Warner Music Exec Threatens To Cutoff Apple

[Alastor]

Originally Posted by PC Pro: News

Warner chief threatens to scalp iTunes

A Warner Music executive has threatened to cut off Apple if Steve Jobs continues to refuse to give ground on iTunes Music Store pricing.

Digital strategy chief Michael Nash said during a discussion at a wireless telecoms conference that the music industry has let Apple get too much power in the digital downloads market.

'What if Jobs says 39 cents or 29 cents per download - what then?,' he said. 'The industry can say, OK we'll cut him off - very few people buy music from digital downloads.'

He added that he is sure that the Apple CEO would find another way to sell iPods.

Nash's comments echoes those made last week by Warner CEO Edgar Bronfman, who called for Apple to adopt variable pricing and share out revenues from iPod sales.

The record companies' position is based on the dubious argument that digital downloads sell iPods. In fact all the evidence points to the opposite: that iPod sales have driven demand for downloads. The vast majority of digital music sales are made by iPod owners. Cut off Apple and the labels digital sales will slump.

'The iPod drives people to iTunes, not the other way around,' Michael Gartenberg of Jupiter Research told Business Week.

In the longer term music bosses (and Apple's rivals) are clinging the idea that the iPod's dominance of the MP3 player market cannot go on forever. But such is Apple's overwhelming market superiority that other device manufacturers are complaining that they cannot get hold of flash memory because Apple is buying up the entire supply for its iPod nano.

A Korean news site reports that Apple is the only customer for Samsung's new MLC flash memory, which is cheaper and more efficiently produced. And because Apple is buying in much greater bulk than anyone else it enjoys further price benefits.

'It's true that the company that has the largest market will have the edge,' said Hwang Chang-kyu, CEO of Samsung's semiconductor division. 'Buying 100 units and buying one can't be same.'

The record companies cannot even be sure, as they once were, that music on mobiles will break Apple's dominance, now that the first of the major digital music services to offer phone support is iTunes. Nor have music subscription services from the likes of Napster and Real proved attractive; people, it seems, still like to own their music.

For the time being and the forseeable future, Apple appears to hold all the cards. Single-price downloads will be around for a while yet.

Simon Aughton

Original Link: http://www.pcpro.co.uk/news/78119/wa...lp-itunes.html
EDIT: Seems the link now requires registration.

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The RIAA is looking for control over iTunes pricing, and it seems they are serious. The RIAA wants iTunes to use a variable pricing skeam, no more flat fee. As they said in the following article last week:

http://www.redherring.com/Article.as...+Back+at+Apple

“He [Warner Music Group CEO Edgar Bronfman Jr.] called Apple’s across-the-board $0.99-per-song charge unfair.”

“Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing.”

“Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past.”


Of course the last one is the most appropriate, obviously nothing will be below $0.99 as that would cut into profit margins. However, be assured that raising the price is “fair”.

[my porsche]

what crawled up his ass and died?

[Lagonda]

Edgar Bronfman Jr. is known to be THE number one nutjob in the industry. They also want a piece of the iPod sales revenue. How retarded is that ? How can a company seriously claim such a thing without being laughed at ?

It's not the RIAA that wants a flat fee, it's Bronfman Jr. who wants it. FYI: the RIAA has nothing to say outside of the USA...

Anyway, this probably won't fly but Steve has to keep his ego under control in this matter.

[Jakg]

how can they expect a cut from the sale of a device that might not have anything to do with them?

[Lagonda]

Originally Posted by Jakg

how can they expect a cut from the sale of a device that might not have anything to do with them?

That's the entire point. They can't expect that but Bronfman Jr. claims they are entitled to it because he thinks that it is their music that drives the iPod sales. Which is a blatant lie and even if it did drive the sales, they wouldn't get anything. If you want revenue from MP3 players than build/sell your own and try to outsell the iPod. Which isn't going to happen.

This is just a case of public extorsion by a major corp.

[Jakg]

i see...

[Spastik_Roach]

Well it doesn't affect me since the I-tunes store isn't in NZ. Still, by reading this, I know that someone is a bit of a fruit loop. Man I wish I-tunes was in NZ, there are some albums i really want that are on it.

[my porsche]

its not a store, its a software you get when you buy an ipod

[Spastik_Roach]

Originally Posted by my porsche

its not a store, its a software you get when you buy an ipod

Yeah I know, I use i-tunes as my music player despite not owning an i-pod. I meant the i-tunes music store.

[Smithman]

Originally Posted by Lagonda

That's the entire point. They can't expect that but Bronfman Jr. claims they are entitled to it because he thinks that it is their music that drives the iPod sales. Which is a blatant lie and even if it did drive the sales, they wouldn't get anything. If you want revenue from MP3 players than build/sell your own and try to outsell the iPod. Which isn't going to happen.

This is just a case of public extorsion by a major corp.

Do car companies get a portion of oil companies' revenue? What about plastics manufacturers? After all, it's their products that drive the sales of oil...

A little nuts if you ask me.

[Bob]

Edgar Bronfman Jr
^^
he's on crack

[Esperante]

I hate people who steal music, and I hate people who whine about selling it.

But I would recommend variable pricing; to an extent. One can buy Pink Floyd's 'Echoes' (25:00) for the same price as the Beatles' 'Her Majesty' (o.23).

[IBrake4Rainbows]

I think variable pricing is a bad idea.

That way, the record companies can set their price for iTunes and if the price is exorbitant than no one will download from iTunes and be forced to go to the Record Company.

Their just unhappy because Apple managed to control and industry they first tried to destroy and then wanted a slice of.

With Single pricing at least you can keep track of the cost of downloads. This has been one of the major sticking points for iTunes becoming available in Australia and NZ.

[2ndclasscitizen]

There's plenty of stuff on this at afterdawn.com. I read an interesting article the other day. Turns out, as ripping a CD to your comp/player is illegal, and as there still isn't an iTunes in many countries, every person who owns an iPod in a country without an iTunes store is using their iPod illegally, and it would be very easy for them all to be sued

[Esperante]

Originally Posted by 2ndclasscitizen

There's plenty of stuff on this at afterdawn.com. I read an interesting article the other day. Turns out, as ripping a CD to your comp/player is illegal, and as there still isn't an iTunes in many countries, every person who owns an iPod in a country without an iTunes store is using their iPod illegally, and it would be very easy for them all to be sued

That can't be right. If Apple was selling the iPod, which comes with iTunes (the only way to load songs on), which clearly allows one to upload songs to a computer (even advertised on iPod boxes, then Apple would surely be sued.