“Last week America’s Department of Justice opened an inquiry into ‘the possibility of anti-competitive practices in the music-download industry.’ The department’s action is the second investigation into possible price collusion in music-downloads in America: in December 2005 Eliot Spitzer, New York’s crusading attorney-general, announced a similar inquiry. But nearly nothing is known about exactly what practices prompted the investigations,” The Economist reports. “What has probably happened is that Mr Spitzer and the Department of Justice have been dragged into a massive public row between the music industry and Apple, a computer-maker which has 83% of the market for music downloads through its iPod music players and iTunes download service. The music majors want Apple to stop charging a fixed price of 99 cents per track and $9.99 for an album. They want variable pricing, so that new releases can be priced higher than older stuff.”
“The music companies will soon have a chance to get their way,” The Economist reports. “Their contracts with Apple are up for renewal from April onwards. They will presumably tell Steve Jobs, Apple’s chief executive, that he cannot have their music unless he pays them more than the 65-75 cents they get now. That could force Apple to raise its retail price. The music firms’ strongest position, of course, would be to present a united front. That three of the big four—Sony BMG, Warner Music and EMI—are all saying roughly the same thing about Apple’s pricing has aroused the suspicion that they may be colluding, says a Washington lobbyist. The music labels reckon that the Digital Media Association, which represents Apple, among others, has complained to the Department of Justice.”
Full article here.
[Thanks to MacDailyNews Reader “David G.” for the heads up.]
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Related articles:
U.S. DOJ opens probe into online music pricing at major labels – March 03, 2006
New York State antitrust probe of music labels could benefit Apple, keep 99-cents per song price tag – January 04, 2006
New York Attorney General Spitzer probes digital download wholesale pricing – December 23, 2005
Will Apple’s iTunes Music Store be forced to raise prices by greedy music labels? – November 17, 2005
EMI chief: Apple’s Steve Jobs may alter iTunes pricing model within the next 12 months [UPDATED] – November 16, 2005
In 99-cent fight with ‘Looney iTunes’ labels, Apple CEO Jobs will get whatever Jobs wants – September 29, 2005
Warner music exec discusses decapitation strategy for Apple iTunes Music Store – September 28, 2005
Warner CEO Bronfman: Apple iTunes Music Store’s 99-cent-per-song model unfair – September 23, 2005
Analyst: Apple has upper hand in iTunes Music Store licensing negotiations with music labels – September 23, 2005
Steve Jobs plays high-stakes poker with greedy record labels – September 22, 2005
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
Apple CEO Steve Jobs vows to stand firm in face of ‘greedy’ record companies – September 20, 2005
NYT’s Pogue to record companies: it’d be idiotic to mess with Apple iTunes Music Store prices – August 31, 2005
Apple CEO Steve Jobs prepares for pivotal fight on digital music prices – August 28, 2005
BusinessWeek: Apple unlikely to launch music subscription service – August 15, 2005
Record labels to push Apple for higher iTunes Music Store prices in 2006? – August 05, 2005
Study shows Apple iTunes Music Store pay-per-download model preferred over subscription service – April 11, 2005
Record labels look to raise iTunes wholesale prices, music industry fears Apple’s market domination – March 05, 2005
Report: Apple CEO Steve Jobs ‘angered’ as music labels try to raise prices for downloads – February 28, 2005
Report: Music labels delay Euro iTunes Music Store fearing Apple domination – May 05, 2004
Greedy Big Five music labels looking to jack up iTunes songs to $2.49 each? – April 22, 2004
That’s gratitude for ya! Greedy bastards… Jobs was their saving grace and now they want to strong arm him and rip us off in the process. If they would just spend as much time and money on cultivating artist’s careers they’d have better products to sell. Instead they put all thier eggs into one, maybe two hit singles off an album, the rest being filler. The companies know that and want to charge more for those hit singles. If they just made better music they’d make more money!
Sounds to me like they (labels) used Apple to test the water, and now that it is teeming with fresh meat, they’re pulling anchor and setting sail on their own.
The new ads suck big time!
Scarbro. I couldn’t agree more.
PS Scarb.. as in Ontario?
is anyone seeing the new MDN ad’s from the RSS feed? I haven’t seen one yet and I always start from the RSS feed.
If the big music labels force Apple to renegotiate its pricing structure perhaps
some of the labels big acts will consider renegotiating their own relationship with
the big labels as well….or maybe negotiate with an independent.
I can’t say I really know how the money is allocated after the bills are paid but
how will the extra income from more recent higher priced recordings be distributed?
Will the artists see more of it or will most of it end up in the execs pockets?
Will the argument that was made recently become operative? …..that is an imposed
pricing differential be deliberately used to hurt an artist if the label desired or to force
the artist to negotiate a contract in fear? Hasn’t the pricing structure so far been a boon
to the labels reducing piracy and encouraging purchases that would never otherwise
have been made?
Personally, I think the labels should push for two things: liner notes
and a higher bitrate. Otherwise, leave the model alone.
The article says that Jobs’ greedy charge is unfair because the labels have to allow selling singles instead of albums, and because people fill their iPods from CDs. The logic doesn’t hold fully.
If people are filling iPods from CDs, then the labels are still making money off of CDs. If people are buying singles online instead of albums, then the labels are getting 70 cents or so in revenue per single vs. a few dollars per CD album. But factor in that some percentage would wind up not buying the album at all (too lazy or too annoyed to go to the store) and some percentage would just get it through piracy (reasoning that they wouldn’t buy it otherwise). And factor in that the label can sell many more songs digitally from their back catalog on iTunes then they would if they had to make CDs and stock music stores.
I gotta say the RSS feed with Safari is great. It provides the number of new MDN stories at a glance.
Interesting, though, that the deal with the music labels end in April. I feel like this is the cuban missile crisis with such brinkmanship. Again, the labels can’t go anywhere and lose out on all the profits. But the apple stock will plunge if the store is shut down. There’s a lot of middle ground, though the 99¢ song price should be a lock. Maybe Apple could offer 5% more song share to the labels.
“..the music business has always been disreputable: its artists get arrested, music charts are rigged and two leading companies recently got caught bribing radio stations. Now it seems that big music companies may also be illegally conspiring to fix prices on the internet. Last week America’s Department of Justice opened an inquiry into “the possibility of anti-competitive practices in the music-download industry.”…
Maybe its about time the DOJ did its job, unless there are people within the DOJ enjoying their payoffs.
do you really thing Apple’s stock would plummet if iTMS closed, does Apple make that much from it?.. besides couldn’t they keep it open for TV shows, etc?
The DoJ has been a lap-dog instead of a watchdog for a very long time now. WHat we need is an Attorney General like NY AG Eliot Spitzer. While the US DoJ was looking the other way or whatever they were doing instead of their job, he used the NY AG’s Office against all kinds of corruption to the benefit of all Americans. By virtue of location, he had jurisdiction in cases that other state AG’s could only watch from the sidelines.
Read the full wiki. BTW- he is running for NY Governor. Someday, maybe President.
http://en.wikipedia.org/wiki/Eliot_Spitzer
It figures people finally stop downloading pirated music thanks to apple and now the greedy music industry wants to go and shake things up again. Actually its really simple if the music companys get really greedy and start charging prices that we as the consumer don’t like then its back to pirated music. Don’t they realize this. I actually started to feel like I was helping out by buying so much music from Itunes. If it starts getting to prices higher than 9.99 then I am done buying music online, especially since its not even cd quality.
It figures people finally stop downloading pirated music thanks to apple and now the greedy music industry wants to go and shake things up again. Actually its really simple if the music companys get really greedy and start charging prices that we as the consumer don’t like then its back to pirated music. Don’t they realize this. I actually started to feel like I was helping out by buying so much music from Itunes. If it starts getting to prices higher than 9.99 then I am done buying music online, especially since its not even cd quality.
It figures people finally stop downloading pirated music thanks to apple and now the greedy music industry wants to go and shake things up again. Actually its really simple if the music companys get really greedy and start charging prices that we as the consumer don’t like then its back to pirated music. Don’t they realize this. I actually started to feel like I was helping out by buying so much music from Itunes. If it starts getting to prices higher than 9.99 then I am done buying music online, especially since its not even cd quality.
It figures people finally stop downloading pirated music thanks to apple and now the greedy music industry wants to go and shake things up again. Actually its really simple if the music companys get really greedy and start charging prices that we as the consumer don’t like then its back to pirated music. Don’t they realize this. I actually started to feel like I was helping out by buying so much music from Itunes. If it starts getting to prices higher than 9.99 then I am done buying music online, especially since its not even cd quality.
IT’S GOODBYE MDN IF THESE ADS CONTINUE!
This story is BS (and so are the experimental MDN Ads).
Walmart sells downloads for less than iTunes.
They just keep pounding this same crappy headline over and over and over and over and…..
If found guilty of collusion this would only be about the 5th or 6th time they’ve been caught. Of course isntead of really punishing them, they will offer consumers some lame ass discount coupon for 3$ off a CD of their choice. Too bad that 3$ off would only make the price 175% more than what it ought to be.
Wanna stop them from doing this again, how about a billion dollar fine.
The Clinton DoJ was going after MS, so MS stalled in hopes of a monopoly-friendly Republican president. Sure enough, as soon as Bush replaced the DoJ with his people, the DoJ backed way off. MS was left with a slap on the wrist that nobody actually thought would deter them from anything.
Now that same DoJ is supposed to go after the music industry? Ha.
He is the very definition of “abuse of power”. His actions have nothing to do with justice, everything to do with advancing his career at the expense of some individuals. In fact, when he does end up in court, he tends to lose. There is zero chance that SOB will ever be President. I haven’t volunteered for a political campaign in 30 years, but if he were to run for POTUS, I would do it on behalf his opponent whoever that may be.
Jake
SJ is perfectly capable of handling this himself. The only thing the DOJ can do is screw things up, with consumers footing the bill.
Kate
P.S. And I can’t stand the music companies, by the way.
‘Spitzer is slime’ is right on. He omitted to mention, however, that Guiliani, and a very large proportion of DOJ and Federal prosecutors are cut from the very same cloth.
Prepare for a slap on the wrist –
I’m with ya, Buddy. Under Clinton, the Fair Trade Commission found that several of the labels were abusing their oligopoly to prevent retailers from lowering prices on CDs. Once Dubya got in, though, any moves towards remedial action stopped dead. CDs cost less to manufacture than LPs, but they’ve always sold for far more. Sony/BMG sells CDs for $5.99 via their music club. Why on earth should the same CDs cost $12-$15 at retailers? Stinks to high Heaven. Don’t count on this Administration’s Department of Justification to put things right, though. I hope Spitzer has a little more leverage.
to all you whining about the ads… try the rss feed method, works beautifully. should MDN do a pledge drive?.. please don’t say yes.