digital music/video
08/27/2005, 1:50am, EDT
Saturday, August 27th
Apple faces showdown with music industry over iTunes
After revolutionizing the music industry with its iTunes digital service, Apple now faces a major hurdles as the labels try to exert their influence to change iTunes' immensely popular pricing structure. While some music executives believe the higher, more complex structure could backfire, others have held out licensing, forcing Apple to launch iTunes Japan without Sony BMG and Warner Music Group. "Mr. Jobs is now girding for a showdown with at least two of the four major record companies over the price of songs on the iTunes service. If he loses, the one-price model that iTunes has adopted - 99 cents to download any song - could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for $1.49, while a golden oldie could go for substantially less than 99 cents.
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www.wikipedia.org In the study of economics, collusion takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market form of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. Cartels are a special case of overt collusion, also known as tacit collusion.
It's quite possible that the record industry is setting itself up to be biatch-slapped in court.
1. Apple Records Inc. will sue AND WIN in court if Apple ventured into this territory. 2. Record labels do a lot more than just allow music downloads. To mimic the labels would require BILLIONS of dollars to even put their first foot forward, and it would possibly be a decade before any profit was seen. Such a move would be severely frowned on by share holders.
Being in the music industry, I have a huge love/hate relationship with the industry. Sure I can see where they are screwing up in their thinking. The increased prices that they are talking about actually is only because Apple's iPods only work with iTunes, unless you rip stuff yourself. See to the music industry if ALL of the online music stores were compatible with the iPod, they could sell more music and would not be pushing for a price increase. But Apple wants to keep a closed system, their pergoative and I agree with them, in order to control the quality of the user experience and isn't that why a lot of have been supoorting the Mac for over 20 years anyway? I digress...should be interesting to see what happens in the long run. The one area that makes me nervous is Microsoft is entering the music game and they'll screw that up the same way they screwed up IE.
Personally, I can't use iTunes because of the crappy 128 rips. I work in a nightclub and those things sound horrible on a big system. Plenty of sites where I can get electronica at 320!
Music downloading remains in its infancy. If the record companies want to go ahead and kill the only solution to their problem at the moment, they can be my guest. Apple has other ways of turning a profit. I just hope they realize that in this case, the long-term is far more important than the short-term profits gain they *might* experience.