Behind the Apple-EMI Deal

[EagerDragon]

Very interesting. I was assuming that Apple approached EMI about DRM removal, and EMI was the one to demand higher prices. ...Guess I was wrong.

EMI is kind of making Apple look bad.

We knew EMI wanted more money, who is to say that they did not raise Apple 30 or close to that for the distribution of DRM free?

Yes Apple set the price, But as EMI stated, they quoted their price for Wholesale and Apple set the retail price.

EMI charged anywhere from 1 to 29 cents more. Closer to 29 is likely.

 

[theBB]

I'll decide on the truth in EMI's statement based on availability of EMI songs at eMusic, which does not carry any, yet. If they were willing to sell anybody their songs without DRM at the old price points, I don't think eMusic would say no.

I am pretty sure EMI, along with other major labels, was asking for a price rise and doubling the bitrate was the only way Apple would say yes to that demand. I still think 30c premium is a bit too much, as the new bandwidth and storage requirements probably cost Apple only 2cents, if that. Even if inflation should take each song to $1.10, this is a 10x markup... In a few years, they will probably get rid of 99c options all together and leave us with $1.29 versions only.

 

[poopooplatter]

I just want to know how anyone could possibly vote "negative" on this story on the front page. Are there RIAA lawyers logged into macrumors??? There's absolutely nothing about this that makes things worse for consumers - it's a win for everyone we care about - music lovers, music purchasers, Apple, ipod sales, iTMS sales.... christ, we should be rejoicing.

I just want to know how anyone could get that upset over an internet poll.

 

[MarcelV]

MS and pretty much everyone else has been offering 256 since the get go.

Doesn't MS sell songs on Zune Marketplace as 192 CBR, and so does Urge? iTunes Store's AAC is 256 and is VBR, so that will be much better quality, not even discussing the baseline sound between WMA and AAC on same bitrate.

 

[Lancetx]

So screwing their customers over is an Apple decision. Not surprised. At all. In any way whatsoever.

If you choose to only believe EMI's spin, sure.

MS and pretty much everyone else has been offering 256 since the get go. Personally I don't define premium as not having DRM. If that is the case then a standard CD is "premium" music.
At this point I want to see MS kick Apple's butt. Its obvious that Apple is pulling all the strings they want, with no consequences.

If DRM makes no difference to you at all, then by all means, buy from Microsoft if they offer higher bit rate songs for less money (but with their own very proprietary DRM always included).

MS certainly hasn't been kicking anyone's butt in music, much less Apple's, and that's not likely to change anytime soon. And if you don't like the way Apple is "pulling all the strings", I'm quite sure that Microsoft has a Zune that they would love to sell you. They need all of the help that they can get with that thing.

 

[smqt]

A very clever way to get applauded for a price raise, that otherwise would only have created negativity.
No judgment, it's actually what I like about apple: that they attach commerciality to things that are more or less meaningful. Never just the one or the other.

 

[EricNau]

TO me the only rationale for apple keeping the DRM'd tracks is to get more people to buy DRM'd, iPod only music. They have no other excuse.

...Or convince customers to buy the "premium" version who otherwise wouldn't.

 

[msandersen]

...I thought aac was supposedly perfect at 128 and thats what made the files smaller and better than mp3. If ther gonna sell it unprotected it should be uncompressed. What does apple lossless exist for if not that. then u could encode however u want...tho cds r still cheaper and easier

No-one's said 128kbps AAC was "perfect", but equivalent to, I think, 160kbps MP3. It is "perfect" for most users, who won't be able to tell the difference on their iPods or Lo-Fi PC speakers. Audiophiles prefer higher-bitrate songs played through high-quality headsets or Hi-Fi equipment. 256kbps AAC is well beyond "transparency", the point where human hearing can't tell the difference between it and a CD. I think 160kbps AAC is "perfect" and is definitely at leas t as good quality as those who rip to MP3 at 256kbps, but it's at the end of the spectrum where it is hard to tell the difference anymore. And frankly, who cares if our cats and dogs can tell the difference.

Apple lossless exist for archival purposes, be it of CDs or restored vinyl. It is not meant as a distribution format. It is way too big for that. You get around 50-60% compression with lossless formats, meaning maybe 15Mb for your average song, as opposed to 3-6Mb for AAC or MP3 (depending on bitrate and format). In an all-broadband future of Terabyte storage as standard, Lossless formats may well become the norm for distribution, but utterly impractical for now.

 

[poopooplatter]

EMI would have NEVER done this had Steve Jobs not written that open letter.So regardless of who started it I'll happily pay $1.29 for a 256k DRM-free song.

As soon as Apple updates this in May I'm gonna pay the extra $.30 per song to update my large library too!!

Hearing from people like you always makes me feel real happy about having Apple stock.

Thank you!

 

[Mainyehc]

So screwing their customers over is an Apple decision. Not surprised. At all. In any way whatsoever.

At this point I want to see MS kick Apple's butt. Its obvious that Apple is pulling all the strings they want, with no consequences.

I, for one, want to see it the other way around (which is happening already). I don't think Apple is screwing anybody... It seems EMI is partially responsible for the tiered pricing model, so I'm figuring M$ and others will either sell DRM-less tracks at a premium, or at a loss (or at a smaller profit than Apple's).

M$, OTOH, was responsible for actively screwing its PlaysForSure partners when they launched the Zune Marketplace. Bear in mind that both PlaysForSure-based stores and Marketplace sell variants of the WMA format and Janus DRM, whereas Apple uses the open AAC standard and the much "fairer" FairPlay DRM. Anyway, DRM-ed or not (preferably NOT), I'd rather see AAC come out on top of the standards battle than WMA any day of the week... M$, after all, spent billions trying to kill MP3 and f*%#ed Apple's QuickTime business for years on end, so they could charge exorbitant fees to the entire industry, which is what M$ seems to do best... Nice, eh?

 

[G5Unit]

how about buying the CD for even less money and having uncompressed audio to rip as u see fit totally unprotected. Whoohoo! Seriously raising the price is stupid and so is a 256 bitrate. I thought aac was supposedly perfect at 128 and thats what made the files smaller and better than mp3. If ther gonna sell it unprotected it should be uncompressed. What does apple lossless exist for if not that. then u could encode however u want...tho cds r still cheaper and easier

Because if apple sold Lossless music on iTunes, some people would be wondering why each song is now 20mb.

 

[ReMaDi]

Wow, i certainly didn't see this coming. I bet on a Beatles anouncement.

Regarding the 1,29 vs 99cent price:
For me this is irrelevant and not a big issue. I only buy albums.

 

[twoodcc]

i'm still not so sure that this was a good move....we'll see i guess

 

[brandon6684]

I'm glad to hear that this is not an iTunes exclusive. Maybe someone else will come along and sell non-DRM MP3s at $0.99 or maybe they will finally open their cataloge to eMusic, though iTunes would still be a good bet for albums with the high quality non-DRM tracks. Now we just need high quality video with no DRM, which is what is keeping me from buying an Apple TV.

 

[Stella]

Pure speculation, with nothing to back this up.

Your treating SJ as some kind of revolutionary god.

EMI would have NEVER done this had Steve Jobs not written that open letter.

 

[piltupso]

I see apple as in a great position on this they get to up the price of some of their offerings and appear to the masses as the champions of DRM free music on one hand while on the other hand keeping most of their library safely locked away under their own management software. I guess you can get away with the when you have the rabidly loyal fan base Apple has.

 

[Peace]

Pure speculation, with nothing to back this up.

Your treating SJ as some kind of revolutionary god.

God? no..

Revolutionary? Yes..

 

[gmanrique]

I think this information is missleading...

Apple has openly said to all the labels: get rid of DRM. EMI though about it, tried it, and then decided, let's do it, let's call Apple. What is there not to understand, or to be surprising about who called who?

About the price, Apple has always stated what is the ammount of money they make out of each tune. I guess that is based on the 'whole sale price' given to them by the labels.

Although EMI is not telling Apple what to charge for each song, they stated today that now they offer a 'new' product, that is higher rate and no DRM, and negotiated also as a 'wholse sale price'. EMI even called it the premium product. I think, if EMI were charging the same, they would say so. So, based on the evidence at hand, I don't think it is Apple doing this.

Very interesting. I was assuming that Apple approached EMI about DRM removal, and EMI was the one to demand higher prices. ...Guess I was wrong.

EMI is kind of making Apple look bad.

 

[msandersen]

...At this point I want to see MS kick Apple's butt. Its obvious that Apple is pulling all the strings they want, with no consequences.

By MS, you mean their proprietary and DRMed Windows Media format? Because that's what they are pushing. Personally I refuse to buy WM formats, as it is vendor-and-platform specific. MP3 is too long in the tooth, I prefer open standards like AAC or Ogg Vorbis. Yes, AAC is proprietary and licensed, but an open standard nonetheless available equally on all platforms.

If this move by EMI and Apple result in non-DRM stores across the board, that will be Microsoft's worst nightmare, as their licensed DRM is all that keeps the stores using Windows Media. The industry may well standardise on AAC instead, the official successor to MP3, and that will be the end of Microsoft's dream of complete DRM and format control.
But of course, they will still have Video. DRM won't simply go away. MS has spent a lot of time and energy embedding Trusted Computing rights management into Vista to satisfy the movie studios so as to cement Windows' position as Media and Entertainment Hub of the future.

 

[geerlingguy]

New wholesale price indicates that apple is probably paying more for these tracks. However, it might be five cents, and apple sees room for profit. We'll have a better idea when we see the competition's prices.

Five cents would be a lot of Apple's profit margin on songs. Literally.

I am part of an indie band with a CD on iTunes (the Priestie Boyz' Lost in Ecstasy), and, of every song sold, we get $0.63. And we go through an online distributor, CDBaby, which also takes a cut from what Apple gives.

So, from our $0.99 song (which still has DRM), about $0.70 goes to CDBaby (of which we get $0.63). That leaves Apple with $0.30/song. And Apple has to pay for: servers, hosting, bandwidth, web design, iTunes developer team, marketing, and credit card processing with that $0.30.

If EMI is charging $0.05 more per song, that means Apple has only $0.25 to pay all their bills. And with twice the file size (256 kbps rather than 128), the bandwidth/hosting/storage fees will, assumedly, double)...

Therefore I find it justifiable for Apple to raise the price (I thought it was inevitable from the beginning... $0.99 couldn't last forever).

 

[TheBobcat]

The thing that's really starting to make me mad about all of this is the fact that everyone seems to be suffering from a flash case of mental retardation and can't it get through their head that AAC is NOT an Apple proprietary format.

That, and people really seem to act like this is some really obscure standard that's hard to get the rights to. Like how Engadget blasted Apple in its whiny article.

Almost no devices play AAC, and Apple is deliberately not making these downloads available in MP3.

 

[nagromme]

Very interesting. I was assuming that Apple approached EMI about DRM removal, and EMI was the one to demand higher prices. ...Guess I was wrong.

EMI is kind of making Apple look bad.

Yet EMI said they knew Jobs' stance already even before the open letter... so who formally "approached" who about this specific deal is just semantics. Did EMI approach Apple after Apple had said they'd prefer no DRM? That's my guess.

As for the price... has EMI said their wholesale cost to Apple is unchanged? Because of not, then yes, the precise .30 cent figure is Apple's choice, but the need for an increase may not be. (And that doesn't count doubling the bandwidth and tripling the storage/backup needs: now there's a 128 version AND a 256.)

Apple may be the villain, and EMI the hero, but what I hear from EMI to support that interpretation is too vague. Apple persuading EMI would be more in keeping with recent history.

 

[iMeowbot]

Apple has openly said to all the labels: get rid of DRM. EMI though about it, tried it, and then decided, let's do it, let's call Apple. What is there not to understand, or to be surprising about who called who?

EMI had been shopping this plan around to all the online music vendors before Apple published their "Thoughts on Music" tract.

Although EMI is not telling Apple what to charge for each song, they stated today that now they offer a 'new' product, that is higher rate and no DRM, and negotiated also as a 'wholse sale price'. EMI even called it the premium product. I think, if EMI were charging the same, they would say so. So, based on the evidence at hand, I don't think it is Apple doing this.

That's correct, the EMI offer always included higher prices for more generous rights. It was of course up to Apple to decide how much of the difference they would eat or pass along, and it was also up to Apple to decide on the bit rate and encoding format.

 

[pizzach]

People are amazing

I can't believe how many people are saying "Screw you apple!" when they have been given more choices and flexibility.

Complaint 1: Apple raised the prices. Even though you can get the same exact thing as you could before for the same exact price.

Complaint 2: My old music is now outdated, screw apple for the drm which you can conveniently update to DRM free with higher quality for 30 cents.


The complaint that makes any sense whatsoever is multi-tiered pricing. Hopefully that will disappear with time. Of course, a large file size costing more to download does have some kind of strange logic to it.

 

[AidenShaw]

that's too bad

Personally I refuse to buy WM formats, as it is vendor-and-platform specific.

I guess that you won't be getting a Blu-ray player, since they use WM as one of the supported codecs.

Nor an HD-DVD player (before they disappear) - yep, WM also.

But wait, Microsoft doesn't make Blu-ray players - and they run Java, not Windows. Where does this "vendor-and-platform specific" part come in?