Warner Music Considering Not Renewing Long-Term iTunes Contract

[kkat69]

I don't get how people take the immediate reaction that Apple is being a bully.

They aren't forcing anyone to stay with them. They agree to a terms and if those terms aren't met then an agreement isn't made, simple as that.

All this does is solidify the fact that Apple/iTunes aren't he money hungry people, the Music industry is. 99c is NOT a lot, even for older music that's harder to find.

I would rather buy the music when I want it, rather than pay a monthly fee and run the risk of not downloading anything this month or that month. So basically I paid a month for nothing.

Now of course (and I would take all this back) if I had UNLIMITED downloads for that monthly fee then MAYBE but the public is already taxed so much with monthly fees for things this just adds another that eats away and nickle and dimes your bank statement. When iTunes is just a pay as you go type of thing. I prefer iTunes. DRM free is not an issue (when you know what to do) and as far as I'm concerned, it's my music I buy no one elses. I do as I wish and I do just that.

But if it's not unlimited or it's bandwidth/size restricted (ie., 5mb a month = 5.99, 20mb a month = 11.99) then forget it. I don't want to aquire another senseless monthly subscription.

 

[rockosmodurnlif]

I don't see the connection between iPods, iTunes and the iTunes store. Keep in mind I use the iPod and iTunes. But not the iTunes store. So far, not using the store has yet to affect my music collection or my iPod.

 

[gwangung]

The labels -- and networks and studios -- continue to demonstrate a complete and total lack of understanding of this market.

Do we expect anything else?

Remember, studios are a group that doesn't give a cut of downloaded programs to screenwriters.

Um, hello? You're making money off this, and you're not giving a cut to THE WRITERS???? Ya think if ya did, you wouldn't be facing a strike from the WGA???

 

[lookmark]

Talk about cutting off your nose to spite your face...

 

[TheBobcat]

No major music label has left iTunes, I don't get why everyone gets stuck on that with these stories. They're just not committing to terms for a long period of time. These companies don't sign agreements to sell CDs at Wal-Mart years at a time, why should they on iTunes? If they do bail, then that's their problem and will suffer the monetary pain of doing so.

This is just posturing, trying to let Apple think that they're not the ones with all the cards in this thing. No sane, or at the very least, money-grubbing company would walk away from the number three retailer in their segment, or if so, for very long.

 

[Popeye206]

Business as normal

I really believe this is just the music companies trying to see if they can muscle the industry around. Lets face it. The music industry is in trouble! Album/CD sales are down and will continue to fall. They show iTunes in the #3 position, but I would bet that if you look at Walmart and Best Buy market share over the last few years they are falling. Just look in Walmart... the CD section is getting smaller and is pathetic. People want to buy what they like and only what they like. Two or three songs here and there.... not a CD for $17.99 for just one song and 10 others that stink!

It would be natural for the desperate music industry to try some of this to increase their share of the iTunes pie or the on-line music sales. In the long run... I think we'll see more artist go independent (why do you need a lable if distribution requires no capital for product?)... I think we'll see more singles released (why wait to release 10 songs once every 1.5 years when you can release a new song every other month?). Finally, I think we'll see Apple make changes to keep the lables happy... I think Apple knows iPods need content to thrive and will do what they can to keep our iPods well fed.

 

[RidleyGriff]

All of you.......you're not looking at the big picture here!

This is bad. Right now, iPods represent roughly 80% of the market. However, if music labels begin to abandon iTunes, then that means there will be less and less of a selction available on iTues for customers to purchase, which means less and less people will buy iPods because the iTune selection doesn't carry "their song", which means the customer will begin to buy brand-x MP3 player, which means less songs are purchased off iTunes, which means more label companies will drop because they aren't making money, which means less people buy iPods because "their song" isn't on iTunes......etc, etc.

Not good Apple. Work it out, share a popscile. Play nice.

I disagree rather strongly, box33. People are already accustomed to their iPods, and rate their devices highly. People already have an aversion to the record labels. People are also already used to getting their music through non-legal means.

What is Apple's stronghold? The device, and the device/software integration. What's the only way for any store to get an edge on iTMS? Gotta be compatible with iPods. What does that do for apple? Still makes their device the driving force of the industry.

The labels are going DRM free because it is their ONLY option of creating different online sales entities that can play on iTunes. Apple used the labels demand for DRM against them, and now the labels are screwed, b/c DRM free tracks only help iPod.

If some new player comes out that is more appealing, then we'll have an issue. But that hasn't happened yet.

Additionally, the networks and studios are going in the exact wrong direction with video. They are ignoring the market that exists, and trying to create new ones for which their is no want.

This entire game has been a chess match, and frankly -- whether somebody's an Apple fan or not -- I think one would be ill-advised to say the record labels, or studios/networks, have better long term vision in terms of the tech space and consumer wants/needs than Apple.

 

[hugodrax]

What they want is variable pricing. 2.00 a song for the good songs, 1.25 for the not so good song and maybe some songs cannot be purchased individually so you have to purchase the whole album etc.. And probably a more restrictive DRM where its 1 PC and 1 device and that is it.

 

[SciTeach]

Here's a question....

How many artists use Warner Music?

I'm sure it is a large quantity and it would be an impact to iTunes, but are we talking 20%, 30%,...?

 

[Apocalypse]

All of you.......you're not looking at the big picture here!

This is bad. Right now, iPods represent roughly 80% of the market. However, if music labels begin to abandon iTunes, then that means there will be less and less of a selction available on iTues for customers to purchase, which means less and less people will buy iPods <snip>

I'm afraid you're gravely mistaken. iPod was out for almost two years before iTunes store was even around. iPods play any music, not just DRMed music from iTunes. People can import any CD or MP3 into iTunes and put it on their iPod. If a bunch of stupid music labels decide to drop from iTunes, it'll probably just end up hurting them. I haven't seen any store as convenient as iTunes so far, and I'd much prefer to use it than Joe Music Label MP3 Store Deluxe™.

 

[Jetson]

If this is how the big labels treat their cash cow, iTunes, you can just imagine how they treat the artists and other creative individuals who don't have as much leverage.

I would love to see Apple Inc. put out a shingle named Apple Records and start signing major artists themselves. Since they've settled things with the Beatles old record label, Apple Inc. might be able to use that industry expertise, and give the artists much better terms than the RIAA fascists.

 

[waynesworldri]

i disagree with the notion that apple has to play the greed game with publishers. the ipod is right now in a very profitable bubble and apple having invented this digital music economy right in front of everyone's very eyes is reaping the benefits as it rightly should. however, it is inevitable that over time, margins for the ipod, etc will be put under pressure and this explosive hardware/software integration profit run will settle down.

this to me is simply about the publishers, having their butts saved by apple in the first place, now getting overtly greedy and demanding a bigger piece of the profits that apple has been getting. Now they want either a slice of ipod revenue (not gonna happen) or the itunes/ipod/apple tv/imac ecosystem profits (again, not gonna happen) and they're not above threatening higher prices for the consumer to get there.

the amazing thing to me is that while DRM-free tracks at Amazon are nice.. it's the price that will bring people there, not the the DRM-freeness. So, that's simply an experiment to see if there's a way to break the stranglehold Apple has on the revenue and profit bubble that everyone is seeing drive Apple's stock price through the roof. Eventually, the Amazon price threat will go away as the publishers can't make much more money there, either and it's impossible for a retailer to compete in the platform ecosystem that Apple is excelling at right now. Microsoft is investing billions with the Xbox platform and what a cut throat business that is!

So the publishers have proven that price controls are their game and while they sold cd's at a higher price than cassettes even though they were a fraction of the costs to produce, they will try and price-fix this market as well. Good luck to them. I doubt it will work this time. The value of buying simply at a modest price (still very profitable, mind you) when you could alternately download the same content illegally for free was simple enough that anyone could understand it. Monkey with that and you could kill the golden goose. Kudos to apple for knowing this and shame on the music publishers for trying to savage the very animal that rescued them in the first place.

 

[pagansoul]

One, the music industry is not leaving iTunes, they are just going month by month and not year by year. If they can get a better deal they want to be able to leave with a at most 30 day wait. No one likes being tied to a yearly contract (see iphone & AT&T). Two, I do not use iTunes to buy music, like most people I use iTunes to organize my CDs and feed my pods. If iTunes didn't sell music but just provided the organization, covers, artist information and clips I would still use it. I would love it for Podcasts alone. I buy my music from resellers and flea markets and I'm sure the record companies want a piece of that action also. In their perfect world everything self distructs after warranty and you have to buy it again. That's the way business works today.

 

[hh83917]

My take on this is since Apple is currently the 3rd largest online music seller, if Warner leaves iTunes, it'll hurt Warner for short term until they find someone else (i.e Amazon). But in the long term Apple is the one that's going to suffer after everyone eventually follow the trend leaving iTunes resulting iTunes music store with no music to sell (probably only EMI might stay, I think).

Yes, they are not leaving iTunes, but they just want it so if they want to, they can. It'll suck for Apple and probably make Apple less of a bully and possible bring more competition to the online music business, which is good for the consumers.

 

[bubblegum80]

Here's a question....

How many artists use Warner Music?

I'm sure it is a large quantity and it would be an impact to iTunes, but are we talking 20%, 30%,...?

Its one of the major record labels man. Many indie companies have their stuff distributed through them.

I never used iTunes store, I really really wanted to use it, but they never distributed enough Japanese music. Most stuff stayed within the Japanese store, and even they didn't get much. Which is a shame, because they had all the French, Nigerian, British, and Icelandic artists I wanted buy "digital" albums from. Too bad for iTunes, they lost 100+ album sales. I'll keep my CD, and SACD collection from now.

 

[Consultant]

Doesn't matter how you look at it or feel about it. Reality of it is that Apple is treading on a fine wire. iTunes is not God's gift to the world. It emerged at an opportune time but nothing lasts for ever.

Compromise for longevity is a smarter move for Apple. You can't tyrant and demand allegiance to your rules when other avenues of relief are appearing to those you preach to.

Any company trying to keep the price low for the consumers is a tyrant? You must work for the music industry.

The whole reason we are here is because of #5 below. We have already been through 1-5...

1. music labels become too greedy, trying to charge $$$ for a CD which is exactly a bundle of a few great songs and mediocre songs.

2. People realize that, and ripped the music, and pass around the good songs.Ttons of people were copying music for free. Music labels do not receive a penny.

3. iTunes, due to ease of use, quick search, great music player app, and clear pricing, becomes the largest electronic music store. Yes, there is no bundling; you can buy only your favorite song without paying $15 $20 for a whole cd. (reducing piracy and providing money to these music labels at the same time)

4. labels forgot why people pirate music, gets money from iTunes, becomes greedy again and wants more from iTunes. Pressures iTunes to charge more and pressures iTunes to let the labels bundle unwanted songs for higher prices (do you think the labels want iTunes to charge 10 cents per song?)

5. iTunes refuse to increase the price of songs, yes, iTunes REFUSED to increase price of individual songs.

6. the same misguided people that almost put the labels out of business decides to do it on their own again. Bad usability, bad MS DRM that won't work on MS players turns people off.

(many of those iTunes-wanna be digital distribution companies already failed, some as recently as this year)

7. people will start pirate music on a big scale again, independent recording artists will bypass the labels and goes to iTunes.

8. iTunes alive and well, labels go bankrupt

 

[bubblegum80]

I'm afraid you're gravely mistaken. iPod was out for almost two years before iTunes store was even around. iPods play any music, not just DRMed music from iTunes. People can import any CD or MP3 into iTunes and put it on their iPod. If a bunch of stupid music labels decide to drop from iTunes, it'll probably just end up hurting them. I haven't seen any store as convenient as iTunes so far, and I'd much prefer to use it than Joe Music Label MP3 Store Deluxe™.

I can buy anything I want from HMV. Anything... music related that is.

 

[Blue Velvet]

...independent recording artists will bypass the labels and goes to iTunes.

8. iTunes alive and well, labels go bankrupt

I'm sorry but that's a ridiculous vision... artists might create their own labels, but labels going bankrupt? Nope.

 

[bubblegum80]

Any company trying to keep the price low for the consumers is a tyrant? You must work for the music industry.

The whole reason we are here is because of #5 below. We have already been through 1-5...

1. music labels become too greedy, trying to charge $$$ for a CD which is exactly a bundle of a few great songs and mediocre songs.

2. People realize that, and ripped the music, and pass around the good songs.Ttons of people were copying music for free. Music labels do not receive a penny.

3. iTunes, due to ease of use, quick search, great music player app, and clear pricing, becomes the largest electronic music store. Yes, there is no bundling; you can buy only your favorite song without paying $15 $20 for a whole cd. (reducing piracy and providing money to these music labels at the same time)

4. labels forgot why people pirate music, gets money from iTunes, becomes greedy again and wants more from iTunes. Pressures iTunes to charge more and pressures iTunes to let the labels bundle unwanted songs for higher prices (do you think the labels want iTunes to charge 10 cents per song?)

5. iTunes refuse to increase the price of songs, yes, iTunes REFUSED to increase price of individual songs.

6. the same misguided people that almost put the labels out of business decides to do it on their own again. Bad usability, bad MS DRM that won't work on MS players turns people off.

(many of those iTunes-wanna be digital distribution companies already failed, some as recently as this year)

7. people will start pirate music on a big scale again, independent recording artists will bypass the labels and goes to iTunes.

8. iTunes alive and well, labels go bankrupt

CD's are not expensive, nor are they overpriced.

 

[seashellz2]

I think iTunes and iPod are now too entrenched-and unstoppable:
Amazon has too many fingers in the pie, too late.
Plus Steve will have something up his sleeve.

The music industry is dying-and they dont have even a tiny clue as to why.
It is not pirating, filesharing, nor online stores-it is thier Jurassic-age model of how its SUPPOSED to work.
Or rather how it USED to work.
And it isnt.
And they are in a panic.

 

[BLUELION]

I really don't get why content providers are looking to 'play hardball' with Apple by threatening to balkanize the legal distribution of digital music, especially when the iPod holds an 80% share of the market, and iTunes is, so far, the only digital music model to have shown steady profits and customer growth.

You'd think that they forgot how they got into this mess in the first place.

True, but then again some old dogs don't learn new tricks. What Apple should do is continue to trek as it has and once these folks (universal, et.al.) do notice their loss Apple should anti up the fee to pay with itunes.

That and the labels are are short sighted about the profits to be made. Collaborative efforts garner more sales in the end. Apple has it right.

 

[princealfie]

CD's are not expensive, nor are they overpriced.

Wow, you have lots of bank accounts to afford all that.

 

[studiomusic]

All I can see is that they (Warner, Universal) will get less of a percentage on the sales they make on iTunes.

Or that's how it should be...
You sign a multi-year deal, you get a price break, you want month to month, you pay full price.

So Apple should be making more off of these labels than they are now. I can't see any advantage in having a multi-year contract otherwise.

 

[e-coli]

Who cares where the music comes from as long as it works on both the mac and pc and is compatible with the ipod?

you can always buy the cd if the music companies totally ***** the bed.

And besides, who listens to big-label music anymore? It's all complete over-produced garbage. Indie labels and self-promo are on fire these days. Who needs a record company anymore?

 

[BLUELION]

Any company trying to keep the price low for the consumers is a tyrant? You must work for the music industry.

The whole reason we are here is because of #5 below. We have already been through 1-5...

1. music labels become too greedy, trying to charge $$$ for a CD which is exactly a bundle of a few great songs and mediocre songs.

2. People realize that, and ripped the music, and pass around the good songs.Ttons of people were copying music for free. Music labels do not receive a penny.

3. iTunes, due to ease of use, quick search, great music player app, and clear pricing, becomes the largest electronic music store. Yes, there is no bundling; you can buy only your favorite song without paying $15 $20 for a whole cd. (reducing piracy and providing money to these music labels at the same time)

4. labels forgot why people pirate music, gets money from iTunes, becomes greedy again and wants more from iTunes. Pressures iTunes to charge more and pressures iTunes to let the labels bundle unwanted songs for higher prices (do you think the labels want iTunes to charge 10 cents per song?)

5. iTunes refuse to increase the price of songs, yes, iTunes REFUSED to increase price of individual songs.

6. the same misguided people that almost put the labels out of business decides to do it on their own again. Bad usability, bad MS DRM that won't work on MS players turns people off.

(many of those iTunes-wanna be digital distribution companies already failed, some as recently as this year)

7. people will start pirate music on a big scale again, independent recording artists will bypass the labels and goes to iTunes.

8. iTunes alive and well, labels go bankrupt

AND THIS IS HOW THE END GAME SHALL BE PLAYED OUT. If more of these label CEO's really had a brain between their ears they would use some common sense to their policies and think it through. if they did they would reach similar conclusions and build a positive working relationship to maximize profits using the model used by Apple.