Digital competitors are ready to take bite out of Apple. “That is the message to Apple Computer CEO Steve Jobs from almost every other company in the digital music space vying for consumer attention after several years of domination by the iPod and iTunes,” The Arab Times reports. “Apple’s successful combination of sexy design and elegant usability has propelled the iPod to the top of the digital music market as the undisputed king.”
“Every move Apple makes these days results in victory. As the rest of the flash-player market floundered, Apple took over the category in a day with the release of the iPod Shuffle. It turned podcasting from a cool-sounding technology that nobody used to a legitimate format by adding it to the new version of iTunes — and generating 2 million subscriptions in less than a week,” The Arab Times reports. “Today, Apple commands 80 percent of the MP3 player market and 75 percent of online music sales. But even as analysts predict another massive holiday sales season for the company this year, many believe Apple’s reign will last only another 12-18 months before the playing field levels out. ‘It’s inevitable that over time their market share declines,’ Piper Jaffray senior research analyst Gene Munster says. ‘It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.'”
“Privately, record company executives say they can’t wait. Not because they want to see Apple stumble, but because a less dominant Apple means a more robust market for digital music. The company by itself cannot bring digital music to account for 25 percent of all music sales, as labels hope it will by 2009,” The Arab Times reports. “Label sources say Apple stubbornly disregards their suggestions for drawing in new digital music customers. They say they would like more flexibility on track pricing and promotions. But more than anything, labels want to see the iPod become interoperable with music services other than iTunes. ‘It’s a monologue with them,’ one label executive who asked not to be identified says. ‘They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot. It’s like dealing with a cult.'”
Full article here.
The “monologue” and “cult” comments come directly from the standard anti-Apple talking points memo that’s been circulating for years. That’s about as creative as music label executives can get, which should tell you that they ought to listen to Apple’s “monologue” for as long as they can. Apple showed them the way, yet inexplicably, some of these music executives can’t wait to bend over and grab their ankles for Microsoft. Why?
Most likely, the music label execs are trying to knock Apple down a peg or two or three and split the online market up between multiple successful distribution points. After all, if Apple ends up owning the online market with iTunes Music Store, who would need the labels? Apple could buy The Beatles’ pesky Apple Corps to remove that issue and artists could eventually go straight to Apple and eliminate the middlemen. This is why the middlemen are biting Apple these days.
The music-buying public worldwide have shown they would rather wait for the iTunes Music Store to open in their country, than use existing services. Labels can hope for consumers’ habits to change, but in the end the public will vote with their wallets.
…..’They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot.'”
Well, if the shoe fits……
And dealing with Music Execs is like dealing with pimps, what’s there point?
‘…It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.'”
Somebody should save this quote and email it back to Piper Jaffray on a daily basis after it officially becomes bulls**t…
The labels are simply scared because their old monopoly over both the marketplace and the artists themselves is slowly eroding. It will be a sweet day when their house comes crumbling down and it’s going to happen sooner rather than later at this rate.
And, not to forget, what they really want is to make more money on the expense of the customers; i.e. they want to charge more per song than Apple allows them to. That is often the truth about the strive for competition: it is not for the benefit of the customers but for the big stockholders who want more and forever more. If one player on the market is becoming big, it doesn’t harm them, as long as that player go along with their desires, but when one like Apple stubbronly says: nope, we’re only going to charge 99 c per song and that’s final, they don’t like it very much. They know that Microsoft wouldn’t have said so. They would probably have gone along as long as they could get their (un)fair share of it.
“They say they would like more flexibility on track pricing and promotions.”
By flexible, they mean more expensive and by promotions…well, I don’t know what they mean, but it better NOT be ads all over the iTMS.
Hey dictators and monopolists are the first to complain when they don’t get their way. They simply arn’t used to having to take others views into consideration let alone take orders.
I’m still trying to figure out how the other MP3 player makers – who have such a paltry share of the market – will catch up in 12 to 18 months.
As for the music industry, they’re a lost cause… they’re killing themselves.
I used to think that labels would always be needed as buffers and editors. I mean, I’d rather listen to any band that’s signed than the assortment of crap that was, for example, mp3.com. But now with blogs and social software like del.icio.us, I see that labels are superfluous.
If following Apple means no viruses and worms, then show me to the alter.
“Label sources say Apple stubbornly disregards their suggestions for drawing in new digital music customers. They say they would like more flexibility on track pricing and promotions.
Yes they want to charge more so it chokes the goose who lays the golden egss
But more than anything, labels want to see the iPod become interoperable with music services other than iTunes. ‘It’s a monologue with them,’ one label executive who asked not to be identified says.
How about some other company design a iPod killer and then they can lock their DRM to their device?
Music makes no money for Apple, just for the Labels, so they don’t have any play. We will go back to P2P or All of MP3.com
‘They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot. It’s like dealing with a cult.'”
And how does M$ treat them? It’s our way or else and pay us more money.
At least Apple is making the Labels money, it only has the online sales and only a tiny portion of the total download market. P2P still rules the roost.
And actually the Labels are idiots, greedy idiots at that. But they still have the majority of music sales going to them.
And Apple is a cult, it’s a cult of very intelligent and creative innovators who make the very best products possible.
I don’t see anyone else generating as much excitement and getting people to buy music like Apple is.
” and if you disagree with them you’re an idiot. It’s like dealing with a cult”
Is he talking about Apple or it’s most enthusiastic “supporters”?…
Anyway, to me, until iTMS offers lossless material for the same price, it’s much ado about nothing.
Spyinthesky, I hate to say this but I just can’t see if you’re talking about the record companies or about Apple because that’s what Apple is doing with the record companies.
But don’t get me wrong, I’m glad Apple is doing this. ”More flexibility on track pricing” is a scary thought. Apple is the good guy in this by not getting bullied by the record companies. Yet, when you think about it, Apple is the one with more of the power, with 75% of the download market taken by iTunes and 80% of players being iPods. Loosing that would be suicide for the record industry… which, when you think about it, wouldn’t be such a bad idea.
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“… one label executive who asked not to be identified says. ‘They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot …”
They are idiots.
The major labels were all sitting around with their thumbs up their collective asses until Apple provided The Total Solution® to their ‘Digital Download Dilemma’. Now that Apple is kicking ass and taking names, they are saying that they, “… don’t want Apple to control a major portion of the download market …”??? What assholes.
Apple has done all the hard work and paved the way to make it easy for the labels to make money on digital downloads. The only reason that they don’t like Apple is because Steve plays ‘hardball’ with them and refuses to give them all of Apple’s profits. Honestly, why should Steve grab his ankles and raise prices just because they say so?
There would be no money (or very little) in it for the labels if it weren’t for all the hard work Apple has done. The major label executives should lick Steve’s ass and thank him for the privilege.
These guys are starting to get big over in London. They currently deliver their stuff as MP3 so it’s iPod compatible for those interested.
If only more artists would do this, and more people buy rather than steal the music, we wouldn’t need the labels or DRM at all.
Wishful thinking I know….
“Is he talking about Apple or it’s most enthusiastic “supporters”?…”
He’s referring to Apple.
The MDN take in this case fails to understand what music labels actually do. Apple are not going to start giving unknown talent money to spend in recording studios or subsidise tours, etc, etc. While bands remain unwilling or unable to spend thousands in the studio, and happy to sign their life away for cash now, there will be labels.
Oh, I forget, they’ll be able to do everything at home on Garageband.
“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.: -HST, RIP
No one says it better than the good Ol’ Doctor.
And dealing with Music Execs is like dealing with pimps, what’s there point?
—
So let me get this straight.. Apple figured out how to beat the p2p networks.. and the Record Companies are still skeptical..?
Apple owns digital media, and the Record Companies don’t see the value in retaining that partnership? WTF?
Yes. It’s the cult of the majority.
Under normal circumstances called popular opinion.
End of argument.
Stay with it Apple.
The record execs have been hanging out with the cell carriers too much … feeding off each other … “customers pay $2 for ringtones, they will pay at least that for a full song” … I’m sure you will get arrested for what they are smoking.
Simply pure greed … especially since the labels get most of the ITMS revenue already.
As many have said already … don’t harm the golden goose.
While we may think ITMS is the defacto standard, I don’t think it will be considered so until downloads are a much larger portion of music purchases (about 2-3% currently).
The major problem with Microsoft and their own solution DRM/WMA is that it is not cross-platform friendly (while maintaining tight control of the Windows monopoly), making it unfriendly to consumers and their wallets.
The core comment for me was the one about pricing. The labels want to start sticking it to consumers again like they have been for years. They just don’t realize that that would be killing the golden goose. People buy from ITMS because it is worth a buck a song for them and most people basically want to be honest. If they start charging more tho, a lot of people buying from ITMS now will go right back to piracy.
I for one would love to see Apple turn the sucess thay have had with iTunes and iPods to the desktop and portable areas of their business.
And…I have been using apple computers since 1978 and the Mac since 1984; there have always been articles and predictions that Apple would go under “soon” or “in XXX months.”
Apple is still here and a lot of old timers like myself are still with them. Call it a cult or whatever.
People tell me how great Windows and such is and I tell them that “I have been using Apple computers since 1978…what the hell have you been using since 1978, sonny?”
Apple has 70-80% market share and THEY have not abused it by raising prices or decreasing services to earn more profit. Apple has continued to expand and offer more to THE CUSTOMER. The record labels truly are the most contemptuous of any business. They always have been. They make nothing and find the most vile ways to exploit the artist. And hide royalties from the artist to line their own pockets.
Us music folks just want to make music (it’s why we have been exploited of the years by labels), but we are ever so slowly moving away from the major labels. ITMS allows this. And say what you want about Steve Jobs, he has more respect for music people than any record label. But again, intellectual property he does understand. No talented music people become record label executives.
Hang tough Apple. Allow the record labels truly destroy themselves. A 10% price increase on the ITMS will translate into a 35% jump in p2p downloads. AT least 35%.
I agree with MDN’s take on the fact that Apple could end up eliminating record labels. I also believe this is their strategy. They have focused on music from the beginning and have put in place software, hardware, distribution, ect.- all necessary items to become a “Recording Studio”
Think different. Wouldn’t the artists make more money if they adopted this new form of distribution?
All music should be banned. Music is mental dope.
Lets bring this down to the numbers. The iTMS has sold more than 500,000,000 (that’s 5 hundred million) songs world-wide. At an average of ten tracks per album, that’s 50 million cds. How many million CDs were the record company not selling during the P2P days when that’s all there were?
Most CDs here in Canada cost $15-$17. That $750 million that the iTMS has sold in two years (or so). Not a small chuck of change for the record companies, even if they don’t get it all. Not bad for the once ‘beleagered’ Apple.
MW=’amount’ as in ‘What amount of CDs would they have sold without iTMS?
[I]Label sources say Apple stubbornly disregards their suggestions for drawing in new digital music customers. They say they would like more flexibility on track pricing and promotions…[/I]
So, before iTMS, how had the Music Industry’s combined intelligence fared in creating a digital music market?? Not so well as far as I remember.
But surely Sony/BMG are closely related to Sony’s CONNECT service, so presumably the music industry could experiment on its own turf. But then again, nobody goes to CONNECT so there’s probably no point. And let’s face it – The Industry would like Apple to continue taking all the risks whilst they take all the proceeds, so that’ll never happen.
And what I don’t understand here is the lack of consistency: at the turn of the year, an IFPI report claimed that the music industry was delighted at the growth of digital music and since then Apple has increased the rate of sales by nearly 100%. Where is Napster’s equivalent contribution to the growth of digital music, or Microsoft’s. Let’s be a little closer to home, where is Sony’s contribution.
The arrogance of these people is truly staggering and it’s hardly surprising that some Japanese artists are breaking ranks with their labels when they are displaying such breathtaing stupidity.
Well I look at it this way, I hate record labels but I love Apple. I love the iTMS, and I love being able to buy a song from the confort of my living room for $1 a song or $10 an album. I dont need bulky CD’s, cases, and other crap piling around my house. I can click, own, transfer to iPod, listen.
FRAK the labels, I will be glad when they are all finally gone. Just think of all the new music we will get to hear with the labels not choosing who we think will be good or not, I like choice, and Apple gives that to us. Bring on the new artists of tomorrow Apple and let me check em out for a $1!
Long live Apple, I love my cult
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P.S. Hey music labels, I will never buy a CD again, you cant stop that no matter what you do, you no longer get my money, so give up.
To: iDon’t
Maybe you should!
The Taliban banned music and look what happened to them.
Sing along now! Hey Mister Taliban ban Bananarama!
Macaday –
Careful. If popular opinion is right, then Windows is the desktop OS to use.
MDN are right, the labels are afraid of losing their control.
I am also a Windows XP user (for years I’ve used Windows 95/98/2000) who will soon be buying my first Mac with Mac OS X Tiger!
I am SOOOOOO ready and psyched about the switch!
Even though I can afford to buy more music than ever before, I choose not to do it. I am tired of hearing the same trollish whinging from the record companies. They wonder why sales are down? Tell me why I should spend $20 on non-redbook compliant CDs? I’ll buy used when I can, and new when I want. Discounted is preferable.
The hubris of these companies is appalling, and their greed is astounding. They certainly have products that I want to purchase, but it is not a need by any means. Perhaps they forget this.
While iTMS may never replace the record label, it very well may be a catalyst for changing the way artists can be discovered and appreciated. It may even give some of the artists wider exposure that normally have been passed over by the music industry.
This will put more music choices into the hands of the consumers, and be disruptive to an industry that requires mega-hit songs. Because of their reliance on this business model, and their belief that every negotiation is a zero-sum-game, they choose to attack Apple’s success. It is really their PR games over the past few years that lead me to believe that distruption is coming to this industry.
Whatever happens, without ‘pricing flexibility’ that is favorable to me, I will be providing little additional money to the record companies.
PC Apologist:
Windows didn’t become the dominant OS because of popular opinion.
Windows broke the rules to become as ubiquitous as they are. They didn’t have many competitors which allowed them to corner the market,
and the public didn’t have any other choice, until the public is locked down to their technology.
Anybody old enough remembers The Dave Clark Five. Well, during the early ’70s Dave Clark went to his producer and bought all the rights to his music for $50,000. At the time, the number of people playing oldies was very small.
Anyway, Dave Clark has since been quoted as saying that purchase was the best thing he ever made. He doesn’t share radio station royalties with the label anymore (not for 30 years) and has made a fortune.
Now that’ws before the advent of digital music. Imagine what happens as more and more artists discover that they only need the labels to establish their brand (music). Once its established, they no longer need the labels to keep the money rolling in.
Kind of like the relationship between Disney and Pixar. In the beginning, Pixar needed Disney very much and agreed to a very lopsided distribution deal. Now the tables have turned and it is Disney that needs Pixar.
I don’t think the label execs want more money for themselves. They want more for the artists, in order to keep them for bolting directly to iTMS.
Let me give you folks a little insight into how a record company works – and how they totally rob all of their artists.
First, the record company decides which studio you will record in and which producer you will use – and they pay for it up front. They then pay to have the CD reproduced and all of the subsequent marketing.
However, once the CD is released, you must pay the studio back for ALL of the costs incurred in producing the CD (studio, engineer, producer, etc.) as well as all of the marketing costs. So, in other words, if it cost $100,000 to do your record, before it even hits the streets you are in debt to the record company for $100K. On top of that, the record company will demand a certain percentage of your publishing rights (if not all of them – see John Fogerty). They will also demand a percentage of your touring ticket sales, merchandise, etc.
All of these costs are incurred for one reason – so you can get radio play and mass media attention.
When it comes right down to it, the record companies are no more than legalized loan sharks – and legalized extortionists (see the term payola).
With the advent of digital products, IMHO, it will not be very long before record companies are put out of business – which would be the best thing to ever happen to music and musicians.
Any band starting out today would be wise to learn ProTools, record the album themselves, have it reproduced by any number of CD dupe houses (at roughly $1.10 per CD – based on 1000) and use the internet as much as possible to promote themselves. Not only do they save money up front, but they will always own ALL of the rights to their music and any licensing fees will be paid directly to them – not the mafia record companies.
Can ya tell I gots no love for the record companies? LOL!
Chris: Great post – you’re absolutely right, and your information makes the previous post by JulesLt look even more ridiculous than it already seemed.
JulesLt says: “The MDN take in this case fails to understand what music labels actually do. Apple are not going to start giving unknown talent money to spend in recording studios or subsidise tours, etc, etc. While bands remain unwilling or unable to spend thousands in the studio, and happy to sign their life away for cash now, there will be labels. Oh, I forget, they’ll be able to do everything at home on Garageband.”
Frankly, I think this is exactly why Apple released Garageband. I’m not a musician, but friends have mine who have used it say that app singlehandedly turns the whole process of recording distributable quality music on it’s head. If you’ve got the musical will, Garageband gives you the affordable way. And if Apple starts signing independent acts and distributing them directly over iTMS … well, it clearly will be the end of ‘the way we’ve always done it’.
I love the way things look on the audio side of things right now. Although Apple acting as gatekeeper could be a double edged sword (trading one monopoly power for another), because the whole structure is software based, the consumers AND producers of music can find any number of ways to ‘fight the power’ if they have to. I just hope the upcoming hardware based TPM modules of the future Macintels don’t tip the whole thing back in favor of monopoly power. There’s really no garauntee Apple will always do what’s best for the consumer, or worse that they will always be in the driver’s seat.
As Revenge of the Sith & The Empire Strikes Back demonstrated, you never know when an evil overlord will reassert itself … or even if it will be someone you never expected!
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The labels complain about Apple, saying “and if you disagree with them you’re an idiot.”
Is there any evidence to suggest that the labels are not idiots ?
Left to their own devices, the labels managed to let single sales slide to pathetic proportions, they created a situation where P2P flourished and when Apple offered a brilliant solution to those problems they try to mess it up because they don’t understand the technology, the economics or their customers.
If anything, the word ‘idiot’ is too polite.
P2P was growing out of control. The only response that the labels could devise was to sue individuals. That raised very little income, cost a lot in legal fees and generated huge adverse publicity.
Apple’s solution was to make the process of downloading music so cheap and simple that it wasn’t worth messing with the alternatives.
People don’t photocopy entire newspapers, it’s easier to buy another and the cost isn’t going to put you off. It’s the same with iTMS.
All the labels have to do is to provide the audio file and Apple does the rest. The labels have no investment, no overheads, no effort and yet they still get 90% of the income to share between themselves and the artists.
That sounds like a very advantageous deal to me, but the labels are too stupid to see it that way.
The ‘experts’ say that Apple can’t cling onto an 80% market share for more than 3 years.
Maybe it will be the labels who can’t continue as they currently do for three more years.
Dinosaurs might have once been huge and powerful, but they had tiny brains and weren’t able to compete with more versatile, intelligent and fleet-footed mammals.
It might end up that the labels decide to attack Apple. By the time that they get their act together and work out what to do, Apple will be so dominant that Apple will be able to offer artists a much better deal than their labels do.
“It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.”
Well, I guess that proves Microsoft doesn’t exist.
If the music labels really wanted to solve their problems with the digital music middlemen like iTMS, it’s easy.
All they have to do is get themselves a bunch of servers; install them in the basements of their corporate headquarters; digitize their libraries into standardized format files without any DRM; set up online store fronts; sell those music files for 25 to 50 cents per song; and give at least fifty per cent of each sale to the artists. The artists will make more money and stay with the labels. The labels will stay in business. They won’t make nearly as much money as they used to, but they’ll still be around to continue making money. Which will beat the alternative. Not being in business at all.
Of course, within a short period of time (well within five years), most brick and morter stores, as well as iTMS, and other non-label/non-artist music download sites would be out of business. I’d even say P2P music sharing would pretty much be history as well.
Before you accuse me of being unrealistic with my imaginative little scenario, let me say I’m fully aware it will never come to pass.
The music labels/industry is just too stupid and short-sighted.
MDN word “find.” As in the music industry couldn’t find it’s ass from a hole in the gound.
Arabe Time…. Is there any Arab ITMS?
Hey, calling record execs “pimps” is an insult to b*tch slapping thugs everywhere. They’re not nearly as nice as pimps.
Those music execs are just pissed that Apple execs decline when they offer coke and whores in exchange for more promotion on iTunes. Go figure
Just like Apple put it them selves : ”The biggest story in music keeps getting bigger.” If Apple can get Apple Corps, nothing will be able to stop them. I’m starting to think that the iPod’s out-of-this-world performance isn’t even half of what Apple and the music industry will become. Call Apple buying Apple Corps. a dream but, then again, we are talking about Apple here…
Labels can hope for consumers’ habits to change, but in the end the public will vote with their wallets.
Thank goodness :p
“I have been using apple computers since 1978 and the Mac since 1984; there have always been articles and predictions that Apple would go under “soon” or “in XXX months.”To paraphrase Mark Twain: Reports of Apple’s Death have been greatly exaggerated.
I noticed that in Japan already, after the iTMS was open less than a week, at least one artist was ready to jump the Sony ship and sign up with Apple directly. In the old days, the record labels were a necessary evil as somebody had to press the vinyl (and later CD’s) and distribute them to consumers. Moving atoms around costs money and requires distribution channels, etc.
But in the digital age, all that is obsolete. Moving bits around, instead of atoms, costs nearly nothing. The record labels have become superfluous. They no longer perform a service, other than promoting artists and providing recording studios. The latter is now really of marginal value, since prosumer gear is of such high quality and becoming affordable. To the extent that it’s not, i can envision small recording studios or coops springing up to meet artist demand.
Regarding artist promotion, the truth is the record labels provide no value here as they pass over many truly creative and talented artists to promote artists of lesser ability but with marketable qualities other than musical proficiency. As a result, we get a lot of mediocre artists.
I for one think the record labels have served their purpose in the past, but abused their position. And they should have been clever enough to see a storm on the horizon and to mend a few of the bridges they had burned along the way. They didn’t and now the storm is nearly upon them. Did they simply fail to see that their role in the digital millennium would be superfluous? Or did their greed simply blind them? Either way, i don’t feel much sympathy for them.
These are the same dopes that turned down every Rock megastar
2 or 3 times before the persistance and drive of the artist led to success.
These are the same dopes that resisted any move to new media in the
first place–and these are the same dopes who push MP3 as if it was
the Bible Code and trash Apple Lossless. If only Jobs wasnt hypnotized by
Intel inside Id feel more comfortable joining the cult. Oh and If these
people are predicting an 80 % market share over the next 18 months —
that together with the growth of some thing called PODcasting—well let
me just say–its the wave of the future.
Isn’t it strange for “Arab Times” to talk about “cults” when their people are blowing up other people at the urgings of religion?
Music executives don’t like having to say please. They so used to naming their terms they have no idea what to do when someone has the power to say no.
Bozos.
Macaday –
Careful. If popular opinion is right, then Windows is the desktop OS to use.
hemm.. that doesn’t really count.. windows has no competition in the client side of the business market.. that’s where the marketshare is coming from..
in the consumer market, there isn’t really much choice there… most people are NOT informed about alternatives to Windows.. and really don’t have a ‘choice’ there..
An informed decision would make the Mac installed base much bigger
“Isn’t it strange for “Arab Times” to talk about “cults” when their people are blowing up other people at the urgings of religion?”
There are cults everywhere, not just in any religion. Let’s not generalize any specific religion, it’s not fair to those who don’t apply.
In a black and white world, all of the physical features stand out. There
are no REAL distractions.
Color is a whole different ball game. Color moves us and tears at our
emotions. When is the last time you confronted a sea of uniformed
soldiers in pursuit of the enemy? It IS scary!
I don’t believe the public will ever know what to expect from the record
labels. Apple, of course is just a computer company.
Until Napster…the average person didn’t have much access to a wide
variety of listening options. Today, it’s a different story.
Music…yeah, we got that.
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CT ======]————- Playing Ball?
Mac users are no more a cult than the luddites that are too afraid/ignorant or lame to try Unix/Linux?Mac OS X. New Yorkers are famous for saying:
Hit me once, shame on you
Hit me twice, shame on me
How long will people put up with the insecure mess that is the ‘Trustworthy Computing’ experience offered up by Micro$oftopoly?
Amazing…
Making demands can stifle any business relationship. Take a
stockbroker for example. He’s in the business of moving shares of
stock. The more interested parties in a stock, the more trades, and
the more income for the broker. A great broker can make thier clients
wealthy…an average one will make money for you. None of them are
great to begin with.
I know brokers and thier clients both hold important keys. It’s the
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combination of keys that produces success. Holding back when the
broker demands more…Tough call!
CT =====]————- Sifting through the sand
As usual, the record industry speaks in double speak.
What they are really saying – “flexible pricing” – note they are not saying, man if could sell at $.89, we could sell more downloads – no, what they are really saying is because we cannot raise prices, the market is limited.
… Because if you raise prices, you will sell more? WTF?
It’s limited according to them because there are two DRM’s – as far as most sensible people can see, consumers have already picked a DRM – Apple’s AAC. If you have 20 stores selling the EXACT SAME TRACKS at the same or LOWER prices (walmart.com) and yet consumers choose the OTHER format – have’t consumers clearly made a decision? Just like in the days of cassettes or 8-tracks, didn’t consumers already make a choice?
Apple is only a cult because they make up any other names to call. Apple is only a cult because they cannot control Apple. And damn those consumers, just because we stop selling singles and expect people to buy $18.99 CD’s and then they go and create Mp3’s – we have WMA tracks for years and no one cares – now everyone wants AAC. Damn you all to hell … meanwhile, they only way they can get radio stations to play tracks is to PAY THEM under the table (see NY State’s recent settlemnt). It should be pretty clear by now they have no idea how to run a business.
Don’t kid yourselves. This is not a war between Apple and the Music Industry buffoons. This is now, and always has been, a war between Apple and Microsoft.
Haven’t you yet noticed that the music companies always cry about losing revenue from competition with P2P services, yet they NEVER use the argument that computer/MP3 player users should rip CDs or download from the iTMS as a way to avoid spyware, viruses, and worms. Why not?
Because Microsoft’s monopoly powerbase is beginning to crumble under its own weight, the iPod Halo effect, and malware. It’s trying to use the music industry as leverage to force its control over the PC market.
You see, Microsoft knows what Apple has up its sleeve: a major resurgence of the OS wars. And Apple, this time, is on the high ground, while MS stirs malcontent in the lowlands. The hand that feeds the music industry is now Microsoft behind the scenes, not Apple’s iTMS above the table. Microsoft has billions of $$ in comparison to Apple’s millions, so M$ can promise to make up for the music industry’s losses with payoffs while it attempts to wrest control from Apple.
Why?
As always, M$ knows again that this is not a war that can be won fairly. It can not keep its monopoly in the office if it loses its monopoly on the home-front. In the 1990s, people bought home computers they were used to using at work, the one that all the “experts” told them to get.
Where music is concerned, consumers ARE the experts. If Apple gets enough iPods+iTunes+iTMS to enough switchers and adders, then in the future, they will want to have machines at work like the computers they’re used to using at home…
That is, unless Microsoft gets full control over the music companies *and* the people that consume music, thereby keeping its monopoly in consumer’s homes and consumers continue to use Windows machines at work because that’s what they’re still used to using at home.
That’s the only way Microsoft can beat Apple… because it can’t do it on merit alone.
Apple needs to be forcibly dropped down a few notches. The hard way. Jobs is an arrogant turd.
That won’t happen. Apple is set to go up severaal nothches more in the near future.
You see, Microsoft knows what Apple has up its sleeve: a major resurgence of the OS wars.
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Ahem.. it doesn’t a visionary like Gates to pick up on that. We’ve all seen Apple’s ‘growth rate’ graphs.
What MS doesn’t know is… what Apple has up its sleeve.. If they did, MS wouldn’t be 5 years behind on OS features, and they wouldn’t be spending billions on MS Research
You have ‘growth rate’ in quotes, yet ‘MS Research’ isn’t. How come?
Typical Apple/music label exec conversation:
Exec: “We’ve got a lot of bands that have only one good song. If anyone had a choice between buying that song alone or buying the album, we’d sell three copies of the album. So we want you to offer the album only–15 tracks, or nothing. Maybe in a couple of months you can sell the good track by itself for $6.99.”
Apple: “We’re Apple. We don’t do that. Either the tracks are available for 99 cents each, or you can stuff that album up your ass.”
Exec: “Frikkin’ cult.”
Next conversation:
Exec: “This is a new band we’re trying to promote. So for the first three weeks, we want their album to be $8, then if they get good MTV play, we want the album to be $15, and then six months later you can put it down to $9.99.”
Apple: “The album will be $9.99, and each track .99 cents. It will be $9.99 the week it out, two weeks later, and six months later. $9.99.”
Exec: “Frikkin’ cult.”
^
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Sadly, I bet that’s exactly how those conversations went.
Is it any wonder these ‘record’ companies are losing millions each year? They want the same dictatorial power that has fleeced artists and ‘record’ stores for years. Apple comes along and refuses to go along and the labels whine about it. I’m just waiting for Michael Jackson to get desperate enough that he has to sell the Beatles collection and Apple steps up and buys it for a song!
Andrew Hamilton
Hamilton International Productions
http://www.hiproductions.com
It must make the record execs blood boil to find themselves unable to control their music distribution business. SJ is making them al play straight and its hurting like hell.
Hence the quotes to the press.
Tough luck SONY, BMV and all the other manipulative BARS***DS
Quick check shows 31 track compilation costs 19.98 on iTunes, 11.99 on Amazon. Most of Amazon’s 3 for 10 pound CDs are also full price on iTunes. There is definitely more than one way to skin a cat in terms of music pricing.
iTMS has sold something like 6 tunes for every iPod sold. That is hardly a revolution. If the price of albums was something like 60% of the shop price, then maybe people will buy more than the odd track. If the labels could compete on price, then you might get things like the ‘3 for 2’ album offers they do in stores.
Of course, there is an iPod compatible way for stores to sell music at the price they want that works with ALL media players. It’s called MP3. You can buy them from bleep.com – it didn’t hurt Franz Ferdinand who still managed to sell millions of real CDs despite offering their music in a non-DRM format.
However, if you think Apple are the good guys, it’s worth asking why the UK indie labels would not sign up with iTunes when they started in the UK – including many who were already selling non-DRM music via Bleep. It was because of the rates Apple wanted. Once again, these were people already selling music in MP3 format. But of course they are record companies and therefore evil, I forget.
Actually, it’s 24 songs per iPod sold.
Which 31 compilation are you talking about? Which iTMS? Are you referring to used or new CD’s? You don’t give many details.
“”Privately, record company executives say they can’t wait. Not because they want to see Apple stumble, but because a less dominant Apple means a more robust market for digital music”
Translation, they want to jack the prices up to 2 bucks per download.
It’s amazing, without Apple these idiots would still be swimming around trying to find their way in the dark about digital downloads. Apple CREATED this market, and now they want to screw it all up.
Screw them. They raise the price, Im going back to pirating, which I stopped doing when iTunes came out.
“Most of Amazon’s 3 for 10 pound CDs are also full price on iTunes. There is definitely more than one way to skin a cat in terms of music pricing.”
The MAIN reason that CDs are lowered in price is because of supply and demand. The record companies have too many CDs, they need to get rid of the physical inventory, they’ve already made the product, and they if they don’t sell the product, they’ll lose their investment.
Rather than make nothing, they’ll cut their losses and so give you, the customers, a “break” for a product very few of you, the customers, want.
Now how does this model work in iTMS? Very simple. There is no inventory. There is no loss (except the slight loss of keeping the electronic AAC file for unpopular music on disk). So there is absolutely no incentive, nor any reason, to lower prices. If no one ever buys the unpopular song, there’s no loss to Apple or to the customers. Meanwhile, the product is ALWAYS available for the rare fan who might want it.
In reality, price flexibility for the record companies meaning jacking UP the price for popular products. Now the iTMS is not doing that, because The Steve has figured out that a happy customer is preferable to a fscked-over customer and he’s right.
Cult, my ass. What they mean is that Apple and its customers are not sheep, waiting to get shorn.
‘It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.’
Yeah well tell that to Microsoft, and they ain’t even the best.
The labels could auction off the sales rights to the artists and let them
name thier price. No more labels and artists bet on thier own material,
then decide what it’s worth. A new market, of sorts.
I dunno…it’s complicated.
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CT =====]————– It’s butter
this says it all …
http://homepage.mac.com/metroxing/iblog/B1641024610/index.html
Yeah well tell that to Microsoft, and they ain’t even the best
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It says consumer electronics…
Monopolies are not weird and wacky.. he meant CE is so competitive.. typically..
The thing is.. the iPod is a combination of software and hardware that makes it ALMOST not CE. It’s the software that is locking people into the iPod..something the Walkman of old could never do, because it was void of any software/DRM
A long thread so far!
The best essay I have ever read on how the major labels do business is Steve Albini’s The Problem With Music. a/k/a “Some Of Your Friends Are Already This Fucked.”
(Although he kind of steals his first line from Hunter S. Thompson, it would appear.)
‘It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.’
Well, it’s been over 2 years now already Mr. Munster. So I guess this theory of yours goes straight to hell if Apple still has 80% market share by April 2006.
I buy an album or more a week from iTMS and I don’t even have an iPod currently. I listen to the music via my Mac and iTunes – hooked up to my very expensive stereo system.
So, how exactly am I locked in iPod?
Sorry for the reality intrusion, Napster weasel.
“Any band starting out today would be wise to learn ProTools, record the album themselves,”
I love iTunes, but I also love eMusic.com. No DRM in those mp3’s. I get 40 downloads a month for just 10 bucks.
There arent a lot of uber popular artists, but i dont need the media telling me what to like anyway. Discover music on your own.
“Well, it’s been over 2 years now already Mr. Munster. So I guess this theory of yours goes straight to hell if Apple still has 80% market share by April 2006”
It’s actually been 4 years since the iPod came out.
The compilation was Primal Scream’s ‘Dirty Hits’ on the UK iTMS store. Also compared ‘Cellarful of Motown’, and a number of others.
Oddysey – I HAVE used Garageband, so I know what it does and doesn’t do. It is a great piece of software (no joke : you can write dance music in less time than it takes to listen to it), but just as a record label does more than get inbetween artists and consumers, there is more to a recording studio than the tape deck and sequencer.
At the simplest and most obvious, bands can play loud without disturbing people.
Capturing a live band in a way that sounds live is a skill most people who do home-recording don’t have – I can really understand why people would pay to have Rudy Van Gelder or Steve Albini engineer their recordings.
Apple won’t be ‘signing’ anyone as ‘signing’ means giving your rights away to a label in return for money – the very thing you’re saying iTunes and Garageband will remove. Indie artists, including those on their own ‘label’ are already represented on iTunes so there’s nothing to stop you now. The $10,000,000 question is whether they’d ever add a ‘publish to iTMS’ button in Garageband? (Not until they can find a way of checking you haven’t sampled any copyright material).
Glad to see that Albini article made it on here – read that in a fanzine years ago and it contains so much truth about the relationship between record companies and artists.
Clue : I don’t know what you do for a living but if someone offered me 1/2 million quid but then said they’d ‘own’ me for the next 4 years, I’d be thinking ‘what’s the catch’. I know musicians are often exploited BUT how many times can you hear the same story without it getting through?
The comet’s halfway to Earth, and the dinosaurs don’t even notice the shadow!
You add in direct to consumer streaming widgets, why need a record company at all?
http://createdigitalmusic.com/index.php?option=com_content&task=view&id=791&Itemid=44
Oh yeah, it makes more sense to pay a $10 million payola fine than to come up with ways to move with the times.
BBB
re: Follower. The Albini link is a classic.
To foot the bill for the 100s of scantily clad booty shaking ‘dancers’ in your video of course. There will always be a role for ‘record companies’ while we have ‘stars’ and promotion.
iTunes replaces the duplication, distribution and retail layer. This isn’t the bit where the record companies make their money – it’s the bit where shops, duplicating plants and haulage firms make their money. And duplication is only a fractional part of costs.
At the promotion end the big new thing in ‘the ghetto’ are ‘mixtape’ DVDs. Pirate radio covers the music that the commercial stations don’t play, now these guys are doing the same for TV, and it’s breaking artists – and that’s down to cheap DVD burners and editing software.