04/26/2007, 12:25am, EDT
Thursday, April 26th
Apple CEO: iTunes subscriptions unlikely
The industry leading online music destination has sold more than 2.5 billion songs since it was launched and continues to expand its film offerings. During the conference call yesterday, iTunes said that has over 5 million songs, 350 television shows, and 500 movies and that iTunes accounts for over 85 percent of legal music downloads in the United States (Nielsen SoundScan numbers).
A recent revolutionary agreement with EMI for DRM-free music -- which will be available at premium in May -- puts the other labels at a disadvantage, according to previous reports. "EMI struck a deal that puts all of us at a disadvantage," said an anonymous music executive. EMI, however, defended its position, saying that consumers were frustrated with DRM protection.
The remaining labels -- Sony BMG, Universal, and Warner -- are expected to drive contract renewal negotiations with Apple toward variable song pricing, a subscription service for iTunes, and bundling more music alongside other features into digital packages.
Last week, industry executives and analysts told Reuters that they expect Jobs, following his open letter calling for DRM-free music, to push for further concessions from record companies on selling music without copy-protection.
"There are a lot of people in the other music companies who are very intrigued by it," Jobs said in the interview. "They're thinking very hard about it right now.... We've said by the end of this year, over half of the songs we offer on iTunes we believe will be in DRM-free versions," Jobs said. "I think we're going to achieve that."
Filed under: industry
Other story tags: digital music/video
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Not that its a bad reason, just don't blame it on "People want to own their music". Maybe people want a subscription service that works well. People have actually signed up for other subscription services, so there must be some out there who don't mind 'not owning' their music.
Then again, just the fact that the labels are requesting it is reason enough not to want it.
But Steve probably won't do that, because it will open the floodgates to music subscription, which he doesn't believe in. The music labels will hammer him on why he's allowing it for TV shows and movies and not for music, even though the reasons would be logical. Logic doesn't exist in the music execs worlds, only profit.
Now, as for the negotiations over the terms, it looks like SJ has got hand here (or, to quote a character from the 'Seinfeld' sitcom in the US: "I've got so much hand, it's coming out of my glove!"). Labels will be forced to capitulate to the will of Apple. After reporting record profits and growth, it is clear that Apple is unstoppable. It is also clear that, four years later, Apple is the only game in Downloadtown. If labels want to sell downloads, they'll have to ask (politely) Apple do do it for them. Now, if SJ manages to strongarm another label (say, Universal) to sell its ctalogue DRM-free, this will be a watershed moment. It will symbolise capitulation of record labels to the might of Apple's iTunes juggernaut.
As for video downloads, rental model would be an excellent idea down the road. Fortunately, it is a separate deal, not involving record labels, but movie studios, so it could be negotiated independently.
Good times are coming for the consumers...
it's not a blame. it's a matter-of-fact statement. subscriptions haven't exactly made a good financial impact to the bottom line of companies that offer them. and the reason? the market is simply not interested at the moment.
i should reiterate this time and time again: the non-smokers in my city who said they'd go to bars more often if the city banned smoking in bars didn't exactly show up in droves when the city imposed the ban. same goes for music subscriptions.
I'm grateful to Apple for repeatedly being the sole sane voice in trying to make the best of what's happened in the music biz.
The number of people who actually want DRM can be counted on the fingers of one hand. A lot of people think it's necessary, but Jobs doesn't and he's the one who matters here.