Labels making specific demands in latest iTunes talks

Posted:
in iPod + iTunes + AppleTV edited January 2014
Record labels negotiating the removal of copy protecting measures from tracks sold on the iTunes Store are each looking for Apple to agree to certain concessions, according to a new report.



Citing industry sources, HypeBot claims that Warner Music wants the iTunes operator to instate variable pricing at the track level, which would allow the record company to step outside the 'one price fits all' model and bill more than 99 cents for some of its hit singles.



For its part, Sony BMG is reportedly requesting a shift in relationship that would see its DRM-free tracks sold on iTunes through the same agency model it uses to sell tracks on Amazon, Rhapsody and other services. Under this model, iTunes would be relegated to the role of a delivering agent while the label acts as the seller.



"Sony BMG's concern is that competition will drive track prices lower and the agency model allows them to maintain complete control," the report says.



Meanwhile, Universal is said to be asking that Apple watermark each DRM-free track so that they could later be tied back to an individual's iTunes account should they turn up on file sharing networks. Other digital download stores are said to have agreed (or are close to agreeing) to the measure.



Rumors that the three major labels would join EMI in offering their catalogs unrestricted on iTunes have made the rounds in recent weeks. However, the most recent report from CNet News.com suggests an announcement ahead of the new year would be unlikely.
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Comments

  • Reply 1 of 50
    slewisslewis Posts: 2,080member
    Hmm, Universal's and Warner's demands aren't so bad, but if Sony BMG has complete control then there would be no competition between online music retailers and assuming Apple offered the same concession to other labels, could be used for price fixing. T_T;



    Sebastian
  • Reply 2 of 50
    Quote:
    Originally Posted by Slewis View Post


    Hmm, Universal's and Warner's demands aren't so bad, but if Sony BMG has complete control then there would be no competition between online music retailers and assuming Apple offered the same concession to other labels, could be used for price fixing. T_T; Sebastian



    I agree about Sony BMG and Price Fixing. The only way to drive down prices would be a boycott . I assume that it would also drive more people to pirate. NOT GOOD!
  • Reply 3 of 50
    MacProMacPro Posts: 18,368member
    The record labels are in such a strong bargaining position ... If Apple doesn't play the way they wish I suppose they will what, go back to CDs in stores or sell through their own highly successful online systems? Sooner or later they will all be history. Bands must surely be thinking 'Different' these days when it comes to distribution for the future. Why pay a middle man (who has screwed you all along anyway) to do nothing but argue with Apple? Why not cut them out of the food chain and deal directly. Contracts do expire!
  • Reply 4 of 50
    richlrichl Posts: 2,213member
    Variable pricing isn't such a bad deal of consumers. I've already picked up a couple of £3 albums off Amazon's new UK store.
  • Reply 5 of 50
    Quote:
    Originally Posted by RichL View Post


    Variable pricing isn't such a bad deal of consumers. I've already picked up a couple of £3 albums off Amazon's new UK store.



    A lot of my purchases are spontaneous and one song at a time. Variable rate prices will keep me from impulse buying.
  • Reply 6 of 50
    Quote:
    Originally Posted by Dorotea View Post


    A lot of my purchases are spontaneous and one song at a time. Variable rate prices will keep me from impulse buying.



    Um, wouldn't you wait to see what the price is before jumping to conclusions? I mean, if you were going to buy a song and it was 49 cents instead of 99 cents, are you going to suddenly decide not to buy it? In fact, wouldn't you be at least slightly inclined to buy 2 songs from that album at that price?
  • Reply 7 of 50
    The big record labels still don't get it do they?! The indie labels and DIY scene are doing better than ever, because they can directly reach their audience, iTunes, or otherwise. The big labels are becoming increasingly irrelevant. Unless they change their attitude I'm sure they will see their market share decrease and profits with it.



    Home taping is killing music. Balls.
  • Reply 8 of 50
    Why can't Apple bring in the labels piecemeal instead of all at once? That way, if they can bring in, say, Warner on more favourable terms. Once Warner sees their iTunes downloads take off (and they will, if they're DRM-free), then the other labels should fall into line quickly.
  • Reply 9 of 50
    Quote:
    Originally Posted by caliminius View Post


    Um, wouldn't you wait to see what the price is before jumping to conclusions? I mean, if you were going to buy a song and it was 49 cents instead of 99 cents, are you going to suddenly decide not to buy it? In fact, wouldn't you be at least slightly inclined to buy 2 songs from that album at that price?



    What I didn't state before is that I tend to buy most of my music late at night when I'm tired. I really don't want to look at prices, but instead want to go about purchasing knowing that I'm not racking up huge sales. It makes it very easy when each song is around $1.



    I doubt that the songs that are hits will go down in price I expect that the price will be jacked up. I doubt that the record labels want variable pricing in order to LOWER prices and make less money.
  • Reply 10 of 50
    Quote:
    Originally Posted by JavaCowboy View Post


    Why can't Apple bring in the labels piecemeal instead of all at once? That way, if they can bring in, say, Warner on more favourable terms. Once Warner sees their iTunes downloads take off (and they will, if they're DRM-free), then the other labels should fall into line quickly.



    Because they probably realize they won't see sales "take off" by simply dropping FairPlay DRM. Most people have no idea what FairPlay is, that their music is encoded in FairPlay, or whether or not FairPlay is good or bad. 1) FairPlay is extremely liberal (no, not in the political sense) in terms of the rights it gives the customer and 2) it's very transparent.



    The people who care about DRM make up a minority (albeit, a fairly vocal one) that 1) often doesn't buy the crummy corporate music from the Big Four anyway, favoring indie bands who usually put up their music in iTunes Plus form, 2) any worthwhile music from the Big Four is likely already in their collection via DRM-free CDs or other outlets, and 3) it's trivially easy to remove FairPlay by simply burning the protected songs to a CD (and I believe they can be burned to DVD as well) and then re-importing them into iTunes.



    So in a way, I hope the Big Four just keep right on requiring DRM; it's one less advantage they have over indie labels/bands. One thing Apple could do that would make DRM almost meaningless, would be to get The Beatles' entire catalog in iTunes Plus form.
  • Reply 11 of 50
    guarthoguartho Posts: 1,208member
    Quote:
    Originally Posted by AppleInsider View Post


    Meanwhile, Universal is said to be asking that Apple watermark each DRM-free track so that they could later be tied back to an individual's iTunes account should they turn up on file sharing networks. Other digital download stores are said to have agreed (or are close to agreeing) to the measure.



    How likely do you see this holding up in a suit? You'd have to prove that I was the one that released it to the file sharing sites. It could have easily been stolen from me first.
  • Reply 12 of 50
    Quote:

    ... Universal is said to be asking that Apple watermark each DRM-free track so that they could later be tied back to an individual's iTunes account should they turn up on file sharing networks ...



    Isn't this already the case with iTunes Plus tracks anyway? They have your name in them but it can be easily removed.
  • Reply 13 of 50
    richlrichl Posts: 2,213member
    Quote:
    Originally Posted by Dorotea View Post


    I doubt that the songs that are hits will go down in price I expect that the price will be jacked up. I doubt that the record labels want variable pricing in order to LOWER prices and make less money.



    I can only use Amazon's UK site as an example.



    On the iTunes UK store, albums retail for £7.99. On Amazon's store, albums vary from £3 up to about £10. The vast majority of albums over £8 are double albums. Most albums are £7 or below. The biggest selling album in the UK at the moment is only £3.



    Maybe the labels have offered Amazon a special deal to break Apple's dominance. All I know is that the Amazon store is cheaper thanks in part to variable pricing.
  • Reply 14 of 50
    chris_cachris_ca Posts: 2,543member
    Quote:

    Meanwhile, Universal is said to be asking that Apple watermark each DRM-free track so that they could later be tied back to an individual's iTunes account should they turn up on file sharing networks. Other digital download stores are said to have agreed (or are close to agreeing) to the measure.



    All iTunes purchases (including DRM free iTunes plus) already have the account info embedded in file, so what's to negotiate?
  • Reply 15 of 50
    Quote:
    Originally Posted by caliminius View Post


    Um, wouldn't you wait to see what the price is before jumping to conclusions? I mean, if you were going to buy a song and it was 49 cents instead of 99 cents, are you going to suddenly decide not to buy it? In fact, wouldn't you be at least slightly inclined to buy 2 songs from that album at that price?



    You are assuming, incorrectly, that songs would be sold for .49 cents. The reason the record labels want flexible pricing is to make more money, rather than less money. You are far more likely to see songs for 1.49 and 1.99 than for .49 cents.
  • Reply 16 of 50
    chris_cachris_ca Posts: 2,543member
    Quote:
    Originally Posted by Guartho View Post


    How likely do you see this holding up in a suit? You'd have to prove that I was the one that released it to the file sharing sites. It could have easily been stolen from me first.



    I doubt very much they could/would file charges simply because of the name on the file. They would have to do some investigation.
  • Reply 17 of 50
    Quote:
    Originally Posted by caliminius View Post


    Um, wouldn't you wait to see what the price is before jumping to conclusions? I mean, if you were going to buy a song and it was 49 cents instead of 99 cents, are you going to suddenly decide not to buy it? In fact, wouldn't you be at least slightly inclined to buy 2 songs from that album at that price?



    Quote:
    Originally Posted by Guartho View Post


    How likely do you see this holding up in a suit? You'd have to prove that I was the one that released it to the file sharing sites. It could have easily been stolen from me first.



    Quite correct. You could assert that defense at your trial after spending $50,000 in attorney fees. Good luck.
  • Reply 18 of 50
    Quote:
    Originally Posted by Chris_CA View Post


    I doubt very much they could/would file charges simply because of the name on the file. They would have to do some investigation.



    Where else would the file come from. Did the tooth fairy steal it and put on the file sharing site?
  • Reply 19 of 50
    Quote:
    Originally Posted by RichL View Post


    I can only use Amazon's UK site as an example.



    On the iTunes UK store, albums retail for £7.99. On Amazon's store, albums vary from £3 up to about £10. The vast majority of albums over £8 are double albums. Most albums are £7 or below. The biggest selling album in the UK at the moment is only £3.



    Maybe the labels have offered Amazon a special deal to break Apple's dominance. All I know is that the Amazon store is cheaper thanks in part to variable pricing.



    The reason those prices are lower now is because the labels want to pressure Apple into caving to their demands. Once Apple agrees to variable pricing, the prices will definitely go up, not down, everywhere, from iTunes to Amazon. Especially on any new releases.



    The competition is what is keeping both sides in check.



    That's just basic common sense. The labels don't want to do us any favors. They want to make more money.



    Apple isn't looking out for consumers, either, although their resistance to this is helping us by coincidence. If the labels get their way, prices go up, piracy goes up along with it, sales go down, and the iTunes store suddenly doesn't make even its current meager profits. Everyone loses.



    What the labels STILL don't seem to get is that they should be working WITH Apple, not against them, if they want to increase sales and profits.
  • Reply 20 of 50
    Quote:
    Originally Posted by flydoggie View Post


    Where else would the file come from. Did the tooth fairy steal it and put on the file sharing site?



    Your kid's friend visits with a USB flash drive and copies your music?



    Not many regular home users log out of their accounts. Their Mac is open to anyone in the family or anyone who visits.
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