Apple planning ad-funded iTunes?

“If you’re not a music industry executive, you probably haven’t spent much time perusing the documents from the recent UK Copyright Tribunal’s decision on online royalty rates for music publishers. But some people have, and they’ve turned up evidence that Apple is maybe planning to introduce ad-funded music on iTunes,” Stuart Dredge reports for Tech Digest.

“The Tribunal’s decision quotes witness evidence from iTunes VP Eddie Cue, where he states that Apple would only pay advertising revenue where ‘that revenue is earned as a result of an advertisement, sponsorship or a click-through link located on a Licensed service … and only where the Licensed Service is offered to the User at a price which has been artificially depressed to reflect such revenue,'” Dredge reports.

Full article here.

27 Comments

  1. Mr. Peabody: 13% of 70% is 9.1%.

    Apple does get $0.29 of the $0.99. But Apple is also responsible for the infrastructure to deliver the music and collect the payments. And Apple also has to put up with the labels (at least for now). Apple should put more effort into independents – that will make the labels and middlemen fade away even faster.

  2. “Is distribution such a mystery science that only a select few can figure it out, or is it that you simply are not allowed to get you’re music out without going through the establishment?”

    Mr. Peabody,
    Actually the “mystery” (or problem as it might be) of distribution is that one MUST go through the establishment. The establishment IS the channel. The establishment IS the network.

    Right or wrong, that’s the predicament of the music business.

  3. This is not new, this has been Apple’s stand for years. If a product or service generates Ad revenue then the price to the customer for that product or service is reduced to reflect the revenue generated by the ads. This as been Apple’s position since the e-World days.
    It does not mean that Apple is going to start ad sponsored free music. But, it might mean that Apple is looking to bring more of a traditional record store positioning to the labels for iTunes. Were by Apple would except differential wholesale pricing on the music, But Apple would require them to provide Advertising & marketing Dollars for promotion of their Artists and the Songs/Albums in iTunes, just like the labels pay music retailers for posters, flats, end cap, special or wall display space etc (most retailer earn more in promotions income from the Labels then they make from actually selling the music itself). Apple would then use the Advertising income from the labels to off-set the final retail pricing of the music. In simple terms let the labels think they are getting what they want control of iTunes pricing. But, in the end Apple would just equalize everything by off-setting the higher prices with the advertising revenues from the Labels.
    The Labels don’t understand the value of the current Apple EMI deal. They just want to suck every penny out of on-line customers as they can. Not because it’s good business but, because they (the labels) think they are entitled to do it, after all if you use the internet you’re guilty of stealing the money from their pockets. Which is a crock of sh*t. Current 8 biggest Labels need to go out of business or the Government needs to close them for rackettearing violations, price fixing, and conspiracy to defraud. Then all rights should return to the performer in full without attached restrictions. But, this is just my opionion.

  4. @ Peabody Prince recently distributed his latest album via the Sunday Mirror Newspaper, FREE to the newsreaders who bought the newspaper.

    He is alleged to have been paid One million dollars which apparently is alot more than he would have got from the Record Label Industry for the amount of CD’s distributed on that one day.

    That tells you something about that industry!

    The idustries spokes-people made an outcry that that was devalueing music, that people would start to demand to recieve free music that way, in truth, they were probably worried that new artists might be given the idea that they do not need the major labels after all, since precedents were being set to prove that.

    Rockefella or however you spell his name, proved that music will merchandise any product and went on to do it himself after having his proposals turned down by the very people who had cashed in on his marketability, the rest is history.

    Capitalism is good as a channel provider if those who wish to capitalise on it can make use of its ability & flexibility.

    Them bastards who have fattened themselves up on the musical cake would rather keep the status quo than exploit new channels, particularly if those channels demand that the bigger slice is dished out to the creator of the music rather than to the delivery boy/girl/man/woman/person that is the recording industry.

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