[lwdesign]

As I recently wrote: Consumers vote with their wallets. Why would Universal tell over 100 million iPod owners that Universal's catalog would no longer be available for their music players? Insanity!! This is a horrendous business decision. Watch Universal's stock over the next few years. I predict a slow and miserable decline.

[ThisNameIsTaken]

Mmmmm, and then when the extortion money from the media player manufacturers isn't enough, they can tack on a commercial at the beginning and end of each song in the "free" subscription. Make it so you can't fast forward through it, that'll really satisfy the consumers demands.

[uchuugaka]

They killed their own industry by producing crap, keeping prices high, and charging you for the marketing of crap. Now they're angry because Apple single-handedly (almost) created the model, the vehicle and does all the marketing, and takes a bigger cut of what is tantamount to a much cheaper delivery.
Subscription? They're dreaming link Microsoft. Nobody will go for it.
Panic?
Yes.
They've already seen big name acts decide to go it alone and give their music away.
Now they're scared.

[leary]

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I should also be able to freely share my music within the confines of my home and family. Apple DRM doesn't allow me to do this. /forums/ubbthreads/images/graemlins/mad.gif

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How so? you can have your music on as many iPods as you want and sync three computers. If that doesn't work you can burn cds with almost no restriction (other than burning the same songs in the same order over ten times). You must have a very large family.

[drefractor]

You all have heard Steve's comments that 1/3rd of all new music is online only. AND, for less than 100$ a year artists can create their own album and have it released on ALL of the online music services including iTunes with all procedes from online sales (minus each particular site's distribution charges) coming back directly to the artist. Music customer ratings, social networking and concert promoters fill the void of arbitrary music corporation "marketing". Not that arbitrary marketing will go away completely, but its power is being diminished greatly for the music that is beyond the teeny bopper crowd.

[zensunni]

Am I the only one that sees the hypocracy in Apple refusing to allow different prices for new and old music when they do that very thing for new and old movies?
Oh, but Apple's CEO is on the Disney BoD and also happens to be the largest shareholder... Hmm, guess it's in his interest to have the different prices for movies, so that makes it ok.

[pairof9s]

Be careful, folks, in how you perceive these events. This has a good chance of going against Apple.
This is a very concerted effort by record labels to rest control of digital music before it becomes too important to their bottom line. They can, at this point, absorb "no revenue" from iTunes to insure their solution prevails; it's simply not big enough on their total revenue bottom line to hurt in the short run.
Apple, on the other hand, can not afford to have the 3 largest labels taking their songs elsewhere. Although iPods are huge now, the negative effect of limited song availability along w/ the bad press would greatly impact consumers willingness to buy iPods, especially new owners. At the very least, it would make people research other music players, thus damaging the industry brand that "iPod" represents.
Of course, the storm on the horizon is what impact this has on currently "owned" music bought through iTunes from these labels. Will Apple continue to provide licensed listening rights (DRM) for Universal songs through iTunes? Will iTunes customers be able to still upgrade their individual songs to full albums? Where does this lead to in regards to videos and movies?
Makes one think perhaps the time has come to convert these iTunes purchases to MP3s!
/

[joebot]

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Makes one think perhaps the time has come to convert these iTunes purchases to MP3s!
/

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Don't do that, it would probably be a violation of Universal's licensing agreement. What you need to do is delete your iTunes music, sell your iPod, buy a brown Zune and repurchase your music in WMA format. Oh, and if you use a Mac, you need to sell that and buy a Vista PC, too. They'd prefer that you sell the Mac to someone who is deaf and will never use iTunes.
And while you're at it, if you want to listen in the car, you'll need to purchase the music a third time on CD. Just don't turn it up loud, because that's public performance and they need a contract and more money for that, too.
Seriously, I share your concern that this could damage Apple's clout in the industry. That would be unfortunate, because as far as I can tell Apple is the only company making a reasonable effort to balance consumers' concerns. Universal wants their power back so they can fabricate obscenely profitable terms at will and ram it down our throats. They've already alienated this customer -- I won't buy anything from Universal, period. They need to get over it.

[maineguy]

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The head of Universal Music is enlisting partners for a new music service that will seek to undermine Apple's iTunes, a report Friday said. <a href="/news/2007/10/12/universal/index.php">[more]</a>

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1. We'll disassociate ourselves with the only truly successful on-line music distribution model.
2. We'll partner with other companies and have them charge a $5 fee so we can provide "free" music.
3. Each of our prospective partners must have previously failed at their on-line distribution endeavors.
4. We will create this system because we don't feel we currently make enough money from the successful business model.
5. We consider this "thinking outside the box".
If this idea was used as a project for a college business course, the student would be asked to leave.

[Pennywigeon]

I think the record execs have been high for too long.
$5 a month from HARDWARE makers?
100 Million iPods x $5 a month = $500 Million dollars (yes half a billion) PER MONTH?
ROFLMAO
Yeah sure. To all record execs. I am sorry but your freeloading off of other peoples fame and hard work (artists) is coming to a close. Thinking something as silly as this will never fly.
How about Car manufacturers pay a subscription fee for Gasoline and we the consumers would get free gas?
Yeah, sure.
In three years Hardware manufacturers would have to shell out $180. An iPod classic is only $149. Why would Apple LOSE money to line your pockets for absolutely NOTHING.
Free music, yeah what is free about the hardware maker absorbing the cost?
These are probably the same REc Execs that thought the iTunes would never fly, the same ones that thought 1 hit single and 14 songs of full garbage constitues a $15.99 CD cost.
$0.99 - $0.29 = $0.70 per song. Now those digital songs have NO OVERHEAD (cost of manufacturing cds, printing inserts, assembly, distribution and shipping costs.
$0.70 x 100 million = 70 million dollars of PURE PROFIT.
YOu know greed is one of the Seven deadly sins....

I hope the Rec Execs start learning a new career because the way things used to be are no more........

[Frisky]

Let me see if I understand this...
Apple pays for the storage, bandwidth and credit card fees. They develop the means to prevent the "music" from being purchased one time and being shared willy-nilly throughout the internet and do their best to ensure that it remains up-to-date.
The industry provides a single digital copy of the "music" to Apple to distribute via iTunes.
For this, Apple gets 30% and the industry gets 70% of the selling price.
Does that about sum it up?
(or did I miss something that would justify a higher "return" to the industry?)

[fribhey]

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$5 a month from HARDWARE makers?
100 Million iPods x $5 a month = $500 Million dollars (yes half a billion) PER MONTH?
ROFLMAO

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the funny thing is that their reasoning is that without the music, the hardware would be worthless BUT what they haven't considered is that if there was no hardware to PLAY the music then the music itself would be WORTHLESS..... and what they also don't understand is that without the bands/artists making music for them, the labels themselves are worthless - radiohead, NIN and madonna just proved that.
this is what will happen because they have their head so far up their asses:
1) the hardware companies will laugh at them
2) they will punish the hardware companies (apple) by not allowing their format to be played on their devices (ipod).
3) because everyone (over 70%) owns and uses and ipod, universal will be trying to rent music to people who have no way to play it.
4) the rest of the world will laugh at them (even though they already are)

[fribhey]

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Let me see if I understand this...
Apple pays for the storage, bandwidth and credit card fees. They develop the means to prevent the "music" from being purchased one time and being shared willy-nilly throughout the internet and do their best to ensure that it remains up-to-date.
The industry provides a single digital copy of the "music" to Apple to distribute via iTunes.
For this, Apple gets 30% and the industry gets 70% of the selling price.
Does that about sum it up?
(or did I miss something that would justify a higher "return" to the industry?)

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actually you are a little off
apple gets around 30%, the industry gets around 68% and the actual artist/band gets around 2%....
that about sums it up

[Steve_S]

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As well as launching a rival to the iTunes music store he hopes to nurture the adoption of other music players such as Microsofts Zune,

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The problem with this assumption is that the iPod is not popular because of the iTMS, rather, the iTMS is popular because of the iPod. Creating another rival to the iTMS is fine. If the music is compatible with the iPod and the music is DRM free, then they stand a good chance of taking business away from the iTMS, but it will not help the Zune become more popular. If the music is not compatible with the iPod, then the music store simply will not last very long. How many times have we seen this before? Amazon stands a chance because it is compatible with the iPod.

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The music industry is understood to be widely dissatisfied with the terms that Apple imposes for its iTunes store. Apple has insisted on selling all tracks at a uniform price, for example, while the labels would like to charge different prices for new and older music.

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I think the labels need a reality check and compare Apple to the alternatives, namely piracy. Before Apple came along and helped the labels with a real online sales model, they were facing a rapid decline in sales. For some, iTunes has replaced CD sales, but many, iTunes has replaced piracy. Once the labels drop DRM, they'll likely see even less piracy. Anyway, despite the 3 Billion songs Apple has sold for them, the music industry no longer likes these terms. Apple understands that 99 cents is a magic price point that makes most consider piracy not an issue, yet still provides adequate profit for Apple and the labels. As always, greed takes over. In principle, I kind of agree that the labels should be able to set their own price. However, I also agree that Apple probably knows better than they do in terms of what will work best.

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The plan is to get hardware makers to absorb the cost of a $5 monthly subscription, so that consumers would get their music essentially for free when they buy a new player, and the hardware industry would be compensated by selling many more devices.

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As a consumer, I don't want subscriptions. I can't imagine that Apple wants to pay a subscription fee for each iPod sold either. Subscriptions also have to be enforced with DRM. Again, another reason to veto such nonsense.

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In addition, the labels have tried to develop their own online music services before without success.

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Which is why they should all be thanking Apple for making the online model work at all. I'd wager that without iTMS, piracy would be even more rampant.

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They wouldnt be the first companies to take steps against Apples dominance. In August, MTV Networks said it would abandon its own digital music service, called Urge, and pool its efforts with RealNetworks Rhapsody service to create a better iTunes rival.

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Yeah, that's turned out to be a real force to be reckoned with, huh? /forums/ubbthreads/images/graemlins/blush.gif

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If the new service were to offer DRM-free songs it would make it easier for it to target a wide range of music players.

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There's nothing unclear about this. A subscription model is dependent upon DRM. Without DRM, you're just downloading free music that can be shared with everyone, even those vendors who choose not to pay the subscription fee. That's not going to happen.

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Meanwhile Sony said recently that it would abandon its proprietary ATRAC copy-protection technology, and add Microsofts Windows Media technology to its music players instead. At the same time, Sony said it would close its Connect Music Store in Europe and the U.S., an acknowledgment that it had been unable to dent Apples iTunes sales.

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Dumping ATRAC was a no brainer that should have been done a long time ago. Unfortunately, Apple doesn't license Fairplay. That leaves Windows Media as the ONLY choice. But, it doesn't matter how many companies support Windows media. People aren't going to not buy an iPod because it doesn't play Windows media. They buy an iPod because it's the best player and because they like iTunes. The music that they do purchase had better be compatible with it or they will perish.
In this case, Universal is acting like the spoiled child that is in need of a "time out". Perhaps they will pull their content from iTunes and get that "time out" before they come back groveling... In any case, it should be fun to watch all of this play out.