“When Apple Inc. sits for contract negotiations with the major record companies over the next month, it will probably seek further concessions from them on selling music without copy-protection software,” Yinka Adegoke reports for Reuters.
“The owner of the market-leading iPod digital media player and iTunes online music store has already cut an early deal with EMI Group, the third-largest record company, and enters talks with the other labels from a position of strength, according to music industry executives,” Adegoke reports. “That leaves Vivendi’s Universal Music Group; Sony BMG Music Entertainment, which is a joint venture of Sony Corp. and Bertelsmann ; and Warner Music Group in a tough spot.”
“Universal, Sony BMG and Warner will aim to steer contract renewal negotiations with Apple to discussions on variable pricing for songs, a subscription service for iTunes, and more bundling of tracks and other features into digital packages, music executives and analysts say,” Adegoke reports.
“The separate talks are scheduled to start toward the end of April and go into the summer,” Adegoke reports. “The music companies also want to improve their margins on the wholesale pricing of digital songs. There has even been talk of getting a cut of sales of iPods themselves, or future devices such as the highly anticipated iPhone set for availability in June. But analysts see that as unlikely, with EMI’s deal probably pushing the issue of dropping digital rights management to the top of the agenda.”
“The other three music companies say publicly that they are only experimenting with dropping DRM, but privately, executives accept that following EMI’s move it is only a matter of time. The industry will be watching Universal Music, which dominates with a market share of about 30 percent,” Adegoke reports.
Adegoke reports, “Analysts say the record companies hope to talk Apple into introducing a subscription model… ‘The record companies like the idea of the recurring revenue,’ said Gartner analyst Mike McGuire. ‘The challenge will be to convince Apple that it’s worth the extra costs involved in setting it up.'”
Full article here.
Related articles:
EMI provides Apple with opportunity to fortify digital content distribution dominance – April 11, 2007
Apple’s DRM-free EMI deal ‘a master stroke that should cement Apple’s dominance’ – April 03, 2007
In Apple’s DRM-free EMI music deal, the big loser may be Microsoft – April 03, 2007
Apple’s DRM-free iTunes play trumps Microsoft’s huge bet on DRM – April 02, 2007
Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
A royalty fee for iPods? Universal CEO Morris must be dreaming – December 03, 2006
Universal CEO Morris wants iPod royalty fee from Apple – November 28, 2006
Universal Music Group CEO calls iPod users thieves – November 11, 2006
Warner’s Middlebronfman: ‘We sell our songs through iPods, but we don’t have share of iPod revenue’ – October 05, 2005
Apple inks deal with big four labels: iTunes Music Store prices stay at 99-cents per song – May 01, 2006
Analyst: Apple in driver’s seat when it comes to renegotiating with music labels – March 31, 2006
Why music labels want to force multiple price points on Apple’s iTunes Music Store – November 21, 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
NYT’s Pogue to record companies: it’d be idiotic to mess with Apple iTunes Music Store prices – August 31, 2005
Report: Apple CEO Steve Jobs ‘angered’ as music labels try to raise prices for downloads – February 28, 2005
Greedy Big Five music labels looking to jack up iTunes songs to $2.49 each? – April 22, 2004
FT: Steve Jobs’ position in negotiating with music labels ‘undeniably getting stronger all the time’ – April 06, 2004
I got pwned once.
Once.
Where is the boundary of ownership?
I am writing a novel about this timely question, and will explore the historical, and the future. Of course, as science ficiton, it will have to be funny, and even a bit irreverent.
The novel is set in 2020, a time when genetic medicine has forced an in-your-face dialogue about what one can do with their own DNA instructions, and a consideration of the sentiment “Once released, it is everyone’s.”
It’s easy to imagine a world were innovation is so startling that first achievers needn’t worry about intellectual theft – no one will ever catch up, and only two choices present: out-innovate, or re-purpose.
These are great times.
Hey, Thorin — I agree with Man. Why don’t YOU screw!?!
All Man did was post his opinion. And he did it without calling anyone “names”. Then DipshitWhoBeatsOffToSkulls showed up and tried to pwn HIM.
But as is so often the case around here, the “pwn-er” quickly became the “pwn-ee”. DipshitWhoBeatsOffToSkulls got totally “owned” because he doesn’t know what the f-ck he’s talking about. Man is CORRECT! Go learn a thing or two about how the licensing of media works, you fool. Ditto to effwerd — there is no myth, idiot.
I don’t even know him, and I could even end up disagreeing with him on other thigns, but on this issue — Man is right.
DRM free music is an idiotic idea… who will pay for music if you can get it everywhere for FREE!
Wow, I have to admire the passion (I think).
^ Hey, that’s a cool, skeevy way of saying you’re sorry.
I guess.
“Adegoke reports, “Analysts say the record companies hope to talk Apple into introducing a subscription model..”
I bet they do. Bend over and take it, public.
My take: sod off, record labels. I’m not renting my music, not now, not ever.
“DRM free music is an idiotic idea… who will pay for music if you can get it everywhere for FREE!”
I guess MacGuy has never heard of bottled water companies, such as Evian and Dasani. Funny how so many people prefer to pay $2.00 for a bottle of water when they could get it from the tap for free!
“The music companies also want to improve their margins on the wholesale pricing of digital songs.”
These guys are freakin’ unbelievable. By all accounts I’ve read, they already get the lion’s share of revenue (70-80%) of each song sold on iTunes.
Greed doesn’t even come close to describing these people.
“Analysts say the record companies hope to talk Apple into introducing a subscription model…”
Talk about flogging a dead horse.
“The record companies like the idea of the recurring revenue.”
Duh, what a surprise.
“The challenge will be to convince Apple that it’s worth the extra costs involved in setting it up.”
If there was any greater indication that the suits running the music industry are clueless, I can’t imagine what it would be. It isn’t Apple that needs to be convinced.
It’s the vast majority of music buying consumers. Who have, when presented with alternatives, overwhelmingly rejected subscription arrangements.
BTW, if you’re one of those who like the idea of subscriptions, that’s fine, really. But you’re in the minority.
The marketplace has spoken. This may change in 15, 10 or even 5 years from today, and the way most people will prefer to listen to music may be by subscription. But that’s not how it is now.
I have no objection to music subs, but with my music listening habits, I’m just not interested.
At all.
Ever.
Making the early deal with EMI is a bit a strategic brilliance. Jobs is playing the record companies again each other perfectly. With the dominance of iTunes, Apple will get each company to go DRM-free, in turn. At worst (for Apple), the other companies will want to keep the DRM in place, but they will not push for the other nonsense they are trying to implement.
Apple should build and operate a subscription service for The Labels at cost plus 20%.
It would be a good little earner for Apple and The Labels would get it out of their system after dropping a few hundred million.
I agree with Big Al. With a name like that, I have to agree.
I really don’t understand why the labels want the subscritpion service on iTunes.
They already make (I’m guessing) 500x as much money from iTunes as they do from Yahoo, Napster, etc combined.
None of the other services have any real maretshare. Have any of the services released any REAL numbers on the number of monthly subscribers? I’m sure Napster and the others have had a few hundred thousand or even a million customers — but what about Churn? How many cancel after a month or two?
With iTunes you have a steady stream of 99cent and $9.99 clicks. All day. Everyday. It’s money for nothing.
Why oh why do they want to fix what isn’t broke?
If people want a subscription they have at least 5 or 6 options. Why would Apple want to spend the time and money for that small piece of the market — unless the labels want to give apple a bigger piece of the pie (DOUBTFUL).
Apple only wants to sell iPods and AppleTV and eventually cell phones. The current model is doing that. Why confuse the customer. Plus currently all the iPods work with the iTMS. I wonder if the shuffles would even work with a subscription service.
‘the “pwn-er” quickly became the “pwn-ee”.’
I see no reason to bring the native Americans in on this.
And that segways into the ‘divide and conquer’ that Jobs is doing to the music companies.
Next fight, the Battle of Little Big Whores, the movies…..
MW:truth
Online music subscription blows. Funny how the Record companies are asking for it…but consumers are not…
@leodavinci
Your post makes the most sense. If the market wants it – they’ll buy it. All of this academic masturbation won’t change the fact that the consumer want choices (which is what Jobs has alluded to many times) and is the driving force.