“Apple Computer may not be so lucky this time. Its iTune [sic] Music Store and the iPod digital music player are important strategic products for the company, as it has been touting digital media as part of a new lifestyle-driven marketing image. Songs on the iTunes online store, which has sold more than 10 millions songs at 99 cents each since the April 2003 launch, are already subject to stiff royalty payments,” Arik Hesseldahl reports for Forbes.com.
“The service is as yet only available to users of Apple’s Macintosh computers, but should debut for users of Microsoft’s Windows platform before the end of the year. Sensing a groundswell, Applecorps is likely to want a cut of the action that will only make it harder for Apple Computer to break even on the service. And Apple Computer is going to have a tough time arguing that it’s no longer in the music business,” Hesseldahl reports.
“Apple Computer attorneys are likely to negotiate another big settlement, one that will likely have the company paying royalties as long as it operates the iTunes store. It can certainly afford it, with more than $4.5 billion in cash reserves,” Hesseldahl reports. “And maybe, just maybe, such a settlement will include a deal for The Beatles to appear exclusively on the iTunes store service. While the Beatles may have sung about revolution in the late ’60s, they certainly haven’t seemed interested in the digital music revolution taking place around them. The only digital downloads available of Beatles recording are either very early recordings that Applecorps has no control over, or pirated files on services such as Kazaa or Morpheus. With CD sales on the decline, the Beatles run the risk of losing their appeal to younger generations who generally prefer getting music online.”
Full article here.