Music biz fears of Euro iTunes Music Store show Apple’s power in online music biz

“Apple has won an unusual vote of confidence from the European music industry. The major labels are so convinced that the Mac maker’s iTunes Music Service will successfully dominate the online music market over here, they are allegedly playing hard to get in Apple’s content licensing negotiations,” Tony Smith reports for The Register.

“According to a report in the Independent newspaper, industry insiders claim the labels fear giving their songs to Apple for too little. They cite the example of MTV, which grew on the back of the promo videos the industry provided it for next to nothing,” Smith reports. “‘The older record executives don’t want that again, where they’re over a barrel with one big provider,’ a source said.”

Smith reports, “Maybe not, but why then are they willing to license content to other suppliers? It’s by no means a monopoly, but On Demand Distribution – aka OD2 – is arguably Europe’s dominant player thanks to the licensing support it has been given by the major labels. If they’re worried about Apple achieving dominance, why were they never to fearful for their relationship with OD2? With OD2 already serving a number of reseller customers, Sony bringing the European version of its Connect on stream in June, Napster launching in the UK ‘before the end of the summer’ and Virgin Digital on its way, the music industry must have some very high expectations of Apple indeed, if it collectively thinks iTMS can trounce such big-name rivals.”

Full article here.


  1. What a bunch of wimps. If it was MS it would be open arms. Should be interesting to see how this pans out. Sounds like anticompetitive pricing to me.

    I wonder if other countries will do the same?

  2. Greedy Record labels. Plain and simple. They want as much cash as possible. Apple doesn’t worry much about the cost of the music, except that it be as inexpensive as possible, but is more concerned about selling iPods. It makes sense.

    Give away the Razor blades, but sell the Shavers. Sound familiar?

  3. They site the example of MTV which grew playing free promo videos? NO ONE ELSE WOULD PLAY THE CRAP. “The music industry is dead. Long live the music industry.”

  4. The only “danger” to iTunes in the marketplace is outside interference which is exactly what this is. Where is the EU and their watchdog agencies.

    It is monopolistic behavior to impede a businesses ability to do business. This pisses me off

    This is ultimately about subscriptions (a failed, failing business model) vs. iTunes (something that does work)

    $.99 songs do not bring in recurring revenue.

  5. The labels can relax because Scott Blum isn’t taking his ‘BuyMusic @’ service to Europe. He would really have taken marketshare the way he did here in the US. <sarcasm>

  6. All Apple needs is a few players on board to launch, while the rest sit idly by. Once the others see they’re going to be left out, they’ll clamor to get onboard.

  7. The EMpty-vee analogy used by the European labels is an inappropriate one, I feel. As I understand it, Mtv didn’t pay the labels to use the videos they showed. The labels and the artists regarded Mtv as free publicity and promotion, aside from the cost of producing the video. There wasn’t any direct profit from a relationship with Mtv. It was all about stimulating public interest in an artist so they’d go out and buy the album. And, there was such a huge list of artists wanting to get their videos aired, that Mtv didn’t need or have to pay for their use.

    The iTunes Music Store pays the lion’s share of the profits from each song sale to the record labels. They profit substantially from it as there is no overhead on their part. To compare it to Mtv is just silly and shows a lack of understanding of the business model on the labels part. Apple needs to spend some time educating these idiots.

    Bizarro Jeff

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