Music Industry Fears Apple and is also Subject to iTunes Popularity Rankings

[MacRumors]

The NY Times reports on the heated negotiations that led to the announcement at Macworld that Apple would be dropping Digital Rights Management (DRM) from all iTunes music. In exchange, the music labels were given their long-requested variable pricing model. In addition, Apple was able to secure over-the-air iTunes music downloads for the first time.

Apple, however, was said to have a strong upper hand in the negotiations according to music executives:

In interviews, several high-level music executives, who spoke on the condition that they not be named to avoid angering Apple, said they operated in fear of Apple’s removing a label’s products from the iTunes store over a disagreement, even though that has never happened. The labels do not have much leverage in negotiating with Apple.

Steve Jobs, himself, was reportedly responsible for a particularly heated exchange with Sony Music on Christmas eve.

Also interesting is that Apple holds another powerful bargaining chip with the control over the iTunes homepage itself as well as the popularity rankings.

"Whether the industry likes it or not, the iTunes chart showing the most popular songs in America is a major influencer of how kids today discover and communicate with their friends what kind of music they like," said Charlie Walk, the former president of Epic Records, a unit of Sony Music. "It's a very powerful thing right now in American pop culture and immediately validates a hit song."

The influence of Apple's home page promotions and popularity charts has been the subject of much debate amongst App developers, but it seems Apple may be well aware of their impact.

Article Link: Music Industry Fears Apple and are also Subject to iTunes Popularity Rankings

 

[theheadguy]

This had to be stressing Steve out... I mean, come on, that heated on Christmas Eve?

 

[jayenh]

all sounds good to me. apple provide the best service for digital distribution of music. if they dont like it they can move on and use another service but lose customers.

same goes for the ratings, now artists get recognized because we like them, not because the record label wants them to be liked by us.

it's about time someone started sticking it to the music industry as far as i'm concerned.

 

[talkingfuture]

The fact that Apple has put fear into the record companies amuses me greatly.

 

[Doju]

The fact that Apple has put fear into the record companies amuses me greatly.

Heh, it's definitely understandable, but hear hear.

 

[spacecadet610]

it's amazing how apple in < 10 years went from a nobody to the king of the U.S. music industry that everyone fears.

 

[dwsolberg]

Good news

The current situation seems like a good deal for both Apple and the music industry. In a way, I think Apple is helping the music industry. It currently seems to be run by old dinosaurs who have little understanding of current culture. They have to be dragged kicking and screaming into a profitable business model for the future. I guess it's just more companies that good ol' Steve is saving.

 

[BenRoethig]

Now if they could only do the same to the movie industry. The insane level of DRM there is hampering the adoption of digital movies.

 

[PruneTracy]

Poor ol' giant record companies. I love how they are acting like the innocent victims in all of this. Record companies are the villains in all of this!

 

[gwangung]

The fact that Apple has put fear into the record companies amuses me greatly.

Let's hear it...

"AWWWWWWWW........."

 

[Mitch1984]

Steve must have said, we've done you labels a favour, listen to us, we've prooved ourselves. If not we'll take your stuff off the store.

It can only be Universal or Sony I bet who'd be difficult out of the lot..

 

[Drumjim85]

i have no sympathy for the big 4.

 

[Tones2]

Remember that the record companies "compromise" to Apple is what they had ALREADY given all of the rest of the online distributors - DRM free music. They were holding this BACK from Apple / iTunes alone before this current agreement, which was unfair.

Tony

 

[~Shard~]

Now if they could only do the same to the movie industry. The insane level of DRM there is hampering the adoption of digital movies.

I agree, it would definitely be nice to see.

Times are a-changin' and these big companies with their old models and antiquated views need to become more Darwinian - adapt, or become irrelevant and instinct. Their choice.

 

[fishmoose]

all sounds good to me. apple provide the best service for digital distribution of music. if they dont like it they can move on and use another service but lose customers.

same goes for the ratings, now artists get recognized because we like them, not because the record label wants them to be liked by us.

it's about time someone started sticking it to the music industry as far as i'm concerned.

Well said! If it wasent for iTunes piracy would be an ever bigger problem then it is already imho!

Now we just need Apple Lossless in iTunes store and were good to go!

P.S what ever happend to The Beatles in iTunes store, have Apple given up on that one? I would love to have it there! I already have all the CD's and some LP's but anyway..

 

[dejo]

"Whether the industry likes it or not, the iTunes chart showing the most popular songs in America is a major influencer of how kids today discover and communicate with their friends what kind of music they like,"

I see nothing in these charts that indicates to me that the big record companies have anything to worry about. They echo all the other lists, like Billboard's or American Top 40, etc.

 

[kas23]

This had to be stressing Steve out... I mean, come on, that heated on Christmas Eve?

I agree. This is the only part of the article that stood out for me. Man, give it a rest.

The current situation seems like a good deal for both Apple and the music industry. In a way, I think Apple is helping the music industry. It currently seems to be run by old dinosaurs who have little understanding of current culture. They have to be dragged kicking and screaming into a profitable business model for the future. I guess it's just more companies that good ol' Steve is saving.

Apple is helping out the music industry big time. If it wasn't for Apple, there really wouldn't be much of an option besides just stealing the mp3s. Apple gives people a legitimate out, basically so they are not forced to just steal the music. Sure, you can buy CDs, but they're becoming too hard to store and are kinda becoming wasteful. I think just offering digital DLs is the way to go. The record companies have out-stayed their welcome though - I paid my dues.

 

[idea_hamster]

Never happened?

When they say that Apple has never removed a label due to a disagreement, this may be true -- technically -- but recall that everyone saw what happened to NBC when they turned their collective nose up at iTunes.

NBC went off with the idea that they could build their own system, struggled to deliver an on-line media option, wallowed in red ink and obscurity, and eventually came back with their collective tail between their collective legs.

I know personally that I had, in fact, bought an episode of Monk through iTunes -- but when I found that the NBC-owned operation was Windows-only, I just forgot about it.

When NBC can't do it and returns as the prodigal son, other fat cats think twice about biting the hand that feeds them.

 

[ChrisA]

I used to be, back when I was a kid that you heard and discovered new music on FM radio. Now days that is the last place you might expect to hear something new and different.

On the "old days" there were DJs who would have hundreds of singles and new albums mailed to them and they'd listen at home and find music for their shows. But now the DJs are given play lists by management and the lists are carefully tailored to a specific formula, or "format". It is "format radio" that has driven everyone to use other methods, like iTunes to find music

Here in the So. California we are lucky to have several good public radio stations where the DJs still control the music mix and they can play something they themselves just discovered. This is not common any more.

The music industry did it to them selves.

 

[daveporter]

Poor ol' giant record companies. I love how they are acting like the innocent victims in all of this. Record companies are the villains in all of this!

Until the download model for distributing recorded music came about, the music industry was able to use musicians as they saw fit (I was one of them in the 60s). Even if you found a way to record your own music (through Indi recording studios) you had no way to distribute it so you had no choice but to kneel and bow to the big industry boys and just allow them to screw you and hope that you got some of the scraps.

It is the loss of this power that most troubles the traditional music industry big shots...their days of making tremendous money off the backs of the musicians is ending and they are fighting any way they can to prevent this from happening. iTunes and similar services are giving the musician power that he/she never had before.

In the end, everyone wins (musicians, small studios, fans, Apple, Amazon, etc.) except the big music industry fat-cats!

 

[color guy]

hey,
We can't control the pipelines through payola, anymore!
Someone is going to figure out that we actually pretty useless and that
there is no actual need for a " record company" anymore.
That's so 20th century.

 

[gnortenjones]

I used to be, back when I was a kid that you heard and discovered new music on FM radio. Now days that is the last place you might expect to hear something new and different.

On the "old days" there were DJs who would have hundreds of singles and new albums mailed to them and they'd listen at home and find music for their shows. But now the DJs are given play lists by management and the lists are carefully tailored to a specific formula, or "format". It is "format radio" that has driven everyone to use other methods, like iTunes to find music

Here in the So. California we are lucky to have several good public radio stations where the DJs still control the music mix and they can play something they themselves just discovered. This is not common any more.

The music industry did it to them selves.

I'm starting to feel old, because when I read this, I immediately thought about my own "old days" (late 80's/early-mid 90's) when the major source of new music was MTV, and just like FM radio, I feel they are pretty much irrelevent to music at this point (why do they even HAVE a video music awards any more?!). I can't even remember the last time I put MTV on and actually saw a music video playing.

 

[Tofaha]

how popular a song becomes is very much influenced on the itunes chart.

 

[ibosie]

Now if they could only do the same to the movie industry. The insane level of DRM there is hampering the adoption of digital movies.

Seconded. It does occur to me though that given the same control and authority we loathe in a record company might one day become Apple. Let's hope they use this new influence wisely and not pee people off with the kind of anti-customer tactics we're all so keen to see the back of.

 

[Stridder44]

how popular a song becomes is very much influenced on the itunes chart.

As it should be. Instead of whatever the industry is trying to "sell" or "push" at that time, we get music that is actually interesting to the consumer.

Well done Apple. Kick their ass.