Apple, Amazon set to squeeze music labels over DRM

Posted:
in iPod + iTunes + AppleTV edited January 2014
As the newly self-proclaimed champ of consumer choice, Apple is reportedly putting the screws to music label giants in an attempt to get equally open treatment for all its songs, and on Monday received apparent help from an unexpected ally.



Following its landmark deal with EMI this month to banish digital rights management from the label's iTunes tracks, Apple is said to be flush with confidence and is pushing the other three major labels into an unenviable negotiating position, according to clandestine sources within the organizations.



Though Sony-BMG, Universal, and Warner have all to date successfully resisted calls to end the use of DRM -- with Warner CEO Edgar Bronfman infamously questioning the mind of Apple's Steve Jobs for even hinting at the change -- the companies now find themselves on the defensive. The iTunes operator is allegedly using the clout gained from the EMI contract to push for DRM-free music when royalties and variable pricing had been the focal points until April.



"EMI struck a deal that puts all of us [negotiators] at a disadvantage," claimed an anonymous executive from one of the holdout labels, who complained that EMI had signed the Apple deal in fear of seeming slow to investors.



The situation was made all the worse on Monday when Britain's paper The Times caught word of a potential Amazon deal that would also have the web retailer sell music without digital padlocks, but choosing MP3 files over Apple's preferred AAC formats.



Taking an even more bullish stance than its prospective rival, Amazon is reportedly drawing on the momentum of the EMI decision in hopes that it can secure ideal terms for its store's May debut -- even if it means dropping most major-label music in favor of EMI and independents, as the company doesn't have the safety net of protected but lower-quality DRM should talks end in failure.



In spite of how many music download stores raise the copy protection issue with the progressively isolated label trio, however, the group's greatest fear may be that one of its own will turn traitor, forcing the remaining agencies to follow suit if they don't want to be seen as lagging behind. Universal Music is especially worrisome to Sony-BMG and Warner as hints of a possible Amazon contract, combined with its lead in world music sales, could shift the battle almost entirely in favor of Amazon, Apple, and existing MP3-only shops such as eMusic.



"If Universal goes, then everyone has to follow," groused the unknown music executive.
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Comments

  • Reply 1 of 25
    jimdreamworxjimdreamworx Posts: 1,083member
    Interesting that it is Universal that holds the power.



    Wasn't there a rumor Apple was going to buy them a few years back?
  • Reply 2 of 25
    mkanemkane Posts: 41member
    DRM should be dropped because anybody with half a brain can find out how to get around it by simply searching the net.



    Apple has proved that legally bought music is a successful business model. A lower price will always defeat piracy.



    The days of music companies selling a whole CD with only 2 good songs on it for way too much $$$$ is over. No days people buy/download the songs they like and burn it to disk, ipod, zune(lol....yes I know....lol), Zen, etc...
  • Reply 3 of 25
    josa92josa92 Posts: 193member
    The use of anonymity in this article is sickening. use their names or don't use their quotes. Nora Ephron (writer of movies such as "Sleepless in Seattle" and "When Harry Met Sally") wrote a great article about this very same subject, and it drives me just as crazy as it does her.

    Read it here.
  • Reply 4 of 25
    kasperkasper Posts: 941member, administrator
    Quote:
    Originally Posted by josa92 View Post


    The use of anonymity in this article is sickening. use their names or don't use their quotes. Nora Ephron (writer of movies such as "Sleepless in Seattle" and "When Harry Met Sally") wrote a great article about this very same subject, and it drives me just as crazy as it does her.

    Read it here.



    When the source publication doesn't identify their sources, it makes it somewhat difficult for us to identify their sources It was both Reuters and UK's the Times cited unnamed sources, not us. Sorry it's so vague.



    Best,



    K
  • Reply 5 of 25
    josa92josa92 Posts: 193member
    Quote:
    Originally Posted by Kasper View Post


    When the source publication doesn't identify their sources, it makes it somewhat difficult for us to identify their sources It was both Reuters and UK's the Times cited unnamed sources, not us. Sorry it's so vague.



    Best,



    K



    Sorry to be kind of nasty, Kasper.

    I take it back, I understand the predicament.

    But the over-use of anonymity in the media bothers me.

    Sorry again,

    J
  • Reply 6 of 25
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by josa92 View Post


    The use of anonymity in this article is sickening. use their names or don't use their quotes.



    The way it works, it sounds like you want nothing, I really struggle to find an alternative explanation. Few are going to allow their name to be used attached to a rumor, so you don't want this site to have anything to do with rumors? Rumors are the very point of this site. Anonymous sources are used to get information from people whose jobs may otherwise be in jeopardy if publicly known. I think that society is worse off if news media cannot use anonymous sources, corruption would be even more pervasive.



    Quote:

    Nora Ephron (writer of movies such as "Sleepless in Seattle" and "When Harry Met Sally") wrote a great article about this very same subject, and it drives me just as crazy as it does her.

    Read it here.



    That's just a weird case, and that interview had nothing to do with specific anonymous sources, but rather vague generalizations of groups of people that hold certain opinions.
  • Reply 7 of 25
    quinneyquinney Posts: 2,528member
    Quote:
    Originally Posted by AppleInsider View Post


    "EMI struck a deal that puts all of us [negotiators] at a disadvantage," claimed an anonymous executive from one of the holdout labels, who complained that EMI had signed the Apple deal in fear of seeming slow to investors.



    In spite of how many music download stores raise the copy protection issue with the progressively isolated label trio, however, the group's greatest fear may be that one of its own will turn traitor, forcing the remaining agencies to follow suit if they don't want to be seen as lagging behind.



    The laggards criticize EMI for the Apple deal for fearing seeming slow to investors.



    The laggards greatest fear is seeming slow to investors. What hypocrisy.



    The laggards have their heads all the way up their asses. They would rather strike a

    stubbornly macho pose to the detriment of their own investors than admit that CD

    sales are circling the bowl on their way down the toilet.
  • Reply 8 of 25
    deapeajaydeapeajay Posts: 909member
    I still don't get it.



    It seems to me that the type of crowd that's buying music on iTunes is not likely to be sharing their music online anyway.



    How come we're so smart and the record companies are so dumb?
  • Reply 9 of 25
    moochmooch Posts: 113member
    Quote:
    Originally Posted by DeaPeaJay View Post


    I still don't get it.



    It seems to me that the type of crowd that's buying music on iTunes is not likely to be sharing their music online anyway.



    How come we're so smart and the record companies are so dumb?



    Maybe cause they do market research before they make decisions like that, rather than just saying, "seems to me..."?
  • Reply 10 of 25
    deapeajaydeapeajay Posts: 909member
    Quote:
    Originally Posted by Mooch View Post


    Maybe cause they do market research before they make decisions like that, rather than just saying, "seems to me..."?



    you think that's it?... possibly I suppose. I'd like to see that research though
  • Reply 11 of 25
    shookstershookster Posts: 113member
    Strange that Universal is the one they think will go DRM-free first, as one of the Universal execs said every iPod owner was a music pirate about 6 months ago.
  • Reply 12 of 25
    wallywally Posts: 211member
    Quote:
    Originally Posted by quinney View Post


    The laggards have their heads all the way up their asses. They would rather strike a stubbornly macho pose to the detriment of their own investors than admit that CD

    sales are circling the bowl on their way down the toilet.



    Or put another way:

    "Their heads are so far up their f**king asses that the lump in their throat is thier own g**damned nose"



    I love that quote.
  • Reply 13 of 25
    irelandireland Posts: 17,780member
    Quote:

    "If Universal goes, then everyone has to follow," groused the unknown music executive.



    Idiot. DRM isn't working. Stop your complaining and ditch that crap already!
  • Reply 14 of 25
    irelandireland Posts: 17,780member
    Quote:
    Originally Posted by Mkane


    DRM should be dropped because anybody with half a brain can find out how to get around it by simply searching the net.



    It's even easier than that. Just re-rip your crippled tunes.
  • Reply 15 of 25
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by Mooch View Post


    Maybe cause they do market research before they make decisions like that, rather than just saying, "seems to me..."?



    I don't know about that. They seem to be more about bullsh!t than anything else.



    For a good while, it looked like despite what they said, falling CD sales was more due to reduction of signed bands & fewer titles being released than illegal trading. They also have this dogma that one copied CD equals one lost sale when that's not the case. Maybe that's all just PR (a.k.a. lying).
  • Reply 16 of 25
    Eat that prisoner's dilemma RIAA biatches!
  • Reply 17 of 25
    tbagginstbaggins Posts: 2,306member
    Quote:
    Originally Posted by DeaPeaJay View Post


    How come... the record companies are so dumb?



    It's likely some heady mix of arrogance, technical ignorance, being pathetically out of touch with their customers, and bad aftershave.



    Seriously, the music industry suits are SO screwed right now. They want the clock to turn back to the '90s, when they were riding high selling $18 CDs with only one or two good tracks on them... with little in the way of competing formats (maybe cassette tape). Those days are gone forever. How they consistently fail to grasp this is beyond me.



    But what truly astounds me is how they seem to think that if they had complete control, they would be able to remedy the situation. Can you see it now? Download prices tripled or quadrupled, the growing legit online customer segment being quashed as everyone flees en masse to the pirate sites, and CD sales still in free fall with no online sales safety net left anymore. And all the while, the core problem of an over-reliance on a very few big acts and this year's crop of one-hit wonders festers on, while the overall quality of their catalogs plummets to new lows.



    These guys are clowns. Actually, saying that is unfair to clowns. \



    .
  • Reply 18 of 25
    shetlineshetline Posts: 4,695member
    Quote:
    Originally Posted by Mooch View Post


    Maybe cause they do market research before they make decisions like that, rather than just saying, "seems to me..."?



    Kind of like the "research" that told Hollywood that the VCR was going to destroy them, that told the music industry that the CD was going to destroy them, that, even after the tremendous success video on tape was for Hollywood, told Hollywood again that the DVD was going to destroy them...



    The entertainment industry has a track record of fearing change, fearing loss of control, and fighting tooth and nail against anything they're afraid of. They may have a few legitimate concerns here and there, but it's more like a broken clock being right twice per day than a carefully researched reaction to any given situation.
  • Reply 19 of 25
    shaminoshamino Posts: 498member
    Quote:
    Originally Posted by quinney View Post


    The laggards have their heads all the way up their asses. They would rather strike a stubbornly macho pose to the detriment of their own investors than admit that CD sales are circling the bowl on their way down the toilet.



    It's a case of rampaging egos, pure and simple.



    To agree to sell without DRM today would be admitting that they were wrong to insist on it in the past. Admitting a mistake is the one mortal sin no egomaniac will ever transgress. While we would all (or mostly all) read it as "that didn't work out, so we're going to try something else", they would see it as "we were a bunch of complete screw-ups, and since we can't be gods, there's no point in even breathing."



    So they stick with their failed strategies and will violently insist on never changing them, even if it means financial ruin to themselves, their companies and their shareholders.
  • Reply 20 of 25
    Quote:
    Originally Posted by TBaggins View Post


    It's likely some heady mix of arrogance, technical ignorance, being pathetically out of touch with their customers, and bad aftershave.



    Seriously, the music industry suits are SO screwed right now. They want the clock to turn back to the '90s, when they were riding high selling $18 CDs with only one or two good tracks on them... with little in the way of competing formats (maybe cassette tape). Those days are gone forever. How they consistently fail to grasp this is beyond me.



    But what truly astounds me is how they seem to think that if they had complete control, they would be able to remedy the situation. Can you see it now? Download prices tripled or quadrupled, the growing legit online customer segment being quashed as everyone flees en masse to the pirate sites, and CD sales still in free fall with no online sales safety net left anymore. And all the while, the core problem of an over-reliance on a very few big acts and this year's crop of one-hit wonders festers on, while the overall quality of their catalogs plummets to new lows.



    What? I'm not even sure where to begin to ripping apart your rant.



    Competing formats? Why would the record companies want competing formats? Answer: they don't. That's the problem right now with HD DVD. Competing formats are bad for the content providers because it splits their potential market. CD's never competed with tapes because the albums for a long time came out on both formats.



    For the most part, the record companies do have complete control. It's quite obnoxious how these articles make it sound like Apple has the record companies by the balls when it comes to negotiations. iTunes accounts for a whopping 8.5% of music sales, hardly a particularly strong bargaining position. The big 3 could easily just pull their music and watch the iTunes Store dry up practically overnight. Would doing so lose them money? Probably, but could it be worth it to them to do so? Quite possibly. Some people might turn to piracy, but the people pirating are probably not buying from iTunes in the first place. What "safety net" does online sales provide? Maybe a little from casual pirates who might be just as happy buying the song they were looking for as searching torrents for it.



    I don't think piracy or even crappy music is the reason for the decline in album sales. It's market saturation, the same thing that is now slowing down DVD sales. People already own most of the music they want to own, so there's only new albums left to buy. When CD's came out, there was 3+ decades worth of albums to purchase, now people are left with only buying what's new. This is the reason movie studios are anxious to get people on HD, so they can re-buy their content all over again on the new format and start the sales cycle all over again.
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