blanket licensing. The same way restaurants, radio stations and elevators pay for background music, a tariff on communications technology could permit non-commercial file sharing to flourish, and copyright owners to benefit financially. File sharing is NOT piracy. Piracy is big fat guys manufacturing fake CDs in Mexico and selling them at swap meets. File sharing is tens of millions of music fans swapping copies of things they wouldnt otherwise buy. An ASCAP or BMI like pool of money allocated in an equitable way amongst copyright owners is the only solution that could be of benefit to creators, consumers and copyright owners. Compulsory blanket licensing for non-commercial file sharing is the equivalent of loosening a tourniquet tied around the entertainment industrys neck.
    - ACLU Bill of Rights Dinner - Thursday, December 12, 2002

  • by Infonaut (96956) <infonaut@gmail.com> on Friday September 30, 2005 @07:56PM (#13690274) Homepage Journal
    It seems some of the facts are a bit muddled. The Register posted a similar article which attributed the comment to Warner's Nash. They then issued a correction [theregister.co.uk], stating that the "we'll cut him off" comment was made by Kenneth Hertz, a partner at Goldring Hertz and Lichtenstein LLP. Interestingly enough, GHL represents major recording industry artists, which seems to indicate that the big name artists are still quite happily in bed with the RIAA, all protestations to the contrary.

    I've said it before, and I'll say it again: As long as the big name artists all acquiesce to RIAA control of the music industry, they're complicit. A lot of smaller artists understand that the music industry cartel props up a small number of big name artists at the expense of all other recording artists. Unfortunately these smaller players don't have the clout that the big acts do.

    Millionare recording artists, wake up and smell the coffee! The system that built you up is crumbling at the foundations. It won't be around forever.

    As for the RIAA, the original Reg article indicated that they were feeling full of piss and vinegar supposedly because their profits have been better than expected, and they have a lot of faith in wireless networks to deliver the Next Big Thing in music. Yep, because ringtones are the bellweather of the future and everyone wants to use a cellphone as a music player.

    Morons.

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