iTunes Is the ‘Control Group’–As in ‘More Control Than We’re Comfortable With’
by John Paczkowski
Posted on August 10, 2007 at 12:01 AM PT
These devices are just repositories for stolen music, and they all know it. So it’s time to get paid for it.”
–Universal Music Group Chairman/CEO Doug Morris on digital music players, November 2006
Universal Music Group appears to have finally taken Steve Jobs’s “Thoughts on Music” essay to heart–although not in the way the Apple CEO might have imagined. Heeding Jobs’s call to abandon digital-rights management, the company announced late yesterday that it will sell at least some of its music catalog online without copy protection for the next few months. Described by UMG as a “test” of the DRM-free option, the effort will see the label selling DRM-free tunes through retailers like Amazon.com, RealNetworks’ Rhapsody and Best Buy.
But not Apple’s iTunes.
Why exclude the third largest music retailer in the United States? Publicly, Universal claims it’s so that iTunes could serve as a “control group” against which to compare its sale of DRM-free downloads elsewhere.
A plausible explanation, but improbable. More than likely, this is an effort to temper Apple’s growing influence in the music industry. A month ago, Universal scrapped its long-term contract with iTunes, opting instead to continue the arrangement on an at-will basis that will give it an easy exit should disagreements over pricing become a problem.
And make no mistake, pricing is a problem. Apple is the No. 3 music retailer overall, according to NPD Group, and its ubiquity in the download space has given the company serious leverage in negotiating pricing with the major record labels. It’s fairly clear then that UMG’s DRM-free effort is a “test” not just of unrestricted digital formats, but of Apple’s growing influence in the music industry.
Said Mike McGuire, vice president of research at Gartner, “It seems like a boldfaced move to blunt Apple’s influence.”
Comments
Sorry, but this has 0% chance of blunting Apple’s influence. So long as Apple controls 80% of the DAP market (which it does) and other stores don’t play nice with iPods (which they don’t), users will just buy what they can from the iTMS. Does Universal really think I’m going to go out and buy a Sansa or a Zune just so I can buy the latest tune from Chamillionaire or their other artists?
Posted by Fred Ochsenhirt at August 10th, 2007 at 1:30 pmEdgar Bronfman, listen to Fred.
I’m a nobody and Edgar Bronfman is a millionaire hundreds of times over, but the man is really off the beaten track. This is what happens when you get disconnected from everyday life because you live in a lap-of-luxury-bubble. Jobs may be a bubble-boy too, but he’s been right and Edgar has been wrong on digital music, so maybe Jobs is sucking some air through a pin-hole in his bubble.
Fred is right–I don’t care where my music comes from as long as it is on the iTunes music store and can play on my iPhone/iPod. I think most people in this regard are like us. DRM-free music will not win out of principle. Why? Because people care about convenience more than anything. They don’t want any hassle in getting their music, movies, tv shows, and video. Hassle means you’ve just lost them. They don’t want to configure a (non-DRM Open-Source) Linux tard-box or tard-pod so that said tard-machine will sync and then play their stuff. They just want their stuff. To play on their iPod. Now. ASAP.
With how well everyone other than the iTunes service is doing in the digital music business and from the drop in CD sales falling faster than a lead brick because Bronfman & Co. are doing such a grand job of managing Universal, if Universal…er, Bronfman is stupid enough to leave iTunes, after a few years, it just might be cheap enough for Disney to buy for pennies on the dollar. I’m sure Disney’s largest shareholder and Board member will be glad to suggest that when the time comes.
Posted by Jim Hillhouse at August 12th, 2007 at 10:48 pm