Labels have a problem because they would rather keep the savings made from digital distribution and packaging rather than pass them on to the customer amongst other reasons.
... and they get to screw the artists more. Their per-song profit from iTunes is higher than CD, but artists get paid less.
The studio typically gets $3-5 from an $18 CD (the rest going to manufacturing, distribution and massive levels of retail markup.) That's about 30-50 cents per song for a typical 10-song album. Less for albums with more tracks. In contrast, they get 65 cents per song for iTunes downloads - with no overhead whatsoever, because Apple is doing all the distribution.
But if you listen to their press releases, you'd think iTunes downloads are making them lose money. And that's what they use to justify scamming the artists out of their share.
Well, I just gave this a go and it basically said "you're not in the US, go away". I don't understand why they (the labels) like to turn down potential purchasers and not get any money!
In many cases, they have signed contracts promising exclusive distribution to specific distributors. They can't break those contracts without paying a lot of money.
As long as Apple wants to promote their AAC standard, I guess the labels won't like it. Support for AAC is growing, but MP3 (though maybe inferior) is a de facto standard.
As others mentioned, AAC is not an Apple-specific standard. It's part of the MPEG spec, just like MP3 is. It's actually quite popular on car stereos (about 30-40% of the units sold today have support.)
But I fail to see how this would affect the studios. Once you're selling a non-DRM format, they're all equivalent, since anybody can transcode files. (AAC codecs for Windows are free and easy to download.)
Simple fact: Most DVD-Players and CD-Players in cars can read MP3 but not AAC. I personally got back to MP3 encoding, as I like to have >100 songs on a CD and my car radio doesn't like AAC.
That would explain why you like it. It doesn't say a thing about why the labels would care. Their goal is to prevent you from playing music everywhere you want, not the other way around.
Question was, why labels go to Amazon instead of Apple. My POV is, that it is indeed AAC's fault.
And I respectfully disagree. If Apple switched to MP3, the labels would not change their opinion at all.
This is all politics. They're trying to build up Amazon as a competitor to Apple, so they can be used as leverage when it comes time to renegotiate iTunes contracts. Nothing more, and nothing less.
But I have a second idea. You need iTunes to access the iTMS, but from what I've heard (no US resident so no chance to test) you only need a freakin standard webbrowser to use Amazon. Believe it or not, there are some people in the world, really disliking iTunes on their Windows machines.
You seem to seriously believe that the labels could care less about convenience, UI or what customers want.
If they cared, they wouldn't be developing CD copy protection schemes that don't work and prevent playback on entire categories of players.
A retailer can still be a threat. For example, Wal-Mart is a big log in the road to legal movie downloading because they are afraid of how it will cut into their DVD sales.
Are you aware that Wal-Mart has offered movie downloads for a year? The service was turned off last week (moving customers to NetFlix), but only because HP stopped supporting the back-end software that was running the service.
That doesn't sound like they're trying to road-block anything.
