Warner Music may not renew yearly iTunes contract - report

[AppleInsider]

Steve Jobs helped save a sinking music industry by courting struggling record labels to his iPod + iTunes ecosystem, but his bargaining position hasn't been as strong when it comes to video content. As a result, some music companies are now starting to reexamine their relationships with Apple, writes the Washington Post.

In a three-page report published by the paper Thursday, the Post's Frank Ahrens steps through the turbulence facing the Cupertino-based company's media content business as it simultaneously enjoys smooth sailing on the hardware front.

"[A]fter Dec. 1, when Apple's contract with NBC expires, all shows that NBC Universal owns, past and present, will disappear from the site," Ahrens explains. "That includes shows from Sci Fi, USA and Bravo cable channels.

In a letter sent to Apple on Oct. 9, NBC Universal charged the iPod maker with breach of contract, according to the report. Although it's reported the NBC is unlikely to pursue legal action, "the two sides have stopped negotiating and there appears to be no resolution in sight," Ahrens adds.

Meanwhile, Universal Music Group -- the world's largest collection of record labels -- told Apple earlier this year that it would not renew its yearly exclusive contract and instead would go month-to-month so it could be free to deal with other distributors.

Over the past year, sales of Universal songs for cellphones around the world have soared, Ahrens says. And Universal, which has 35 percent of the U.S. music market, is now discussing deals with U.S. mobile-phone companies.

These moves and others appear to have emboldened other content providers to take a stand against Apple's stringent licensing terms. Citing a "source with knowledge of the discussions," Ahrens claims that Warner Music Group, whose contract with Apple expires at year-end, is now also considering switching to a month-to-month deal for content it offers through Apple's iTunes Store.

While some industry watchers are calling moves by NBC and others "a mistake," NBC Universal spokesman Cory Shields is quoted in the piece by the Post as saying that his company's programs are one of the primary factors that help drive sales of Apple hardware.

"The iPod is only as good as the content on it," he said.

[ View this article at AppleInsider.com ]

[cygnusrk727]

With Radiohead putting out their own album and Apple now courting artist directly, you can finally start seeing the unraveling of the present day recording industry. Apple has a chance to become the new record industry but if artist go all the way themselves then even Apple's days are numbered in the music biz.

[suhail]

"The iPod is only as good as the content on it," he said.

That's right, and the content on it can be downloaded for free.

[doemel]

They just don't get it. Could someone please sound the death knell for the major labels so everybody can move on with their life without having to deal with these miserable jerks every fcuking day?

/rant

[studiomusic]

Originally Posted by AppleInsider

"The iPod is only as good as the content on it,"

Does he remember the ipod was a huge success BEFORE video came to it?
I still don't get how they can complain that Apple is giving them a new revenue stream that exists only because of Apple and their ipod.

[rawhead]

Originally Posted by studiomusic

Does he remember the ipod was a huge success BEFORE video came to it?
I still don't get how they can complain that Apple is giving them a new revenue stream that exists only because of Apple and their ipod.

Are you shittin' me? They're thinking about all the money they *could've* made had they been smart enough (and possessed the technological prowess) to come up with Apple's business model themselves. They are friggin' envious to death of Apple/iTunes/iPod. The problem is, because the business model is already out there for scrutiny, they get the impression that maybe they COULD pull it off themselves. More likely than not they're wrong, but that won't stop any greedy bastard from trying.

[doemel]

Originally Posted by studiomusic

Does he remember the ipod was a huge success BEFORE video came to it?
I still don't get how they can complain that Apple is giving them a new revenue stream that exists only because of Apple and their ipod.

Amen! I'm so sick and tired of hearing them complain about lost revenues and then pulling off crap like this. WTF gives???

[neven]

Originally Posted by cygnusrk727

With Radiohead putting out their own album and Apple now courting artist directly, you can finally start seeing the unraveling of the present day recording industry. Apple has a chance to become the new record industry but if artist go all the way themselves then even Apple's days are numbered in the music biz.

I really appreciate and respect what Radiohead did, but their strategy is simply not viable for most every band or artist out there. Radiohead have an extremely loyal and informed following, so they can afford not to have to do the kind of marketing and distribution that most bands wrestle with. The point is, I don't see what an upcoming band (or even an established one with a weaker fan base than Radiohead - i.e. every band but Radiohead, pretty much) can learn from Radiohead's example.

[markb]

It sickens me that these content providers just dont give a @#$! about their customers. They are perfectly willing to essentially trash a great service like iTunes and offer NO viable alternative.

Case in point: Me and the wife watched Heros season one as downloads from iTunes. Tried watching season two from NBC site.....besides the really annoying forced commercials, the quality was crap and I couldnt put it on my TV. Had to watch it on my notebook.

[doemel]

Originally Posted by neven

I really appreciate and respect what Radiohead did, but their strategy is simply not viable for most every band or artist out there. Radiohead have an extremely loyal and informed following, so they can afford not to have to do the kind of marketing and distribution that most bands wrestle with. The point is, I don't see what an upcoming band (or even an established one with a weaker fan base than Radiohead - i.e. every band but Radiohead, pretty much) can learn from Radiohead's example.

Sorry, but you're simplifying things a bit here. There's more to the future music business than direct markeing a la Radiohead. Today many unknown artists get a platform on the internet and a chance to get their stuff out to the public. Just reset the clock by ca. 10-15 years and put yourself into the position of a music artists trying to accomplish this. See what I mean?

[neven]

Originally Posted by rawhead

Are you shittin' me? They're thinking about all the money they *could've* made had they been smart enough (and possessed the technological prowess) to come up with Apple's business model themselves. They are friggin' envious to death of Apple/iTunes/iPod. The problem is, because the business model is already out there for scrutiny, they get the impression that maybe they COULD pull it off themselves. More likely than not they're wrong, but that won't stop any greedy bastard from trying.

Right on the nose. It goes like this:

1. Apple approaches record companies about selling digital music in a big way. "Har!" the executives say. "This digitable model of yours amuses us! Why should we enter such a niche market? Away with you!"

2. Apple launches iPod + iTunes with a relatively small music catalog. It catches on anyway.

3. The executives now say, "well, perhaps there is something to this so-called "i-tunes". Here's some music we're sending out to every radio station in Poughkeepsie - see if you can sell it." It sells, and in a matter of years, the model becomes very, very successful.

4. The executives now go, "hey, good merchant - could you not sell this music of ours for more, or give us a bigger cut?" Apple goes, "dude, we think we have the prices pretty well figured out. Chill. It's only going to get sweeter from this point on.

5. The execs go, "Bah humbug! Then we shall launch our own service! How hard could it be? We've been in this business forever! Sure, it'll take some computer know-how and design and a radical rethinking of our current model and an ecosystem that supports our store... how hard could it be? Har!"

The optimistic view for the future is, they realize they can't really do this - hopefully sooner rather than later. The pessimistic view is, while their actual sales go down, they make more per sale and they invest more money in advertising and promotions and similar dangling carrots which eventually draw begrudging crowds... and we have the same lame music distribution model we had in the pre-digital days.

[stompy]

Originally Posted by markb

It sickens me that these content providers just dont give a @#$! about their customers. They are perfectly willing to essentially trash a great service like iTunes and offer NO viable alternative.

Case in point: Me and the wife watched Heros season one as downloads from iTunes. Tried watching season two from NBC site.....besides the really annoying forced commercials, the quality was crap and I couldnt put it on my TV. Had to watch it on my notebook.

Sadly true.

[madeincupertino]

okay, i understand if NBC has a movie service comperable to iTunes (you can download it, keep it, move it around between devices) maybe they might want to roll the dice.

but they don't! they are not allowing people to keep downloads, transfer between devices, etc...

the problem for warner and these other labels, movie houses, etc. is that they are not giving consumers what they want.

they are giving them less than what they want and, at the same time, trying to shift consumer behavior away from apple and towards their own solutions.

apple has a direct link to hundreds of millions of users and these media companies are trying to close the door

[waytogobuddy]

NBC: ""The iPod is only as good as the content on it," he said"

ME: Paying fair prices on itunes was good. Take that away. free content I can keep (torrents) are better. And will happily fill ipods. Obvious they are trying to control the distro market, but jsut ain't going to happen. iTunes was also a content aggregator, when will the Media get it?

[neven]

Originally Posted by doemel

Sorry, but you're simplifying things a bit here. There's more to the future music business than direct markeing a la Radiohead.

That's what I'm saying. My post was simply pointing out that the model of 'In Rainbows' doesn't really signal any sort of sea change in the industry, as the previous poster had implied.

Originally Posted by doemel

Today many unknown artists get a platform on the internet and a chance to get their stuff out to the public. Just reset the clock by ca. 10-15 years and put yourself into the position of a music artists trying to accomplish this. See what I mean?

I'm afraid I don't. Internet marketing is becoming the same as other marketing - reset the clock by 10-15 years, and there's so much of it on the Net (much of it "viral", or whatever sneaky scheme we'll have then) that a small artist again can't compete. You think that posting a funny video on YouTube will make stars of more than a handful of lowest-denominator indies in 10 years, when large companies are pumping loads of money into the same channel?

[nagromme]

Yearly contract or no, and temporary posturing/withdrawals aside, the big content providers will keep dealing with iTunes because it makes them increasing amounts of money. And they'll deal with other online music stores too. Nearly all of which will flounder, but competition is good. The ones that emerge as successful will be those that move towards DRM-free and really high quality. Like Amazon MP3 Store, and especially iTunes. All of those songs will play on iPods and non-iPods alike, and can be managed through iTunes.

Meanwhile iPods--Apple's real money-maker in music--will continue to sell through the roof. If anything, the emergence of other iPod-friendly stores like Amazon will HELP Apple, not hurt them. A major label could go ALL-Amazon and not iTunes and people would STILL buy iPods to play those songs.

Now, if a major label goes all-Microsoft, all-Windows-Media, I don't expect that to work out well for anyone. It would be a short-lived experiment, and their catalog would then be back on the iPod (whether on iTunes or not). And right now we're not talking about anything even THAT serious--just a non-renewal of contracts and exclusives, not pulling of music from iTunes.

The industry is changing, and Apple may not get yearly commitments as easily. But they'll still sell more iPods and more music downloads than ever before, they'll still get exclusive promo deals, and the whole situation will still get better and better for Apple AND for consumers AND for the music labels themselves--whether they fight the changes or not. And video content owners will come to catch on too.

[neven]

Originally Posted by madeincupertino

okay, i understand if NBC has a movie service comperable to iTunes (you can download it, keep it, move it around between devices) maybe they might want to roll the dice.

but they don't!

Very true. I'm really hoping that media companies don't do this, but I can totally envision a future where they're offering a crappy store with crappy content that's confusing to find, organize, and use - and it actually sells. If they sell it ONLY in this way, and if enough of them do it, the elegance of Apple's iPod + iTunes system might take a back seat.

[breeze]

Originally Posted by rawhead

Are you shittin' me? They're thinking about all the money they *could've* made had they been smart enough (and possessed the technological prowess) to come up with Apple's business model themselves. They are friggin' envious to death of Apple/iTunes/iPod. The problem is, because the business model is already out there for scrutiny, they get the impression that maybe they COULD pull it off themselves. More likely than not they're wrong, but that won't stop any greedy bastard from trying.

That's why they call it : second guessing, or if you like : Monday morning quartebacking...

[doemel]

Originally Posted by neven

That's what I'm saying. My post was simply pointing out that the model of 'In Rainbows' doesn't really signal any sort of sea change in the industry, as the previous poster had implied.



I'm afraid I don't. Internet marketing is becoming the same as other marketing - reset the clock by 10-15 years, and there's so much of it on the Net (much of it "viral", or whatever sneaky scheme we'll have then) that a small artist again can't compete. You think that posting a funny video on YouTube will make stars of more than a handful of lowest-denominator indies in 10 years, when large companies are pumping loads of money into the same channel?

I see we understand each other. My point is, that music today, and in the future, finds its way through channels that the majors can't control anymore because the channels are evolving too quickly and the behemoth labels are always playing catch up with their yesteryear's mindet.

[melgross]

It's an oversimplication to think that what's happening doesn't matter to Apple. Of course it does.

Perception is very important. The average consumer doesn't understand what's happening any more than some here There is a political threat going on. I've said that others might try to duplicate what Universal is doing, and quite a few here said that it would never happen. Well, it is.

These companies, whether we think they are right or wrong, want to control how, and for how much, their content gets sold. They have that right, just as Apple has the right to ty to force them into their mold.

We really don't know what the future will bring, and we don't know if prices will really go up. But, if the masses get the idea, correct or not, that content may be leaving iTunes, that could hurt Apple.

[SpamSandwich]

This is the time for Apple to join forces with production companies (just like Netflix, Sundance, Starbucks, et al, are doing) and co-create content... and like Madonna is doing, Apple could co-sponsor tours.

No biggie.

[Feynman]

I see the industry going full circle.

● They (music industry) is going to listen to the plea's and open up music to non DRM formated files.

● They do not renew their contracts with Apple and be selfish and create their own system.

● Users will get frustrated and begin pirating music again (or a lot more).

Apple is the only company that get's it.

[melgross]

Originally Posted by SpamSandwich

This is the time for Apple to join forces with production companies (just like Netflix, Sundance, Starbucks, et al, are doing) and co-create content... and like Madonna is doing, Apple could co-sponsor tours.

No biggie.

That won't work. All Apple could do would be to get involved in a few of these events, not nearly enough to make a difference. And it would still require them to deal with content companies. There is no guarantee that small companies wouldn't take a look at what the big companies are doing, and demand the same things from Apple.

I think people are becomming sophisticated enough to deal with differencial opricing, as long as the differences aren't too great.

In fact, I think Apple should embrace what the content companies want. If it succeeds, then no skin off Apple's nose. If it fails, then the companies will know that their ideas were wrong.

If the people who think that the iPod's sales will continue at the same pace even if content leaves iTunes, then they should feel the same way if content prices on iTunes varies. Ther is no logical reason not to.

Apple should allow the content companies have their way, with some provise that if it fails, they will re-negotiate. I can't see them disagreeing with that, as it's what they would want to do anyway.

[sandro]

Warners, NBC and Universal can go and try to reinvent the wheel, if they want. Good luck to them, they'll need it. They have forgotten what the online market was before the iTunes store, nonexistent.

I am not going to pay more for music or video than I do on iTunes. When I purchase music I will always check iTunes first, then maybe Amazon MP3, and then P2P. If the content publishers don't want to make it easy for me to buy their content, I won't buy it, end of story. If they make it hard for me to put it in my iPod, I won't use it. They seem to think we can't live without their crappy content. They need to wake up, realize this is the 21st century and that they ain't the only show in town no more. Before the iTunes store, piracy ruled the market. Piracy hasn't gone away and will no doubt redouble if the content providers start abusing their customers again. With You Tube and all the user created video content on the web, people can get free entertainment easily. The old school content providers have to be very careful, once they alienate their customers and these former customers in turn, find other sources of free content, they will likely be lost forever. The old school content providers may rue the day, that they abandoned the iTunes store. I hope they learn the hard way not to take their customers for granted.

The iTunes customers are some the few people left who are still willing to pay for the convenience of buying music. Once Warner, NBC, Universal and Sony BMG piss us off, who is going to buy their content? Do they think that punishing us and making it harder for us to get their content is a good business model? I'd do some market research on that, if I were them. I hope they don't see the light, I can't wait till they go out of business.

[melgross]

Originally Posted by Feynman

I see the industry going full circle.

? They (music industry) is going to listen to the plea's and open up music to non DRM formated files.

? They do not renew their contracts with Apple and be selfish and create their own system.

? Users will get frustrated and begin pirating music again (or a lot more).

Apple is the only company that get's it.

Don't think that all of that will happen so certainly. If Amazon's service does even moderately well, other companies will join it with the same pricing and DRM-free content. If they also don't offer that DRM-free content to Apple, what do you think will happen?

While I don't think that most people give a rat's ass about DRM one way or the other, those who do, will flock to Amazon.

But, Amazon is being cagy about all of this. They are are sellers of Apple's products as well. They certainly don't want to take the chance of losing that. They've arranged songs sold on their site to be very iTunes friendly, even using an iPod as the picture they have as they symbol for a music player.

And don't forget that Amazon has a very strong internet presence. They aren't some pirate organization trying to go straight.

[vondur]

Originally Posted by neven

I really appreciate and respect what Radiohead did, but their strategy is simply not viable for most every band or artist out there. Radiohead have an extremely loyal and informed following, so they can afford not to have to do the kind of marketing and distribution that most bands wrestle with. The point is, I don't see what an upcoming band (or even an established one with a weaker fan base than Radiohead - i.e. every band but Radiohead, pretty much) can learn from Radiohead's example.

Many bands have really strong fanbases, and these bands are typically the cash cows for the record industry. Once these bands see how much money can be made from going without a label,and dealing direct to their own fans, there may be a mass exodus of bands from labels. Bands make almost no money from record sales presently. Labels are now trying to get bands to agree to share profits from money made from touring, which the bands are loathe to do. If record labels went back to doing what they should be doing, ie selling records at reasonable prices and various media types, at the same time giving artists their fair share, I would have no problems with them. The labels seem to think that they have a god given right to their non functional business plans.

[melgross]

Originally Posted by sandro

Warners, NBC and Universal can go and try to reinvent the wheel, if they want. Good luck to them, they'll need it. They have forgotten what the online market was before the iTunes store, nonexistent.

I am not going to pay more for music or video than I do on iTunes. When I purchase music I will always check iTunes first, then maybe Amazon MP3, and then P2P. If the content publishers don't want to make it easy for me to buy their content, I won't buy it, end of story. If they make it hard for me to put it in my iPod, I won't use it. They seem to think we can't live without their crappy content. They need to wake up, realize this is the 21st century and that they ain't the only show in town no more. Before the iTunes store, piracy ruled the market. Piracy hasn't gone away and will no doubt redouble if the content providers start abusing their customers again. With You Tube and all the user created video content on the web, people can get free entertainment easily. The old school content providers have to be very careful, once they alienate their customers and these former customers in turn, find other sources of free content, they will likely be lost forever. The old school content providers may rue the day, that they abandoned the iTunes store. I hope they learn the hard way not to take their customers for granted.

The iTunes customers are some the few people left who are still willing to pay for the convenience of buying music. Once Warner, NBC, Universal and Sony BMG piss us off, who is going to buy their content? Do they think that punishing us and making it harder for us to get their content is a good business model? I'd do some market research on that, if I were them. I hope they don't see the light, I can't wait till they go out of business.

Your argument isn't very impressive. Show us where they are charging more? They aren't. In fact, they forced Apple to LOWER prices. That was a first. And don't think that Apple didn't do that because they were concerned about this new DRM-free service from Amazon, because you would be wrong about that.

People like you are a very small minority. The general public simply isn't interested in these battles. All they want is to get their content. If it isn't on iTunes any longer, they will get from where i'ts gone. Don't think otherwise.

[Porchland]

Originally Posted by cygnusrk727

With Radiohead putting out their own album and Apple now courting artist directly, you can finally start seeing the unraveling of the present day recording industry. Apple has a chance to become the new record industry but if artist go all the way themselves then even Apple's days are numbered in the music biz.

It will be interesting to see whether Radiohead platforms the new album to iTunes for some exclusive period before making it available on CD; the choose-your-own-price deal has been a good stunt, but it's not going to last forever.

I would love to see more artists control their own catalogs and then make deals with iTunes, Amazon, distributors, etc., on their own terms.

[desarc]

If any of you owned warner music you would be singing a completely different tune.
imagine you sell product X until everyone learns how to get it for free, then a company comes along and says it can convince people who are getting your product for free to pay for it. you play along until you realize that you're stuck working with a monopoly [how far is iTunes from a monopoly?] you want competition, and someone [amazon, napster, etc] comes along and says they'll play the way you want them to. WHAT WOULD YOU DO?

Jobs needs to realize that consumers aren't morons. sure 99 cents a song is simple, but i don't complain because every book at the bookstore isn't the same price. i can figure out for myself how much a song is worth to me personally. somewhere between 59 cents for the B sides and 1.29 for a new release sounds fair to me.

If labels keep jumping ship, Apple is going to have to go after Musicians themselves in a HUGE way - maybe they can buy apple records and sign musicians for iTunes only distribution... then they can take ALL of the Record Label's coin.

[Porchland]

Originally Posted by melgross

Your argument isn't very impressive. Show us where they are charging more? They aren't. In fact, they forced Apple to LOWER prices. That was a first. And don't think that Apple didn't do that because they were concerned about this new DRM-free service from Amazon, because you would be wrong about that.

People like you are a very small minority. The general public simply isn't interested in these battles. All they want is to get their content. If it isn't on iTunes any longer, they will get from where i'ts gone. Don't think otherwise.

That will only be true if consumers accept those new distribution outlets. I think his argument is that Apple will continue to have enough of a critical mass of players on the market that if NBC Universal or whoever else drops out of iTunes, a big chunk of the iTunes consumers will not follow them.

Apple and Disney have a strong enough relationship with Disney that "Desperate Housewives," "Lost," etc., will continue to be fixtures in the iTunes Store, and other content providers will want to be right beside them. NBC Universal is missing the fact that it's very early in the electronic distribution game to be scratching options off the list.

Also, NBC.com isn't much help if no one watches the shows anyway. iTunes Store gives content providers the kind of exposure they can't drum up on their own.

[melgross]

Originally Posted by Porchland

That will only be true if consumers accept those new distribution outlets. I think his argument is that Apple will continue to have enough of a critical mass of players on the market that if NBC Universal or whoever else drops out of iTunes, a big chunk of the iTunes consumers will not follow them.

Apple and Disney have a strong enough relationship with Disney that "Desperate Housewives," "Lost," etc., will continue to be fixtures in the iTunes Store, and other content providers will want to be right beside them. NBC Universal is missing the fact that it's very early in the electronic distribution game to be scratching options off the list.

Also, NBC.com isn't much help if no one watches the shows anyway. iTunes Store gives content providers the kind of exposure they can't drum up on their own.

Let's not kid ourselves about this.

This is a far bigger problem for Apple than most people can seem to see.

While some think that Apple's interest here is in selling iPods, that's only part of Apple's strategy.

Look at what they're doing. first iTunes moves to the PC (that's after Quicktime, allowing PC users to play its content). Jobs proclaims that iTunes is the largest program base on the PC.

Then Apple ports Safari over to the PC.

We hear constantly that the "halo" effect is bringing Windows users to the Mac computer platform.

This quarter, computers again, after a while, counted as 50% of Apple's sales.

Do you see a trend here?

Itunes is a very important element of Apple's strategy of getting Windows users to find Apple's software, and other products, as being desirable, and therefore to nudge them over into buying a Mac when they want to replace their present computer.

If iTunes ends up with less content that competing services such as Amazon's, people will find less use for that product, and will have less interest in using Apple hardware.

Look at what's happening to 10.5. Even though many comments here have been that they aren't too happy about the iTunes metaphor taking over the GUI, Apple is doing it anyway.

Why is that?

It's because, in part, Windows users are familiar with it, and if they go to an Apple store, or Mac dealer, and see that familiar interface on the OS, they will feel much more comfortable with it, and will be more likely to want to buy that Mac.

But, if they start moving away from iTunes, that won't happen. And they will start moving away if Apple ends up with less content.

The adage that "content is king" is as true today as it ever was.

Companies are not sitting still, they will find ways to enable users to get their content in ways that they will be willing to do so.

My wife and I watch the Sci-Fi channel. Our DVR just died, and all of the content died along with it. Normally, we will buy shows from iTunes if somehow we miss it. If that's no longer going to be possible, we will find other ways, and places, we can buy those shows. We won't be the only ones. Apple will lose big from this.

It's not the first time that Job's rigidity has cost him. I fear it won't be the last.

[Techboy]

"The iPod is only as good as the content on it," he said.

Haha, we have another brain child here. Where was he when iTune started? So which came first? chicken or the egg?

Right now, iPod/iTune is a proven and established technology. Anyone of these so-called "content provider" thinks they should/could reinvent the wheel without taking a big hit are kidding themselves.

It's not just the price of content that matters to end users but the ease of the technology as well. Take a look at how many other portable devices that can play digital music and video on the market, how many of these are easy to use for your non-geek users and still has a big coolness factor in the public?

Apple is selling iPod/iTune as a life style not just a mere digital player and this is what these content providers don't get. No one drops down $400 for an Xbox or $600 for PS3 just to play video games. It's a life styles, a proven machine that comes with great games makes that life style more enjoyable. PS3 would have been leading Xbox and Wii if Sony isn't trying to force Blu-Ray down everyone's throat. This isn't what Apple is doing.

The adage that "content is king" is as true today as it ever was.

This is only true, if and only if, content is good quality. Assuming it's so good that people are willing to pay for it.

[initiator]

Originally Posted by neven

Right on the nose. It goes like this:

1. Apple approaches record companies about selling digital music in a big way. "Har!" the executives say. "This digitable model of yours amuses us! Why should we enter such a niche market? Away with you!"

2. Apple launches iPod + iTunes with a relatively small music catalog. It catches on anyway.

3. The executives now say, "well, perhaps there is something to this so-called "i-tunes". Here's some music we're sending out to every radio station in Poughkeepsie - see if you can sell it." It sells, and in a matter of years, the model becomes very, very successful.

4. The executives now go, "hey, good merchant - could you not sell this music of ours for more, or give us a bigger cut?" Apple goes, "dude, we think we have the prices pretty well figured out. Chill. It's only going to get sweeter from this point on.

5. The execs go, "Bah humbug! Then we shall launch our own service! How hard could it be? We've been in this business forever! Sure, it'll take some computer know-how and design and a radical rethinking of our current model and an ecosystem that supports our store... how hard could it be? Har!"

The optimistic view for the future is, they realize they can't really do this - hopefully sooner rather than later. The pessimistic view is, while their actual sales go down, they make more per sale and they invest more money in advertising and promotions and similar dangling carrots which eventually draw begrudging crowds... and we have the same lame music distribution model we had in the pre-digital days.

Exactly. I couldn't have said it better. The execs are idiots.

[pixelcruncher]

Of course these companies are going to opt out of iTunes and open up their own shops. More money for them. Makes sense. But they'll always need portals like iTunes because who the hell can remember what label your favorite artist is on? Apple will simply chage it's business model to linking to music rather than hosting it. Let them deal with DRM and pricing and hosting and all that other crap. A wireless iPod and iTunes will remain the easiest way to quickly find your music and purchase it.

[Dorotea]

To Content Providers:

I purchase from iTunes because:

1. Great at displaying content in a user friendly way.
2. I want to purchase music / video and not rent it.
3. I don't want commercials. - my time is precious.
4. I want to be able to play on multiple systems (appleTV/tv, etc)
5. SIngle source to retrieve purchased content.... I don't want my cc info in too many hands on the internet.
6. I believe in paying for my entertainment.
7. Pricing is simple. I don't have to pay a lot of attention to prices --- I know for the most part the $$ are consistent. (I do a lot of late night purchasing when attention isn't too good).
8. Extremely easy.

If content providers don't put content on iTunes I can:
1) Record my own content from cable via Elgato products and/or tivo.
2) Put content in iPod/AppleTv format in same manner.
3) Stop watching/listening.
4) Start paying much more attention to other types of on-line content - You Tube etc.
5) Go out and get more excercise.
6) Purchase CD's.
7) Swap CD's.
8) Live entertainement.
9) Start my anti-content web site.
10) And the list goes on. .......

I am 50. I want to pay for content. I want others to be compensated for what I consume. So I hope some reason comes into the picture.

Thanks for this forum.

[quinney]

Originally Posted by melgross

Let's not kid ourselves about this.

This is a far bigger problem for Apple than most people can seem to see.

...

If iTunes ends up with less content that competing services such as Amazon's, people will find less use for that product, and will have less interest in using Apple hardware.

...

My wife and I watch the Sci-Fi channel. Our DVR just died, and all of the content died along with it. Normally, we will buy shows from iTunes if somehow we miss it. If that's no longer going to be possible, we will find other ways, and places, we can buy those shows. We won't be the only ones. Apple will lose big from this.

...

so are you switching to a PC?

[fraklinc]

this is music to my ears, so they will still be on itunes but not just on a exclusive contract! perfect that means there goin to force itunes to DRM free there music if it has not done so, so it can be leak all across the web, then i get it for free, and they will still be on itunes, so i can get my album covers for free also, lol perfect

[melgross]

Originally Posted by quinney

so are you switching to a PC?

Silly question as it has nothing to do with this.

[quinney]

Originally Posted by Dorotea

To Content Providers:

I purchase from iTunes because:

1. Great at displaying content in a user friendly way.
2. I want to purchase music / video and not rent it.
3. I don't want commercials. - my time is precious.
4. I want to be able to play on multiple systems (appleTV/tv, etc)
5. SIngle source to retrieve purchased content.... I don't want my cc info in too many hands on the internet.
6. I believe in paying for my entertainment.
7. Pricing is simple. I don't have to pay a lot of attention to prices --- I know for the most part the $$ are consistent. (I do a lot of late night purchasing when attention isn't too good).
8. Extremely easy.

If content providers don't put content on iTunes I can:
1) Record my own content from cable via Elgato products and/or tivo.
2) Put content in iPod/AppleTv format in same manner.
3) Stop watching/listening.
4) Start paying much more attention to other types of on-line content - You Tube etc.
5) Go out and get more excercise.
6) Purchase CD's.
7) Swap CD's.
8) Live entertainement.
9) Start my anti-content web site.
10) And the list goes on. .......

I am 50. I want to pay for content. I want others to be compensated for what I consume. So I hope some reason comes into the picture.

Thanks for this forum.

They are perfectly happy for you to do 6)

[quinney]

Originally Posted by melgross

Silly question as it has nothing to do with this.

thank you, but wasn't your point that losing content from the iTunes store
would cause Apple to lose computer sales?