updated 12:10 pm EST, Fri February 11, 2011
Companies 'held ransom' by Apple, says Ephraim
The CEO of Sony Computer Entertainment, Michal Ephraim, says his company is eventually hoping to stop selling music through the iTunes Store. Sony has been globally rolling out a service called Music Unlimited, which differs from the iTunes Store in being based on streaming subscriptions. "If we do [succeed with Music Unlimited], then does Sony Music need to provide content to iTunes?" Ephraim tells Australian newspaper The Age. "Currently we do. We have to provide it to iTunes as that's the format right now."
"Publishers are being held ransom by Apple and they are looking for other delivery systems, and we are waiting to see what the next three to five years will hold," the executive adds. The iTunes Store is the dominant vehicle of music distribution in the US, giving Apple a level of control which has engendered resentment from record labels. One long-running complaint was Apple's insistence on a flat 99-cent pricetag for songs; extended pressure was needed before the company eventually allowed some newer or extremely popular songs to be priced at $1.29. A minority of tracks were discounted to 69 cents.
Sony's resentment may stem in part from Apple's rejection of the Sony Reader app at the App Store. The company was among the first to discover that Apple has changed the way it handles publishers, no longer allowing them to sell books, magazines or newspapers via an outside storefront without matching in-app options. While also ushering in subscription support, the move may hurt publishers by diverting more revenue to Apple while also hampering data harvesting used to sell ads.