Record labels urged not to participate in promo

Apple has allegedly begun urging record labels to decline participation in Amazon's Daily Deal promotions, an unnamed major-label executive told Billboard.biz. Although record labels initially did not interact with Amazon for the promotion, it has since evolved into a more complex cooperation aimed at exclusive terms and special marketing.

Amazon now reportedly negotiates with the music companies to obtain a one-day exclusive before an album's street date, effectively giving the online retailer a head start on first-day sales. Vampire Weekend's "Contra" was pushed as a Daily Deal available for $4 a day ahead of retailers and iTunes. The promotion helped drive first-week sales to 124,000, with digital downloads accounting for 60 percent.

Although Apple previously allowed record labels free rein to market and promote albums on their own terms, the recent report suggests that relationship has changed due to the Daily Deal. After Amazon pushed for an exclusive window and digital marketing support on bands' MySpace pages and websites, "iTunes said, 'Enough of that s***,'" according to the record label executive.

Several sources claim that iTunes representatives have been pushing the record labels to opt out of the Daily Deal promotions. Apple allegedly removes iTunes marketing support for albums included in Amazon's promotion. The persuasion appears to have worked in certain cases, driving executives from Capitol, Capitol Nashville, and Jive to prevent several albums from becoming Daily Deals, according to the sources.

The report has expanded the wide range of criticism that many record executives have aimed at iTunes and Apple, as the company maintains its dominant position in the MP3 distribution business. "They are... diverting their energy from 'let's make this machine better' to 'let's protect what we got,'" said a major-label executive.

Despite the criticism, the Daily Deal promotion is reportedly still viewed by many labels provide promotional opportunities for artists that may not have been considered for additional iTunes marketing.

"Amazon is fighting a guerrilla war against iTunes, and now iTunes is getting frustrated because they work hard to set up and promote a release weeks in advance of the street date, and then lo and behold, Amazon jumps in there with this deal of the day and scrapes off some of the cream," another record-label executive added.

by MacNN Staff