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Fri, Nov 20, 2009 - 07:08 PM EST  —  AAPL: 199.92 (-0.59, -0.29%)  |  NASDAQ: 2146.04 (-10.78, -0.5%)

Music cartels’ relationship with Apple remains as tense and antagonistic as ever
Monday, February 02, 2009 - 08:47 AM EST

Apple Online Store"Last month the music industry and Apple, long uneasy partners, seemed a picture of harmony when they agreed on new terms for pricing on iTunes, Apple’s online music store," Tim Arango reports for The New York Times. "Behind the scenes, however, the relationship remains as tense and antagonistic as ever."

"The announcement on Jan. 6 seemed to signal a rapprochement between the music industry and its biggest distributor: record companies gave up their demand for copyright protection (called digital rights management) and Apple allowed flexible pricing, so the labels could charge more for new or popular tracks," Arango reports. "But according to one music industry executive involved in the negotiations, Apple’s primary goal was securing distribution of music over its iPhone, as mobile phones are expected to become an increasingly important outlet for music."

"Disagreements over the timing of the changes also resulted in a particularly tense conversation on Christmas Eve between Steven P. Jobs, the chairman and chief executive of Apple, and Rolf Schmidt-Holtz, the chairman of Sony Music," Arango reports. "A spokesman for Apple declined to comment, as did a representative for Sony Music. But chatter about Mr. Jobs’s combative tone on the call ricocheted around the music industry, and it was regarded as another display of his tough bargaining tactics, made possible by Apple’s position as the dominant seller of music."

"Mr. Schmidt-Holtz, wanted the pricing to go into effect right after the announcement, while Mr. Jobs wanted a longer time horizon. According to a person briefed on the telephone call, Mr. Schmidt-Holtz and Mr. Jobs had a heated exchange by phone on Christmas Eve. Eventually, Sony gave in and agreed to a longer waiting period," Arango reports.

Full article here.

MacDailyNews Take: The greedy music cartel bastages who collectively had no idea how to run their own business (besides straight into the ground) ought to be thankful Steve Jobs stepped in to save it from themselves.

Who can blame Jobs for seemingly getting impatient over tiresome haggling with a group of blooming idiots?

[Thanks to MacDailyNews Readers "Adam W." and "Nerd Beautiful" for the heads up.]

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Feb 02, 09 - 08:55 am Comment from: silverwarloc

If all are true, then too bad for Sony et al.

Feb 02, 09 - 09:03 am Comment from: Jamie

Apple: We want to sell your music for you, we have an amazing software distribution network, and all we ask is a tiny percentage.

Music Cartels: Fsck off, we want to be able to milk our victims customers, for every penny.

Feb 02, 09 - 09:07 am Comment from: NCG598

I feel bad for the Music Industry. They get what they gave the artist- their contracts take advantage of anyone they can. Too bad they get a taste of their own medicine.

cool mad

Feb 02, 09 - 10:07 am Comment from: matty g

without Steve Jobs to kick the labels into touch I really worry about iTunes' status in the music industry.

probably because we've no knowledge of others negotiating with the labels :(

Feb 02, 09 - 10:32 am Comment from: Randian

There's just something about an industry that wants to stick it to you every time you think of buying something from them. My skin starts to crawl every time I purchase a song on iTunes, knowing that some music exec somewhere hates my guts.

Funny thing, I hear: P2P doesn't hate me at all. And, yes, Limewire loves its users.

Until we all see some fscking gratitude coming out of the music industry for our LEGAL patronage, file-sharing will remain a high priority for all our musical needs . . . IMHO.

Feb 02, 09 - 10:57 am Comment from: ElderNorm

ER, what is the issue with music and the iPhone???

I can see a regular phone and music having an issue, but the iPhone is an mp3 player too.

I wonder if there is more than we are hearing??

Just a thought.
en

Feb 02, 09 - 11:02 am Comment from: Dash69

The music labels always come up with some lame excuse to try and take more and more of your money. I remember when CD's came out and the packaging was twice the size of the actual CD case. The promised that the price of CDs would drop when the packaging got smaller. Well now they are wrapped in cheap clear covering and still the prices are as high as they were years ago.

Now most of use by music over the internet, so the middle man has been eliminated. No brick stores, no packaging, and no reason to inflate the price because of possible theft; and we still pay the same or more for their music.

Feb 02, 09 - 11:35 am Comment from: Predrag

ElderNorm,

The issue with music and the iPhone is not about the file format. It is about the ability to download music, via iTunes, using mobile 3G network. Before this last announcement, you couldn't buy an iTunes song via 3G network; only via WiFi. Labels are very much aware of the fact that in the future a lot of music (perhaps most of it) will be purchased via mobile networks, using mobile devices. They were desperately trying to secure much larger share of that pie, by demanding much higher pricing per song (which was the case with all other mobile downloading through other mobile carriers, at least in the US). According to the article here, Jobs didn't want to budge, he demanded same pricing and same conditions and full, unrestricted, unconditional access to complete iTunes catalogue via 3G network, meaning complete transparency for the user (doesn't matter if it's WiFi, EDGE or 3G -- it just works). And in the end, he god it all.

I must say, I am very pleased Sony (as well as Warner, BMG/EMI, and most importantly, the biggest, baddest evil of them all, Universal) broke down and agreed. Consumer will be the ultimate winner.

Long live Steve Jobs!

Feb 02, 09 - 12:49 pm Comment from: KenC

If you read the whole article, it's nice to hear that the other Apple execs are adopting Steve's hardline negotiating stance.

Feb 02, 09 - 01:06 pm Comment from: Derek in Milan

I feel sorry for Jobs having to deal with all the numbskulls in this fractured world of ours.

Music Biz - idiots
Auto makers - colossal idiots
M$oft - morons
Politicians - greedy, transparent idiots

When I read his 1985 interview with Playboy on the 'net a few days ago, it was a timely reminder that men of his vision and simply DECENT approach to the world.

Hope getting pissed at the Sony asshat didnt stop his healing process.....

Feb 02, 09 - 01:45 pm Comment from: Bill

This could be why he didn't have time to prep himself for the January keynote - though now it looks like he wasn't so much spending time Xmas eve with family as his press release said he intended to do as he was playing last minute hardball with a holdout.

Feb 02, 09 - 02:20 pm Comment from: Demon

Of the Music Industry would pull it's heads out of each others asses long enough to see what is going on in the world of Digital distribution they might actually get a clue and learn a new way to do business. Apple drags them kicking and screaming into new more modern contracts while stuffing money into their coffers. The sad thing is all they can see is red because they've given the farm away to the big money executives and the only A&R;that they known how to do any more is, that act is hot with the young kids, quick go pump out as many acts like that as you can...

In order for these clone acts to be moderately profitable to the Major labels the have to turn them into celebrities. They do it by many methods but, my favorite is that the Labels use the Gossip mills, to pump out all kinds of stuff to increase they act's celebrity status, Good, Bad or Untrue anything to make the act more of a celebrity commodity.

My view is the Major Music labels need to go for the good of the Music Industry. The Governments of the World need to sit down at the WIPO and agree on new standardized and Global Copyright and Licensing Law.
Which would allow Online digital delivered content Retailers to dissolve the country limits and fences and sell global content on a global scale from a single store and a single license grant from the original content owner. No more agent and right's to distribute mess..

Everyone would make more money and customers worldwide would get a larger selection of content, lower prices and better service. The Online Distributors would be free from the red tape and requirements to set-up stores by country with different rules and pricing. If an on-line retailer doesn't have a store in the country then their are no sells in that country. Which increases the chances of Piracy and casual trading.

The Entertainment industry are the one's who lobbied for the overly market protectionist laws. Thinking that they would use the laws to keep prices up and protect their profits by keeping an iron grip on what got released and to whom.

The Internet and digital file sharing is a bit of a sticky wicket because the same laws that they got put into place is killing/limiting the distribution outlets for they products that they need to sell to make profits.

Feb 02, 09 - 02:40 pm Comment from: rexprimoris

Sony Electronics is still smarting from ceding the entire portable music market it had controlled for most of the 80's and 90's with the Walkman and Discman lines to Apple by failing to convert those products' considerable popularity over to its MP3 players. It must be more galling for Sony to now have to dance to Apple's tune with respect to digital music distribution.

Feb 02, 09 - 05:06 pm Comment from: ken1w

Apple holds all the cards. Apple got everything it wanted, and "gave in" on only the "tiered pricing" issue. But in reality, Apple probably wanted that change too, because it will lower the average price of songs sold on the iTunes Store.

Feb 03, 09 - 02:53 am Comment from: twilightmoon

Sony's Discman and Walkman lines never had to interface with a computer, so they never required any expertise in writing computer software or syncing between computers and digital devices.

Sony was once great at creating consumer electronics. They have NEVER been good at interfacing those electronics with computers or writing any form of computer software (not including PS games).

That Apple who was good at doing computer software and interfaces would beat up Sony was perhaps a foregone conclusion once Apple decided to play in that arena.

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