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The battle may be won, but the war with the record labels is far from over.

I keep wondering why we never hear about record companies wanting to raise the price of rental services such as Napster

"solidify iTunes' position as the Microsoft of the digital-music industry"

what an insult! iTunes works, and is not riddled with worms or vira!!

Time to start an iTunes label. I bet at least 60% of artists currently on iTMS would be willing to leave their label to join up. Imagine instead of $0.02 per song sold, they can make $0.30. CD sales are in decline anyway, and the labels only put big promo dollars on the famous "stars". On iTMS, they all get face time and everyone gets their 30 seconds of fame (previews). Also, wouldn't starting an iTunes lable absolve Apple Computer of any conflicts with Apple Corp? Just a thought.

MW: hold. Steve is indeed holding all the cards.

They should payoff apple corps(beatles) to settle and then start a music label. i would garentee that they would get more than 50% of the worlds recording artist within 10 years. Cut those greedy bastards(music labels) out of the picture.

Mind how you go Steve. You're becoming seriously dangerous to some pretty high players. We don't want to get the Mob involved.

PT, that's a good idea. I think that can solve the problem with the various iTMS having different catalogs. If the artists sign up with itunes label, they can be on ALL the iTMS and expose themselves to even more customers. I for one would love to be able to buy songs from the UK and Japanese stores. Didn't some Japanese artists break contract with Sony to put their songs on iTMS? This thing can really happen! And when it does, I'm putting all my $ into their stock.

By constricting the availability of flash memory Apple is actually doing these other companies a big favor. If more memory was available they'd build large amounts of terrible players that would go unsold during the holiday season and then require big write offs for unsold inventory. Apple is simply helping keep those other MP3 companies out of the red ink (or less red ink...).

Barry, I bet most of the mobsters already own hefty amounts of AAPL as advised by their money cleaners, i mean financial advisors. Even if the music labels go down, they would still make money hand over fist.

MW: federal. Doesn't take a federal case to see the mob's behind the labels.

to those clamoring for an iTunes label - the day Apple announces that is the day the Big Five pull their content from iTunes. That's all they can do. Even if it is ten years from now and they have to use iTunes to sell music, they will partner with someone else. In the end, iTunes without a product to sell is just a webservice.

MDN word: most

i agree; it's time for Apple to make the move: buy out Apple Corps, which would shut up the Beatles and put their catalog on iTunes. then, create the Apple iTunes label. little edgar will soon be looking for other employment. i buy music to support the artist, not the labels.

Let the record labels increase the price for music downloads and you can say goodbye to the music download business in one fell swoop.

Raise the prices and everyone will go back to illegal downloading - it's as simple as that!

Music is now a comodity that people are NOT willing to pay a premium for.

The days of Record companies charging £16 for a chart album are gone and so are the days of Record companies being greedy.

It's a simple equation:

Give consumers what they want. at the right price and you will make a fortune. Get greedy and you will lose a fortune (and all your customers!).

EMI, SONY, etc better listen to Steve Jobs!!

"Also, wouldn't starting an iTunes lable (sic) absolve Apple Computer of any conflicts with Apple Corp?"

Yep...all the lawsuits against Apple Computer for breaking their agreement not to use the Apple trademark in music-related activities would instantly disappear.

In other news, something just fell off the turnip truck again.

Barry,

Good point. I'm sure the music industry is riddled with people in the Mob. I hope nothing happens to his Steveness!

That where the record companies lost thier money, In the rental services like Napster and others. You pay one price per month and download your heart out. But if you can find a way to keep it and they have, the record companies are losing and crying. So they know ITune can make them money, so they are trying to pressure Steve.The record companies have been stealing the money from the artist for years and now this.The record companies are very greedy. GREEDY get you nowhere, Ask ENRON

Everything in the universe is George Bush's fault.

Agree with PT too, but for now...
This is an opportunity for Apple and record labels to increase the equity of iTunes. Add better quality (lossless) files for a premium. It doesn't "cost" anybody any more to produce, and everybody wins, including the consumer.
Steve needs to appease the labels a little bit, iTunes is still a baby. He needs to be more flexible with his negotiating. It doesn't have to be defined as "greed" (bad word), as long as they keep the .99¢ option people will be happy and iTunes will thrive.

Play ball Steve, just play a strategically.

I agree with TreeHuggingIdiot - this is Bushs fault. The government dropped the ball on this.

Read all about the DIMWITT Edgar Bronfman Jr. here

http://slate.msn.com/id/1862/


(it's near slanderous and he's rich, so we will let Microsoft take the heat)

Kerry, don't make me smack you.

George Bush can do no wrong.



(where the fsck did your comment come from, "Liberal", other than out your wazoo?)

Now back to uor regularly-scheduled commenting, hopefully...

I don't think other companies will have a problem putting players on the shelves. I think the big problem for them will be getting them OFF the shelves. They are just gonna be gathering dust.

With regards to the war being already won with the labels. I hope he is right but you should never underestimate their capacity for stupidity.

Hesseldahl writes, "The more iPods sold, the more people will be patronizing the iTunes Music store."

Isn't everyone going to start flaming this guy? Where's the "It's the software stupid" rants?

This is a very good article, and points out some interesting bits of information about Flash Memory suppliers. My only quibble is with this quote...

A strong quarter of iPod sales will only solidify iTunes' position as the Microsoft of the digital-music industry, leaving RealNetworks, Napster, and others to bring up the very distant rear.

"the Microsoft of the digital-music industry"? We already have a "Microsoft" involved in the Digital-Muisc Industry...and it sucks right now! There has to be a better comparison than comparing iTMS to Microsoft, right? Otherwise, that sentence is about as accurate as I've seen written about the Online Music War.

MW: river - as in "Cry me an iRiver."

http://faultgame.com/images/thatsall.wav

“…the Microsoft of the…”

Funny, isn’t it, how my company is synonymous with so many other words? Monopoly, ass-h*les, d*ckheads, mother-fsckers…

On our wedding night, my wife found out why it’s called microsoft.

“to those clamoring for an iTunes label - the day Apple announces that is the day the Big Five pull their content from iTunes. That's all they can do. Even if it is ten years from now and they have to use iTunes to sell music, they will partner with someone else. In the end, iTunes without a product to sell is just a webservice.”

Not necessarily. In ten years (and probably less than that), the atom method of distributing music (i.e. CD’s) will probably be all but dead. When the InterNet becomes their cash cow, and if Apple is still the dominate player, the labels would be cutting their own throats by doing so.

I think Apple will eventually make such a move. It’s all a question of timing. Already Sony artists in Japan want to jump ship and sign with Apple directly. The handwriting is on the wall already.

Jayplus, why would anyone flame a guy for writing "[t]he more iPods sold, the more people will be patronizing the iTunes Music store." That is a true statement. Many people buy an iPod and then discover the integrated advantages of the iTMS and iTunes. It's the same logic as: "The iPod drives people to iTunes, not the other way around," which follows the first quote. Both are true. I agree that "it's the software, stupid" is a big driver of the relationship between the computer hardware and the user but it is not the same dynamic that is driving iTunes and iPods.

MW: yes

MacDailyNews,

I think there needs to be an investigation on why Apple is getting hounded on the $.99 price issue when Microsoft's own MSN Music is also pricing songs at $.99!

http://music.msn.com/

Why are the Record Labels beating on Apple and not any of the other online digital music stores??!

Why would the record labels leave iTunes if Apple (on an extremely unlikely, ill-advised whim) created their own record label?

The other labels allow Sony's download service to sell artists other than Sony artists. When it comes to making money, the labels are not picky about who they sleep with. And they're so f'n lame-brained, they usually don't remember who they slept with the night before.

The labels never learn from history and they have no concept of the future.

DudeMac,

No, there doesn't need to be an investigation. People are hounding Apple because their contract negotiations are coming up. Other services started at different times, so the time to try to renegotiate prices with them hasn't yet come.

TreeHuggingLiberalIdiot

Everything in the universe is George Bush's fault.

Surely he's not responsible for strawberry icecream. I like strawberry icecream.

First, if Apple Computer becomes a record label, they become absolutely and undeniably guilty of exactly what they weren't supposed to do per their agreement with Apple Corps. As it stands, iTMS as simply a music distributor gives Jobs & Co. a bit of leverage with semantics and "differing interpretations" of their agreement.

Secondly, labels do more than just distribute music. They provide studios, equipment, additional musicians, etc., for production of music. Labels have networks around the world for services including recording, production, distribution and promotion. Do you really think Apple Computer is capable of all that?

I'm not defending the labels by any means, but I'm not sure Apple Computer is prepared to launch an entirely new business outside the scope of what they do now.

Justified asked if Apple could provide a studio. Well, from what I have read the majors "rent" the studios to artists, at the rate of thousands of dollars per hour. They do this in the form of an advance in pay. If a band takes a couple of months to record a CD, they are into the label for millions in rent on the studio. Its one of the many ways labels use to control the artist, and direct the biggest chunk of any revenue back to the label.

The RIAA and its major member labels are probably terrified with the position of Apple. Apple now has a much better distribution system than the labels do. With Apple's hardware and software, the need to spend alot of expensive studio time is greatly reduced. In fact, just a couple days of studio rent would get a band some G5 towers with nice displays and great software. They can take as long as they want and as many times as they need to record and redo tracks. They can play and get a feel for new ideas and experiment on their own before delivering the tracks to the studio engineers for the final mix down. Apple has eliminated a huge chunk of revenue and label leverage over the artist.

They labels are scared, they have seen the future, and its internet distribution and artist controlled computer studio recording. In other words, its not them.

"Justified asked if Apple could provide a studio."

Actually, that's oversimplifying. The question is: Is Apple Computer prepared to launch an entire new leg of business as a record label — with activities that would include, but not be limited to, providing (or renting) studios, equipment and session musicians; post-production, distribution (iTunes being only one method), licensing and rights management, project management, project promotion, and more.

In this article, the music companies are actually sense. Sure, 99-cents for any song is simple, but what's wrong with a multiple price structure? Most songs would still be 99-cents, but new releases from the most popular big-name artists could fetch a premium price like $1.19 or $1.29. Conversely, older catalog titles and songs from lesser known artists could sell for bargain prices like $0.79 or $0.69. Not every song is equal in value, so it would be totally appropriate for some songs to cost more or less than average.