updated 01:20 pm EDT, Mon September 24, 2007
Apple terms "indecent"
Major record label Vivendi today chastised Apple for its "indecent" contract terms between Universal Music Group and the iTunes Store. "The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple," said Vivendi CEO Jean-Bernard Levy. Vivendi says it currently receives €0.70 of the €0.99 charged by Apple in Europe, and is demanding a new pricing model that would make new releases cost more than older works, according to a Reuters report. Levy assured reporters at a gathering in France that the largest record label is speaking with companies other than Apple to "ensure that music is better remunerated." Universal cancelled its long-term iTunes contract in early July, deciding instead to offer its catalog of tracks on a monthly basis and with an "at will" capacity. [corrected: Another panel member, not Warner Music Group, said that music labels could remove their music catalogs from the iTunes Store in one swift "decapitation" move. Warner has clarified that it did not threaten to remove its music catalog from Apple's iTunes Store.]
The label also began experimenting with DRM-free music in August, but omitted Apple's iTunes Store in its list of outlets that would offer the protection-free tracks. The iTunes Store also offers DRM-free music at a slightly higher price than protected tracks.
Warner Music has also waged an ongoing war with Apple over iTunes Store music pricing, and has repeatedly demanded that it be allowed to mark up newer songs at higher prices than older tracks. Apple argues that part of the iTunes Store appeal to customers is its simplicity and consistent pricing of every musical track, which results in no surprises for music customers looking to download a particular song.
NBC Universal late last month announced its decision to pull all of its TV show episodes from the iTunes Store, citing Apple's resistance to altering prices or bundling videos together to increase profit as the primary reason for its decision to back out. The network's videos, which include popular shows like Battlestar Galactica and The Office, will remain available to iTunes customers for several months until the two-year contract between Apple and NBC runs its course in December.