Warner music exec discusses decapitation strategy for Apple iTunes Music Store

“Michael Nash, Warner’s digital strategy chief, suggested labels might have no choice other than cut Apple’s digital music sales off at a stroke,” Andrew Orlowski reports for The Register. “‘What if Jobs says 39 cents or 29 cents per download – what then? The industry can say, OK we’ll cut him of – very few people people buy music from digital downloads,’ said Nash, who pointed out that most of the music on iPods is from their own collections. The iPod won’t disappear, he pointed out, and the decapitation will really feel no more painful than a gentle shave. ‘[Jobs] will figure out another model,’ said Nash… His comments came at the CTIA Telecomms Show, in a panel titled ‘Artists, Labels, Publishers: What Do License Holders Want.'”

Nash also said, “The industry got together and said ‘We don’t want another MTV’. Well, now we’ve got another MTV, in Apple. And we have to deal with it.” And an unnamed executive stated, “It’s going to be difficult to get the consumer to stop thinking about owning music, and think about paying for participation instead,” Orlowski reports.

Full article here.

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Record labels accuse Apple CEO Jobs of ‘double standard’ as they seek to force iTunes price increase – September 21, 2005
Apple CEO Steve Jobs to repel ‘greedy’ record companies’ demands for higher iTunes prices – September 21, 2005
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BusinessWeek: Apple unlikely to launch music subscription service – August 15, 2005
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Report: Apple CEO Steve Jobs ‘angered’ as music labels try to raise prices for downloads – February 28, 2005
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  1. This Nash is a moron, ” most of the music on iPods is from their own collections ” ? Yeah, that may be true for some people, but my sons, 14 and 12 years old, downloaded more than 50 songs from iTune and they never buy any CD from the store before!!! That’s why Apple sold more than 500 million , get this Nash, 500 millions songs and counting!!!

  2. Unbelievable! Certainly, downloaded music now only represents about 5% of their sales, but it is obviously the future as far as growth potential and buying habits of the next generations of consumers. And can you believe this quote further on down in the article?

    ””It’s going to be difficult to get the consumer to stop thinking about owning music, and think about paying for participation instead,” said one executive.”

    Talk about understatement of the millennium! These guys are clueless.

    Magic Word is “left” as in the record companies have been left behind because of their own delusions.

  3. PBS “Nightly Business Report” doing series of segments on music business. Last night lots of info on indies and downloads. Musician saying “iTMS downloads have paid my mortgage for months.”

    Another guy I think IN the industry saying, “Downloads are going to replace CD sales like CD replaced vinyl.” (paraphrased)

    THIS quote following above: “And I’m not talking 5-10 yrs down the line. I’m saying 1-2 yrs.”

    Watch that wave guys; you can surf it or get drowned.

    MW: “future”. (self-explanitory)

  4. First things first: why does the Register employ 12 year olds to write their articles? They are so hard to read, and they take ridiculously circuitious routes to what are fairly straightforward points.

    Next, from TFA, from some exec: “It’s going to be difficult to get the consumer to stop thinking about owning music, and think about paying for participation instead,” said one executive.”

    This is some kind of NewSpeak to be sure, but i think it translates roughly to “… i’m a douche-bag …”

    As i have said before, Apple hands them a revenue stream, helps them turn CD sales around, and their response is to try to cut them out of the loop.

    The only people who don’t like the 99c model are the people making the most money out of it. Riddle me that one …

  5. It is obvious to the labels that they are very vulnerable. Would this bonehead throw that card at Walmart who sells far more music than Apple? Nope, but Walmart doesn’t have the balls to make a move to eliminate them – Apple is positioning perfectly to facilitate their own brand. No band needs a label then. That is the sound of panic in a punks voice.

  6. Music industry execs genuinely believe they are the shapers of contemporary culture, and are thus entitled to view anybody and anything else as merely consumers or tools to be used to sell more records. They have completely forgotten that people want to own their music, and that music is such an integral part of peoples’ lives that the very idea of simply renting it is almost repulsive. That may change in generations to come, but not for the next 10 years. If they think they can turn the music industry into a ring-tone business charging $3 a pop for something you can buy on-line for a 1/3 of that, they’re in for a nasty surprise.

    Unfortunately, the mobile phone industry has managed to delude the music execs even further, and convinced them that mobile-based music is the way forward, at excessive prices controled by unuseable DRM schemes. Until the mobile industry is proved wrong (which IMO will take about 3 years) the music industry will continue to dream that it can sell individual tracks at $3 each, and view a 99c price-point as an anathema to be left behind as soon as possible. However, there’s no way Warner, or anyone else, would unilaterally withdraw from iTunes and see its sales drop off the online music charts. Its just noise.. the noise of a bunch of overpaid egos strutting around in their cages, showing off to one another in a way that only music execs can, unaware that they’re going to be slaughtered.

  7. what a knob job this guy is !
    I will never pay a subscrption fee to download music, looks like the music exec’s want piracy to come back for a while then want to jump in bed with MS to try and save the day. They are nuts

  8. The music industry needs to look at another industry that’s been affected by the digital transformation of an industry & the digital revolution.

    How many people still own & regularly use film based cameras? It seems l ike everyone has a digital camera (be it high end or low end). When was the last time you took a film camera in for development?

    Take Kodak for example. They could have paniced and feared the digital revolution when film camera sales declined. They could have paniced when film developing declined. Did they assault the customers with anti-digital propoganda? No. Did they fight back in a positive way, which helped develop an industry that’s just as powerful as it always was if not MORE SO? Yes and hell yes!

    Every Kodak printer and camera in the digital realm was designed to help assist the user in faster & easier prints. They realized film was declining and stepped up development of more advanced printers, card readers in printers, paper, cameras that connect TO the printers (no need for even a computer if you want).

    Kodak fought their battle in a possitive way with the customers at home. They also got into the field of kiosks with helping customers walk into any convience store (Walgreens in my area for example) and scan and print directly AT the store. You can off load your digital prints AT the store and develop them in an hour or less. Every time I am in Walgreens, those kiosks are being used!!

    Kodak’s attitude towards embracing an oncoming technology should be the model for the music industry. Don’t fear change, embrace it!!

    Don’t fight progress, it alienates your customers and stifles legitimate sales. Bite the bullet, and help be a leader in the digital revolution in your industry.

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