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back to article Universal recruits enemies for Total war on iTunes

Universal Music chief Doug Morris is reportedly aiming to join forces with Sony BMG and Warner to topple the iTunes store. OK, we've heard this war chant end in wails of disappointment before — its practically a blueprint for epic failure — but can Apple keep the barbarians at the gate forever? It's no secret the labels are …

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Tom
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Stop

Have they been drinking shoe pollish or something?

This has to be the stupidest thing they have come up with yet!

$5 monthly subscription? So it's going to have some kind of DRM (Windows I expect) and not Apple's DRM (and US only no doubt) . So it's not going to affect iTunes at all, people who like iPods will not be able to use it. Will people buy some other player just to get the "free" music? Well that "free" music is just going to be added to the price of the player. A SanDisk 4 GB is about $100, and iPod nano 4 GB is about $150 at best buy... now if they add the cost of a one year subscription to the price ($60) by the time the store markup it's going to be about $200 for the SanDisk player, like that will sell!

How long will the vendor keep paying?

If they want to put the boots to Apple there is only one way. Sell MP3 tracks that will play on anything including iPods. Sell for equal or less then iTunes, and don't have stupid US only limits.

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Jobs Horns

Losing it.....

Sounds like the record industry really is going down dribbling and they've forgotten where their money comes from. It might be a basic lesson of market economics, but the consumer has the cash. They can choose to subsidise their favourite bands by buying CDs, audio files or whatever, or they can spend their cash on something else instead (good food and beer for example). Looking at the financial results of a lot of record companies, it does look like this is what people are doing, and the companies aren't exactly ingratiating themselves with this type of behaviour. Universal might not like what iTunes is up to, but it's one of the few online music stores that's actually successful. Realistically their choice is a limited amount of money on Apple's terms, or no money at all but on their own terms. As the saying goes, you can't have your cake and eat it.

Personally I think I'll stick to getting my music on CD and taking the chance that I might buy something I don't like.

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Was that Ballmer's idea?

Sounds like something that Steve Ballmer would dream up mid rant.

Whilst the music industry are at it, no doubt the Beast of Redmond would want Dell et al to pay Microsoft $5/month so we can use Windos?

Why don't we get invited to parties like this where they sit around smoking banana skins and coming up with ideas like this?

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Black Helicopters

Wow!

Even more reason to not buy new music

1) The current stuff mostly sucks

2) Now they want to charge me for stuff I don't want.

I guess that I'll buy used CDs if I want anything

I guess they'll destroy themslves just to try to go back to the glory days. Haven't they noticed that there has not been anything new for ten years? Also the number of young people - the prime music buyers - has dropped in the US....

Oh well stupid is as stupid does

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These people are surreal!

Shoe polish? Whatever they are on I really really don't want any.

>I guess they'll destroy themslves just to try to go back to the glory days.

Too right. It's like the old joke about the Irishman captured by cannibals, who inform him he will be killed, his flesh eaten and his skin turned into a canoe. He is asked if he wants a last request, and asks for a fork. Puzzled, the cannibals nevertheless give him a dinner fork, whereupon he starts stabbing himself with it all over the body, screaming "You're not making a f***ing canoe out of me!"

RIP music industry.

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Silver badge

Who Done It??

This idea is actually the brain-child of Rick Rubin, who is now "co-head" of Columbia Records. He was hired to make the major record labels popular with the public again. He announced this concept several months ago, at the same time he said that even he thought record labels were treating customers crappy. At least the idea is sort of innovative, something record company's haven't been too good at lately, maybe it will work...

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Flame

Reading about this in 10 years time ....

..... the kids in History class will wet themselves laughing at the antics of the Labels. They are dying, but they just don't know it. They persist in the notion that we are going to play their game indefinitely. But the ever-widening cracks are very evident. If they won't listen their bands will - Radiohead's recent showing is a good example of kicking the doors down.

For the record - I avoid DRM at all costs, even though I am an iPod owner I only use iTunes download to grab the free stuff and resolutely refuse to pay for DRM content. All of my iPod content is otherwise ripped down from CDs using iTunes own ability. Sony BMG release DRM'd CDs, I don't buy them (nor do, it seems, the public at large).

The message is clear from us, the buying public, we simply don't want any of it. The day of the Indie has dawned, and the last futile clawing grabs by the old guard will fail.

If I were a record company exec I'd be planning my own exit strategy and early retirement.

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Anonymous Coward

spelling

"It's no secret the labels are less than thrilled with Apple's vice on the online music industry."

This meaning of vise is spelled "vise".

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Stop

Vendor? Pay for my music? NEVER.

If it costs J. Random Hardware Maker $50 to make an MP3 player, and they charge the store $75 for it, and the store charges me $100 for it, they're only making $25 per unit - and that's a FAT margin for electronic equipment. That's enough to subsidize my music for a whole 5 months, at which point the equipment maker is making NO money. So either the player has to have built-in obsolescence after 4 months, just so they can actually turn a profit (Which J. Random Luser will reject, because they've become attached to their music player), or they're going to lose money - unless they increase the amount they charge for the damned thing - which J. Random Luser will reject, because they can buy the other brand on the shelf right next to it which hasn't drank the Kool-Aid.

Also, when does the agreement terminate? What if I replace my music player after a year? Does the original vendor have to keep paying for my music indefinitely?

This idea is disgusting.

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Free, as in beer.

What the labels are proposing is offering music for free (as in -beer, not as in -speech). That is, the end-user will not have to pay directly for the downloads -- yet, they still won't have any control over the music files, just the ability to listen to it in the player to which they downloaded it (perhaps even for a limited time, who knows).

It is obvious that they still don't "get it": most users who download music are not doing it because they refuse to pay any money for it, but because they can do whatever they want with the files, and play them, freely, anywhere and anyway they want. This is the reason why CD sales still exist: people still see the value of paying for music, they just want to be able to share it and copy it, and play it in their various devices -- in essence, they want to *own* the files, and feel some sort of entitlement towards their use.

Maintaining the price of CDs high (or deluting them with crap to make a buck) does not attract many people. And offering DRM-laden music files gratis may not be enough to bring the customers back.

-dZ.

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Heart

Good start, anyways.

If I were going shopping for a music player, and I could pay $80 for a player and another $90 for easy, fast access to all the music I want legally so long as I own the player, that would be okay with me. It is obviously just sort of hiding the subscription fee and forcing it upon us though. What if I just want an MP3 player for my CD collection and no subscription? I have a big collection. I don't want to pay for it again.

Also, the real kicker is which music do I have access to? For this to work, it really has to be all music- even the local indie bands. It has to be fair and it has to be open to everyone and every label. That seems almost impossible to implement, but if it only applies to Universal, BMG, etc., it's just going to confuse consumers ("this player gives you access to these labels, that one to those..."). I don't even know which labels most of my favorite bands are on, and they're certainly not all on the same one.

I'm happy to see that they're starting to have at least a little bit of sense about it though. As far as I can tell, the only short-term practical downside to pirating music is that it is a pain in the ass to find anything and the sources are generally shady. Since it seems most people can't be bothered with morals, they need to leverage that sort of thing. I'm sure it's rough competing with 'free,' but there are ways. Saving people time and effort is a good start.

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Hard

Another problem that the scheme totally fails to address is equity in distribution of profits to the artists. Not that this is a concept that the major labels have had any real concept of before, so perhaps nothing changes. When a consumer has to pay for each individual album or tune, they are forced to prioritise and will choose to purchase music from those artists they really like, whilst passing over those that are only of passing interest or perceived to be or poorer quality. Thus the market rewards the better (or really more popular) artist. If the music is free after a fixed price subscription this model starts to fail. Sure more popular artists will be downloaded more often, but there will be a great deal more downloading in general. It becomes impossible to separate the latest mega-hit that is played incessantly by a customer from something that was downloaded, played once and discarded. In many way this might actually still be a good thing, the concept of the mega-artist that rules the airwaves, as we were subjected to in the decades gone, was not great. A much more level playing field may be a generally good thing, but one suspects that the current crop of mega-artists may be less than impressed with the dilution of their royalties stream.

I suspect that the major labels are very much aware that they are dying. But knowing that and going to their shareholders and saying "we are screwed, might as well just shut up shop, sorry, shares now worthless" isn't exactly going to endear them to those shareholders. The guys in charge have a legal obligation to protect their shareholder's interests, they are required to do whatever they can (legally) to discharge this obligation. The peanut gallery simply saying they are stupid and should go away to die misses the point. Not a shareholder? Really? Checked your superannuation/pension/mutual fund's holdings lately?

This is a really hard problem. DRM isn't useful, at least not in its current form. The old glory days model of the industry was always broken unless you were a mega-artist or a major label. A model where artists make their real money from performances and merchandising only works for performing artists, and doesn't help those artists who create recorded works that are intrinsically impossible to perform.

Of course the single major issue that the recorded music industry face is nothing to do with downloaded music. Their glory days were a time where they were the only form of entertainment outside of direct to air TV. Now they compete for the attention of the populace for both time and money with games, home theatre, the internet - and the burgeoning social networks, and most importantly, mobile phones. That and the fact that most of the music that the A&R folks have signed and decided are the next big thing have almost universally been crap.

Common feeling seems to be that a consumer subscription model would be the most appealing. But unless it fully addressed the mechanism by which artists were rewarded it also is doomed to failure. The time when each time your iPod is docked, it phones home to report the tracks it listened to may not be too far away. Building a viable and internationally workable system like this, one that works with each country's individual recording rights, performance rights, and composers rights organisations, in a manner that addresses all artists equitably, makes the efforts Apple went to to get iTunes running look like a walk in the park.

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iTunes-beater? iPod-beater!

Of course this bright idea has one tiny flaw.

There is no way that Apple will play ball with this, so unless Universal et al can convince A LOT of people to get a new MP3 player, they are pretty much screwed before they've even begun.

Then factor in all those people who don't like a subscription-based service (i.e. your music isn't your own, and will vanish when you stop paying).

This sounds more like a Microsoft style vapour announcement in order to force Apple's hand than a real business plan.

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TANSTAAFL

Free? Hah, the manufacturers will pass those fees right on to the consumer. So even if we don't want to use the "free" service we will still be paying for it!

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Anonymous Coward

Re: Anonymous Coward and 'spelling'

The UK uses vice for both the American words 'vice' and 'vise'. I believe the American is historically more correct (if you go back to the origins of the words) but 'vice' is correct for a UK publication.

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Stop

Stupid, so stupid.

So you buy the player, for a premium, as is obvious - (remember folks, SOMEONE must pay the bill).

And then you have to download a NEW piece of jukebox software and it wont recognise your old songs, and it wont work properly, and anyway its subscription, which 95% of users dont like.

So you copy all your songs over, and then you download loads of new 'FREE' stuff - but its mostly CRAP, because music is just not as innovative as it once as - (limited number of chords and changes possible, repetition is inevitable), and as you mostly listen to older stuff, only about 5% of the music will be of interest, and suddenly you realise that you have had the player for six months and have downloaded 20 songs....

Then the thing breaks, and so you take it back, but meanwhile all the songs on your computer have GONE because you used another player and it caused the songs to explode and now you are pissed, and then the player comes back, but its a replacement, and it wont work because your music subscription is 'TIED" to the old player, so you call 'Customer Service', but its in India and the guy is cheerful but you cant understand word ONE that he says...

You go out and buy a new iPod, load all your stuff into iTunes, steal a few tracks from Limewire, Kazaa etc, and you swear blind you will NEVER go anywhere near that Total Music crap ever again.

And you represent approx. 5% of the market of NEW users who will try this nonsense, and thats about 50,000 pissed off people who will go to Apple so FAST, you wont see their dollars for dust.

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Stop

This would be a levy in disguise.

Honestly I see sevral problems with this.

- First if all music players actually have to support this it would be little more than a levy, or hidden tax wich may not go well with customers and some governements (You know, like it's in theory not mandatory to buy windows with a PC, but all the PCs in the shop come bundled with it anyway, until a smart country like germany forces manufacturers to unbundle).

- Second to be really usefull it would need to give access to independant artist, local act, small artists etc... and not just the big labels. This would either be unmanageable or would mean that only the big label's "stars" can benefit from the system, leaving smaller artists in the cold. Who would choose who gets included in the system and get part of the cash?

This would need to be managed by a nonprofit and open to all artists to be fair, otherwise there would be a lot of temptation for the big labels to include only the artist they heavily promoted or invested in, making the labels (and not the consumer) the entity that decides which artist we can listen to.

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More problems

"This would need to be managed by a nonprofit "

Of course such non-profit artists agency organisations already exist. Typically there is one per country, although the roles are split three ways - the artist, the recording artist, the performer (and no they are often not the same people.) Trouble is that these fast become unaccountable private fiefdoms. Being non-profit only means they don't return a profit to shareholders. But handling a lot of money on behalf of artists, for which they charge a service fee, means that they have their snouts well and truly in the trough. You can imagine that the directors of such non-profits don't ever travel cattle class, and largely set their own salaries.

One might guess that the current artists organisations are trying to make it clear that come the day of controlling the Internet cash flow, they are the guys, and not any upstart newcomer. This probably explains a large part of the the behaviour of the RIAA - because it is one of those non-profit gatekeepers.

"otherwise there would be a lot of temptation for the big labels to include only the artist they heavily promoted or invested in, making the labels (and not the consumer) the entity that decides which artist we can listen to."

Exactly. This is precisely the return to the golden age they want.

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Bronze badge

One important fact about the labels

The original record labels were financed by the mobsters. The musicians worked the clubs, then when recording first came along it was expensive and the only people who had any money were the mobsters who owned the clubs, could afford to buy the recording equipment and pay for the distribution channels. Things haven’t changed in 90 years!

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screw that

Never downloaded a track from any service, never will

I much prefer buying the CD and copy it into itunes.

there's just something inherently wrong about downloading tracks from people like Apple or the labels themselves

hell, support your local retailer !!

Tesco's ftw £7.98 per album kicks arse ! (and i can choose what format to copy it as, lossless or MP3, it's MY choice !)

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How is this 'free'?

If the manufacturers will be charged $90 per device assuming a life of 1 1/2 years, they're going to pass it over to the consumer and increase the price of the device to cover it. And since I don't spend that much on music, I'll stick to what I have, thanks.

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Black Helicopters

Their plan?

The new music player you buy for $150.- may come with a 1 year subscription for "free" music. When the year is up, the music industry offers you an extension to your subscription for say, $12.99 a month.

So as a consumer, you make the decision, do I spend the cash for an extended subscription, a year of which will cost me $155.88, or do I buy a brand spanking new player for $150.-? with a year of music!

Either way, someone wins. The music industry gets its yearly payment for music, and the price disparity in music subscriptions drives the hardware sales.

Only loser seems to be the person who already owns a lot of music, who pays double.

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Anonymous Coward

Even More paranoid

Ned, I am with you 110%. The extra ten is that I use a freeware utility to rip my CDs to MP3 before adding them to my iTunes library. I guess the chances of the next iTunes update adding some sort of cripple-ware are quite small but in the end only the paranoid survive.

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