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Music Businesses Media The Almighty Buck Apple

Vivendi Calls iTunes Contract Terms "Indecent" 288

Posted by ScuttleMonkey from the better-business-through-greed dept.
Bemopolis writes "Brace yourselves for a shocking revelation: The CEO of Vivendi, parent company of UMG, is not happy with the current deal with the iTunes Store. 'The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.' The usual argument about older music priced at the same rate as new music is trotted out. No doubt UMG would prefer to make the former cheaper, while maintaining the current pricing for the latter. At least he had the decency not to claim that they were trying to defend their artists against predatory iTunes pricing. Or maybe he just misplaced the index card with that boilerplate on it."
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Vivendi Calls iTunes Contract Terms "Indecent" More

Vivendi Calls iTunes Contract Terms "Indecent"

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  • Not quite right, I think (Score:3, Insightful)

    by Calibax ( 151875 ) * on Monday September 24, 2007 @04:24PM (#20734951)
    No doubt UMG would prefer to make the former cheaper, while maintaining the current pricing for the latter.

    (Where former = older music, latter = new music)

    No doubt UMG would prefer to keep the current price for the former, while increasing the price for the latter.

    There, fixed that sentence for you.

    • Re: (Score:3, Insightful)

      by Traxxas ( 20074 )
      UMG is pissed that both old and new music is cheap at iTunes. They want all music to be more expense and new music being the highest priced.

    • Re: (Score:2, Insightful)

      by mrchaotica ( 681592 ) *

      So, how's the view from that sarchasm?

    • Re: (Score:2)

      by john82 ( 68332 )
      It did seem the original statement was not sufficiently greedy to warrant the "We must distance ourselves from those money hoarding scoundrels in Cupertino" comment. And certainly UMG has no intention of giving a greater slice of the pie to the actual songwriters and performers as opposed to UMG management.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      There, fixed that sentence for you.
      Did you completely miss the sarcasm in the summary write-up? It was positively dripping, sir.

    • Re:Not quite right, I think (Score:5, Interesting)

      by Hatta ( 162192 ) on Monday September 24, 2007 @05:10PM (#20735587) Journal
      You know, the best thing to do would increase the price on old music and decrease the price of new music. Give people the new untested stuff for cheap. That will make it easier for new bands to grow and gain mindshare. People are more likely to take risks if it doesn't cost as much.

      Then you charge more for the classics. The market quite simply, will bear a higher price for great classic albums than some new no-name act. People who expect old music to be cheaper are confused. Music doesn't depreciate, it's not electronics.

      • Re: (Score:3, Insightful)

        by jmauro ( 32523 )
        There is actually two types of old music, the "classics" (i.e. Beattles, Sinatra, Rolling Stones, etc) which can command the higher price than the new stuff on iTunes. And the "non-classics" that cannot command a higher price because the market isn't there due to lack of popularity. Most of the songs don't actually fall into the "classics" group, but would probably generate some money if they were priced lower than the new stuff. When talking about the old stuff though the record labels are usually re
      • I heartily disagree.

        New Music that never gets pushed to a mega deal ... becomes "lost" music that no one can ever have, because it's locked away as unsellable, yet a fan can't share it.

        If you think all old songs deserve to be expensive, you obviously haven't listened to Dave Clark's Time album (with Freddy Mercury!).

      • Re:Not quite right, I think (Score:5, Insightful)

        by theurge14 ( 820596 ) on Monday September 24, 2007 @06:37PM (#20736557)
        Music doesn't depreciate, it's not electronics.

        Sure it does. Now that I've heard the Red Hot Chili Peppers "Dani California" on the radio 24/7 for the last 18 months I can't stand to hear it any more.
      • People who expect old music to be cheaper are confused. Music doesn't depreciate, it's not electronics.
        Then I guess those record companies/copyright holders should be paying capital gains taxes on all those back catalogs.

    • Re: (Score:3, Interesting)

      by Technician ( 215283 )

      No doubt UMG would prefer to make the former cheaper, while maintaining the current pricing for the latter.

      (Where former = older music, latter = new music)

      No doubt UMG would prefer to keep the current price for the former, while increasing the price for the latter.

      There, fixed that sentence for you.

      Wistful thinking.. but I was hoping more in the line of "drop DRM, offer multiple formats such as MP3, FLAC, Ogg and WMA
      at high quality for about half the price or less.

      They could clean up the market with

  • Boilerplate (Score:2, Insightful)

    by Bryan Ischo ( 893 ) *
    But Bemopolis clearly didn't misplace his index card with the Slashbot boilerplate for attacking anyone in the music industry for anything that they ever say or do.

    I'm not quite sure what the story is here though. The CEO of a company wants his company to make more money? What a shocker.

    • Re:Boilerplate (Score:5, Insightful)

      by garcia ( 6573 ) on Monday September 24, 2007 @04:40PM (#20735215)
      I'm not quite sure what the story is here though. The CEO of a company wants his company to make more money? What a shocker.

      Then they are free to pay for the hosting, bandwidth and UI design themselves and not have to outsource it to anyone else in the future. I'm sure that they will quickly realize that the initial investment and then continued operating costs would be more than they are paying to Apple.
      • They like crushing the little people. Its probably worth it in their eyes to wrest control over their distribution stream back. However, there more or less screwed as everybody and their grandma have ipods. Switching to WMA or any other drm that is incompatible with ipods would just push more people towards piracy, and, or to bands on labels that stick with Apple.

      • Then they are free to pay for the hosting, bandwidth and UI design themselves and not have to outsource it to anyone else in the future.

        I suspect there is far more to it than cost; his company, as a member of the RIAA, has been and continues to tell people that the internet is evil and will eventually kill the music industry. Right now they are pretending that Apple somehow forced them to sign contracts (which is silly enough), but how on earth could this cherade continue if an RIAA member actually opened up an online store?

      • Re: (Score:3, Insightful)

        by smellsofbikes ( 890263 )
        I doubt that. iTunes made a new business plan viable. Now that it's established, going back and redoing it is comparatively inexpensive, because the risk has already been assumed by Apple. It's not the development that's the problem: it's development without recovering costs that makes companies cry. That's one part of copyright/trademark/patent protection that is probably useful.

        • Re: (Score:3, Insightful)

          by ZachPruckowski ( 918562 )
          Yeah, it's cheaper than it was the first time, but you have to create a cross-platform music player that doesn't suck, come up with a DRM scheme, host a bunch of servers, continually update the store with new music, and support all of this, as well as pay bandwidth costs. Then you have to spend millions advertising it, and convincing people to use it.

          Might be easier than it was the first time, but it's still darn tough. Most online music stores lose money. The reason that iTMS is profitable is the scale
    • It's news when he attacks Apple for doing exactly that, yet calls it indecent...

  • The CEO of Vivendi, parent company of UMG

    Wouldn't GE/NBC be the parent company of the Universal holdings after Vivendi sold 80% to them in 2004?/p.

    • There is "NBC Universal", which is 80% owned by GE (which, in turn, also owns NBC,) and 20% owned by Vivendi, who, in turn, also owns Universal Music Group.

      So, no. Vivendi kept complete control of everything EXCEPT the TV and movie arm, of which they still even own 20% of.

  • Actions speak louder than words (Score:4, Insightful)

    by Paktu ( 1103861 ) on Monday September 24, 2007 @04:29PM (#20735005)
    If Vivendi doesn't like the terms of the contract, no one is forcing them to renew. I don't see what this guy thinks he will accomplish by whining to the press.
    • They're under the impression that they can force Apple to change something. It's just like how every year or so Dell "considers" AMD processors. And after a month they sign a new contract with Intel and save a few bucks.

      And from what I understand about the iTMS, Apple keeps something like $.10 per song, with another $.10 going to pay for the delivery (bandwidth and servers aren't free, no matter how hard I wish they were). And everything else goes to the label, and after that I believe the artist gets a

    • Re: (Score:3, Insightful)

      by ciroknight ( 601098 )
      His customers are forcing him to renew, no way he's going to leave iTunes and it's three-billion-songs-sold. He hopes by whining to the press everyone will throw daggers at Apple for being "too restrictive", when in reality their music still costs about 4 times what it's actually worth and the artists are still only getting about 0.5% of what they should be.

      Luckily, looking at the Apple-NBC ordeal, we know Apple doesn't play those games.

    • I don't see what this guy thinks he will accomplish by whining to the press.
      Potential leverage for next contract, through growing general discontent with iTunes from Big Media?

  • Good (Score:2)

    by LM741N ( 258038 )
    I enjoy seeing these big corporations and trade groups fighting against each other. Only billions of dollars will change the current system. It is too entrenched.

    • Only billions of downloads will change the current system. It is too entrenched.
      Fixed that for you. Change is coming, as much as the current players fight it.

  • Waa, waa.... (Score:2, Insightful)

    by larien ( 5608 )

    At present, UMG, the world's largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said
    So they get 70 Euro cents for every song for zero marginal cost. They get over 70% of the sale price, leaving the remaining At least on a physical CD, they had the excuse of printing, transit, etc, etc to cover, but with this they just get a cheque every month for sitting on their backsides and doing sod all.

    • Re:Waa, waa.... (Score:5, Insightful)

      by larien ( 5608 ) on Monday September 24, 2007 @04:36PM (#20735141) Homepage Journal
      Crap, just re-read what I typed; forgot to escape the "less than". Supposed to read:

      So they get 70 Euro cents for every song for zero marginal cost. They get over 70% of the sale price, leaving the remaining <30% to cover costs plus a profit for Apple.

      At least on a physical CD, they had the excuse of printing, transit, etc, etc to cover, but with this they just get a cheque every month for sitting on their backsides and doing sod all.

      • Re:Waa, waa.... (Score:5, Insightful)

        by no_opinion ( 148098 ) on Monday September 24, 2007 @05:20PM (#20735725)
        You're looking at it the wrong way : the labels are like venture capital for musicians. They have to cover their up-front artist payment, marketing, music production (e.g. producers like the Neptunes who bill at 100K per finished minute of music), music video production, fulfillment systems, etc., in addition to the distribution cost. The cost to send the file is not what they're trying to recoup.

        • Re: (Score:3, Interesting)

          by timeOday ( 582209 )

          You're looking at it the wrong way : the labels are like venture capital for musicians.

          If publishing music is such a competitive, high risk, low-profit business, why do the same old companies and individuals run it year after year? When I see an industry where nobody ever goes out of business, I get a little worried. Being a band, for instance, is clearly hugely competitive and risky, they come and go almost week to week. Jack Valenti made more than any of them, what risks did he take and what unique t

        • Re: (Score:3, Funny)

          by swillden ( 191260 ) *

          They have to cover their up-front artist payment, marketing, music production (e.g. producers like the Neptunes who bill at 100K per finished minute of music), music video production, fulfillment systems, etc., in addition to the distribution cost. The cost to send the file is not what they're trying to recoup.

          Don't forget the blow... lots and lots of blow. Some of it is even for the musicians.

    • Someone has to count all that money.

  • Print link (Score:4, Informative)

    by Seakip18 ( 1106315 ) on Monday September 24, 2007 @04:32PM (#20735063) Journal
    Print link [reuters.com] for those wishing to skip the ads.

    This looks like a case where a company is calling foul on a distributor. In a way, I guess Itunes is like walmart. If you want your music to sell online, you do it thru itunes. If not, you find your own way. Perhaps by not killing online radio.

  • Incompetance or greed? (Score:5, Insightful)

    by Anonymous Coward on Monday September 24, 2007 @04:32PM (#20735065)
    Silly question, but if the contract terms are unfair to UMG, then why the hell did they agree to them ?

    • Probably covetousness. (Score:5, Interesting)

      by Trillan ( 597339 ) on Monday September 24, 2007 @04:35PM (#20735129) Homepage Journal
      They probably prediced the store to do about 10% of the sales they're actually doing, and thought Apple's profits seemed fair at that level. But the bigger pie only made them want a relatively larger piece.
    • I am certainly not a friend of the music industry, but in this case I would have to say that it is probably not greed (they want to be able to charge less for old songs and 99 cents for new ones). However, they certainly were incompetent to wait so long to get on the digital music train and now they are paying the price for their lack of vision while Apple is garnering a larger share of the profits than they might otherwise have gotten had circumstances been different and the music industry hadn't dragged t

  • I don't get it... (Score:5, Funny)

    by maccam ( 967469 ) on Monday September 24, 2007 @04:35PM (#20735125)
    ...how can a company (UMG) that gets money for nothing be in such dire straits?

    • ...how can a company (UMG) that gets money for nothing be in such dire straits?
      Because the band has access to drugs??

    • Re: (Score:2)

      by p0tat03 ( 985078 )
      What a dumb question, don't you know how much it costs to be sultans of swing?

    • Re:I don't get it... (Score:5, Funny)

      by _Quinn ( 44979 ) on Monday September 24, 2007 @04:58PM (#20735439)
      Turns out that chicks aren't free.

    • Re:I don't get it... (Score:5, Funny)

      by Anonymous Coward on Monday September 24, 2007 @05:00PM (#20735465)
      Because of Steve Jobs. The Man's Too Strong and refuses to be Brothers in Arms to screw consumers. Once Upon a Time in the West, the music industry made money by controlling the distribution, but the Internet makes it One World and people from all Walk of Life can easily download songs for free. Jobs became the Angel of Mercy by opening iTunes Store and converting file sharer into paying customers. He asked the executives "Where Do You Think You're Going? Your Latest Trick doesn't work with the consumers anymore. You and Your Friend must offer music at a compelling price and a reasonable DRM." But the greedy executives issued a Communique calling consumers and iPod owners pirates and thieves. They prefer screwing consumers in their Tunnel of Love and stabbing iTunes in the back with a Six Blade Knife to making honest bucks.

      That's how!

  • Sounds familiar... (Score:5, Insightful)

    by johnny cashed ( 590023 ) on Monday September 24, 2007 @04:37PM (#20735161) Homepage
    'The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.'

    Substitute "producers" for Apple and "artists" (musicians) for "producers".

  • I agree with them... (Score:3, Insightful)

    by Spy der Mann ( 805235 ) <spydermann.slash ... com minus distro> on Monday September 24, 2007 @04:38PM (#20735177) Homepage Journal
    The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.

    I agree. Music PRODUCERS (this is, the artists, and not the greedy intermediaries) should get more share :)

    Strange curiosity: Today's captcha is "authors"

  • 71/29 split indecent? (Score:5, Insightful)

    by frdmfghtr ( 603968 ) on Monday September 24, 2007 @04:39PM (#20735197)
    FTA:

    At present, UMG, the world's largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.
    My math puts that at 71% for UMG, 29% Apple.

    I'm split on this one:

    (1) If you think of it in terms of traditional retail, Apple is applying a 41% (.29 retail/.70 wholesale) markup. That sounds like a hefty markup at first, until you figure in Apple's cost of storage and delivery. While there is no "storage" and "delivery" in the traditional brick and mortar store sense, there is still server storage and bandwidth costs. I wonder what Apple's true costs (costs to music producers and IT costs to run iTMS) are on a per-track basis. Know that, and you can get a better grasp on the actual profit margin.

    (2) If the deal is so bad for the producers, why did they go in on the deal in the first place?

    The second point is more rhetorical, but the first one I think bears further study before deciding if the markup is excessive. Of course, getting Apple's per-track expenses will be damn near impossible so we'll have to settle for speculation and conjecture. :)

    • Re: (Score:3, Insightful)

      by TheRaven64 ( 641858 )
      I don't know what it's like for CDs, but for books a 41% retail markup is pretty low. Once you realise that they are also doing the duplication etc. it gets even lower.

      • I don't know what it's like for CDs, but for books a 41% retail markup is pretty low.

        True enough but the markup is only part of the picture. What's more important is the gross margin [wikipedia.org] of the company. In the retail book/CD industry gross margins are around [yahoo.com] 20% [yahoo.com] which is pretty crappy compared to most industries. Only way to make any real money is with huge scale (i.e. Amazon) because the margins are so bad.

        Basically all the money in music is taken by the labels/RIAA-members and in some cases device manufact

    • The record industry gets a lower net percentage with CDs, the thing is that CDs represent larger chunks of money.

  • Pot Kettle Black? (Score:5, Funny)

    by EasyT ( 749945 ) on Monday September 24, 2007 @04:40PM (#20735217) Journal
    Having a music label (or CEO of a company that owns said music label) complain that someone else's contract terms are indecent is hilarious. It's like a nudist calling someone else underdressed.

    This is the most entertaining news I've read all day! Thank you, submitter.

    • Re: (Score:2)

      by Alsee ( 515537 )
      It's like a nudist calling someone else underdressed.

      Ewwww! Gross!
      Put your skin back on!

      -

  • In my opinion... (Score:5, Insightful)

    by PJ1216 ( 1063738 ) * on Monday September 24, 2007 @04:44PM (#20735279)
    iTunes is pretty decent. Yea people can complain about the media not working on the iPod, but I have an iPod (whether or not you think its the best or worst). But when it comes down to pricing, $.99 for a song isn't half bad. Some people may argue for lower prices, but when it comes down to it, its cheaper than some candy bars and honestly, I get more enjoyment from a song than a candy bar. Sometimes they price new albums somewhat high, especially if they don't have a lot of tracks. It's always nice to see like a 16 track album going for $9.99 (price of 10 & 1/11 songs). (Now, if only eBook stores would do similar pricing, that'd be awesome.) Digital media SHOULD be a HELL of a lot more inexpensive than the physical media. iTunes does the distribution, storage, and virtually everything else involved with selling those songs. The record labels AREN'T DOING ANYTHING anymore. They don't have a right to the lion's share of the profit. Beyond that, they sell the music licenses to Apple, so Apple should be able to charge whatever they want. If Apple wants to charge more, its their right (though it'd be a bad move) and it's also their right to keep the rest of the profit. Now, chances are, the profits are probably in percentages and not flat dollar values and that's probably what is pissing the record labels off... Apple is selling them cheaply, so they're not making as much money. Apple isn't really making that much money off of iTunes either, so the labels shouldn't complain.
  • See if people will buy an $3 single from UMG when there are $1 singles of similar popularity available from other labels and $5 DRM-free albums available from CD Baby. In fact, let iTunes Suggest feature find similar, cheaper music when the user selects a song. They will be begging for old single price model in no time.
  • My understanding is that Vivendi (who is behind Universal and NBC Universal's position on iTunes) wants "differentiated pricing" so they can better "monitize" artists--and for certain hits they want the right to charge $2.49 per song rather than $.99 per song. $2.49 translates (for a 12-song album) into around $30 for a CD.

    Are you prepared to pay $30 for a music CD?

    • Re: (Score:3, Interesting)

      by sl3xd ( 111641 ) *
      Are you prepared to pay $30 for a music CD?

      I'm much more willing to pay $30 for an 'uncompressed' DRM-free CD than I am to pay $30 for a compressed DRM-laden CD. That's a moot point, since I wouldn't pay that much for either.

      I don't think these geniuses realize that music doesn't have the entertainment monopoly they enjoyed a century ago. People like to enjoy recordings of TV, and we have DVD's. We also have these newfangled 'video games'. There's a lot more competition than the local theater troupe and

    • Re: (Score:2)

      by adisakp ( 705706 )
      $2.49 translates (for a 12-song album) into around $30 for a CD. Are you prepared to pay $30 for a music CD?

      The better question is are you willing to pay $30 for the *MUSIC* on a CD without any of the positives (uncompressed data format, physical media, liner notes, widely available sales outlets, etc) and with the negativity of DRM-restricted content, lossy data compression with lower data rates, and limited points of sales distribution?

  • Only Fair (Score:2, Interesting)

    by pete-classic ( 75983 )
    It would only be fair for Vivendi to give Apple the same percentage cut that they accept from the recording artists. Presumably that's less than the 30% that Apple is taking.

    -Peter

    PS: Please read twice before moderating. There may be lurking sarcasm.

  • Indecent (Score:5, Insightful)

    by whisper_jeff ( 680366 ) on Monday September 24, 2007 @04:59PM (#20735453)
    I'd love to see how much of that 70% makes its way to the artists. Perhaps Vivendi misunderstood where the "indecent" portion of the financial split exists...
    • I'd love to see how much of that 70% makes its way to the artists. Perhaps Vivendi misunderstood where the "indecent" portion of the financial split exists...

      That depends on who the artist is. If it's The Rolling Stones it's likely 20% of that. If it's somebody new like AFI it's likely 5%.

    • Actually... (Score:5, Interesting)

      by Newer Guy ( 520108 ) on Monday September 24, 2007 @06:12PM (#20736323)
      The artist gets 7 cents of every song sold-it comes out of Apple's 'cut'.

      The credit card companies get 7 cents out of every song sold-it comes out of Apple's 'cut'.

      Apple gets 15 cents out of every song sold and out of that they have to pay for bandwidth, web design and 1001 other things. Apple gets the smallest 'cut' of all. They claim they only break even on iTunes; that it exists to benefit the iPod-which is their big cash cow. Of course the record companies are ALSO botching abiut that-they want a 'cut' on every iPod sold!

      Greedy bastards!

  • Maybe it's just me... (Score:3)

    by rk ( 6314 ) on Monday September 24, 2007 @05:03PM (#20735503) Journal

    But anyone who uses the word "monetize" (in any of its conjugations) in a non-ironic manner should never be allowed anywhere near the channels between artist and audience. Go sell chewing gum or razor blades instead.

    • Go sell chewing gum or razor blades instead.

      Chewing gum with razor blades in it? That's some synergistic monetizing right there, baby. The Wrigley's and Gilette business models in one neat package. Somebody get my VC on the phone.

  • Differential pricing... (Score:3, Insightful)

    by Hamster Lover ( 558288 ) * on Monday September 24, 2007 @05:24PM (#20735753) Journal
    I don't disagree with the premise that older music could or should be priced differently from newer music. One would expect that with older music the costs of production and distribution have been largely recouped. Of course, to me that means that older songs should be priced from 25 cents to 75 cents and new music remain at the one dollar level.

    I doubt UMG/Vivendi shares my pricing philosophy, however. Differential pricing to them is just a lever they want to use to rationalize higher prices.

  • 70-30 Split (Score:3, Insightful)

    by Nom du Keyboard ( 633989 ) on Monday September 24, 2007 @05:31PM (#20735853)

    At present, UMG, the world's largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.

    So UMG gets the fat side of a 70/30 split, and all they have to do is sit on their asses and cash the checks -- and they don't think this is good enough!

    And why don't I see them running their own music stores? Because they don't know how to do it profitably. All they know how to do is whine, complain, and demand more money for things they are incapable of ever accomplishing on their own. If there was ever a reason for Big Music to crash and burn, this is it!

    Music existed before the music companies, and it will exist after they're gone. With the Internet, artists -- especially the vast hoard of unsigned artists -- don't need Big Music to get their music out. For every big name you've heard of that was signed by the record companies, a thousand others were passed over, and it wasn't because they weren't good enough too. If you want fairness and a level playing field for music, that's what's happening now, and Big Music is terrified. As for those precious recording contracts, you'll have a better chance of hitting it big buying lottery tickets!

    • Out of Apple's *split*, the artists get 7 cents and the credit card companies get another 7 cents. The 15 cents laft goes to Apple who have to pay for bandwidth, servers, web design and a bunch of other things from their cut. The record companies get 70 cents for doing NOTHING!!

      Apple has stated in the past that iTunes is a break even for them-it's only reason for existance is to promote the iPod. Of course, the record companies also want a *cut* of each iPod sold, too!

  • Dear Mr Vivendi - The technology exists to make a competitive product to itunes for reasonable cost. You're welcome to compete against itunes. Before you go and try to compete, there is a reason why itunes is successful and I suggest that by the time you get it, you'll understand that unless you compete on price you're going nowhere fast. The only way to make more money really is to produce more music that people want to buy (WHAT A CONCEPT).

  • According to Vivendi, they pull in ~$0.70 per song, while apple pulls in around $0.29 a song (well, TFA cites euros -- but I'd wager that the margins in USD sales are identical). I wonder how different that is from the model of physical distribution. I'll bet that the IP owners make more on the CD. It probably costs less than $0.40 to press a polycarbonate CD (total guess w/ nothing to back my numbers up), presuming that you're doing more than 5000 at a time. Add in another buck for packaging, and anoth

    • Re: (Score:3, Informative)

      by shark72 ( 702619 )

      "According to Vivendi, they pull in ~$0.70 per song, while apple pulls in around $0.29 a song (well, TFA cites euros -- but I'd wager that the margins in USD sales are identical). I wonder how different that is from the model of physical distribution."

      That's Vivendi's point: they resent the fact that Apple charges a much higher markup than typical retailers. Target and Amazon (the #1 and #2 music retailers in the US; iTunes is #3) make about 15% margin -- half of the iTunes markup.

      "I'll bet that the

  • Because they only get *over* 70 cents of every dollar spent for doing NOTHING? Maybe they want the 7 cents each artist gets too? Or perhaps the 7 cents that Mastercard gets? I know-they want ALL of the NOTHING profit that iTunes makes on each song sold! What they really want is to force iTunes to charge 1.49 with them getting 1.20 for doing NOTHING! Problem is, raising prices would actually REDUCE their profits. Look, so far they've made almost ONE BILLION DOLLARS for doing NOTHING! That's not enough???!!!

  • How Apple Should Respond (Score:3, Insightful)

    by rossz ( 67331 ) <ogreNO@SPAMgeekbiker.net> on Monday September 24, 2007 @05:57PM (#20736177) Journal
    "Ok, we'll do a contract based on the contracts you force upon the artist. You'll get 5%, except we're going to use magic bookkeeping to guarantee that you will always owe us money, no matter how well the music sells. That's right, this time you are the bitch."

    Alternately, tell them they get an amount exactly equal to what the artists receive, with auditing of the music industry books to verify the money is actually paid. Hell, offer them twice the amount the artist gets. They still won't go for it because they wouldn't want their books audited.
  • Our contracts give too good a share to Apple.

    Who the fuck cares. They're contracts. You signed them.
  • Good luck with getting me to pay $2.99 for music I'm not even willing to download for free.
  • In the immortal words of Duke Nukem and John Carmack,

    "Suck it down."

    This is what they get for shunning the online market and failing to see the opportunity to create their own system.

  • Try Being A User (Score:3, Funny)

    by nick_davison ( 217681 ) on Monday September 24, 2007 @07:04PM (#20736797)
    Vivendi Calls iTunes Contract Terms "Indecent"? You should see what they ask of their users:

    10. Export Control. ...You also agree that you will not use these products for any purposes... including, without limitation, the development, design, manufacture or production of missiles, or nuclear, chemical or biological weapons.
    iTunes Contract - PDF [apple.com]

    Which completely screws with my plan to have bitching tunes blasting from my spinner-equipped nuclear missile.

  • Universal is out for Apple (Score:3, Interesting)

    by plazman30 ( 531348 ) on Monday September 24, 2007 @08:28PM (#20737371) Homepage
    For years the record labels controlled the music business. They even had a firm grip on the record stores. And now, the tables are turned slightly. Apple is able to call at least some of the shots, and Universal hates it!

    And Universal is very scared also. People hop on iTunes and buy music. iTunes tells them what the top sellers are. Heck, they grab podcasts instead of listening to radios. For a lot of people, iTunes is becoming their only interface to music. Soon the record label will be forgotten and iTunes will be remembered.

    That's what Apple is hoping for. I really think they're planning to remake the record industry. I guarantee you that software is already done that goes directly from GarageBand or Logic Studio straight to the iTMS. No record label needed anymore.

    The future of music doesn't involve record label. Record Labels were f*cked as soon as the CD-R came out.

    Andy
  • to see Apple just dump Vivendi!

    It would make my day.

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