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Jobs' tense negotiating ended music industry standoff

updated 03:35 pm EST, Mon February 2, 2009

Jobs tense with labels

Although the recent changes to iTunes pricing policies and DRM protection would suggest that Apple and the record label giants have reconciled their differences, interactions still remain tense between the two entities, according to a New York Times report. Sony CEO Rolf Schmidt allegedly posed the final resistance to Apple's terms, disagreeing about the timing of pricing changes, although he finally folded after a heated phone call with Steve Jobs on Christmas Eve.

Jobs' pugnacious tone has been supported by the dominant position held by iTunes. One music executive, speaking on condition of anonymity to avoid displeasing Apple, claimed that the labels lack leverage when negotiating with Apple. The companies are reluctant to resist any terms, fearing the removal of their content from iTunes.

"I think Steve has been smart, and he knows he has the upper hand," said Dave Goldberg, former manager of Yahoo Music. "They can't afford to pull their music."

Although Apple previously opposed flexible pricing, the company maintained an interest in making tracks available on the iPhone. The record companies conceded to the wireless distribution, while achieving the ability to split prices into three categories that would provide higher profits for hit singles.

"They're still the biggest game in town, it's really Apple and everyone else," said David Card, an analyst at Forrester Research. "I think the industry would rather have multiple outlets."




by MacNN Staff

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  1. Bobfozz

    Joined: Dec 1969

    +7

    The industry

    The music industry hasn't shown any brains in years. They now MUST know what it feels like to be pushed around as they have been doing to others.
    Don't you suspect that the only sympathy they get is from each other?
    They never saw iTunes coming. In fact, it appears that for some years now they have had ZERO vision of the future. I'm sure also their own IT people were telling their bosses--Apple won't last--put your faith in Microsoft.

  1. poolmouse

    Joined: Dec 1969

    +1

    Old DRM music?!

    I must have $2000 worth of iTunes (DRM'd) music in my collection. Where does that leave us with our old music? Will Apple give us a way to strip out DRM now that the fight is over?

    Don Montalvo

  1. macnixer

    Joined: Dec 1969

    -2

    Storm brewing

    This should have been a post not a reply to Don:
    ----------------------------------------
    With non drm music apple has actually become the largest player in the music sales business. Now music purchased from iTunes can be played anywhere and i would keep iTunes as it is the best music manager out there. iTunes connects to the iPod and iPhone best and the experience is the best with the the ecology. Apple knows this. While non-drm means less ipod sales or more non apple players around but I do not see it as that. See the reason above. It is ecology.

    Now about the music companies, if they think that they could muster up another seller then they are wrong. It is going to be tough to get another player for a long time. Online sales is not like retail stores. Here the stores are lit up with lights and you do not fall prey to a salesman. the whole thing is based on the experience at your own pleasure, ease, convenience and price. Sometimes I forego price as the convenience is higher. As of now Apple has the best store in town. Amazon is good but does not have the ease I want. I want a simple way to buy my music and apple provides it.

  1. macnixer

    Joined: Dec 1969

    +3

    re- Old DRM music

    Don, you can get replacement tracks from apple. Go to iTunes and select iTunes Plus from the righ nav bar. you also can call the Apple help number or walk over to a Genius bar in your area.

  1. ggirton

    Joined: Dec 1969

    -1

    tracks on amazon

    i got some tracks on amazon -- they gave me 5 f ree -- and it actually was a lot easier finding what i was looking for than iTunes.

  1. testudo

    Joined: Dec 1969

    -2

    Fairplay

    Now that Apple has basically killed Fairplay, is there any chance they'll open up or license their DRM so those people with DRM'd music can listen to that on other devices or computers without having to spend more money at the iTMS?

    Or just add back in the capability in iTunes to convert the music to DRM-free?

  1. ff11

    Joined: Dec 1969

    +1

    re: Fairplay

    Apple hasn't killed Fairplay, the DRM is still in effect. New music is bought DRM free. Old music can be upgraded to DRM free.

  1. Bobfozz

    Joined: Dec 1969

    +1

    tense or intense?

    I would say the negotiating was "intense."

    The music people may be "morons" by all normal standards (?) but that doesn't mean they won't argue until their dentures fall out. After all, who is this Steve Jobs guy? What does he know about anything? I suspect your music gurus should be asking themselves this question.

    Actually supporting some of these models, such as the subscription based ones, takes a lot of time, money, and talent. If you aren't making money, you probably are slowly losing it. The subscription based models don't exactly seemed to be catching on.

    Somehow I get the "feeling" that Apple does a lot of market research on their stuff AFTER an IDEA crops up. I don't think the fat cars do ANY market research except by quoting the "good old days."

  1. gskibum3

    Joined: Dec 1969

    +1

    ggirton

    As far as I know, Amazon only sells mp3, which sound horrible.

    I always take a pass on mp3s, even when a friend tires to give them to me. I can't stand the way they sound.

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