Business Week refutes FT.com’s Apple story, quotes “people in a position to know”

March 20, 2008

Yesterday I posted a story from the FT that basically says Apple and the labels are talking about an unlimited download subscription for people who buy and iPod or iPhone. Angry about being scooped Bussiness Week posted a story saying the Financial Times has either been speaking with Snoop Dog or smoking his stuff, cause the Apple story was bull. Where is their evidence you ask?

Reports that Apple is discussing an “all-you-can-eat” subscription music service with major record labels are overblown, say people in a position to know.

Thats right they are refuting the Financial Times story by paraphrasing an HR Block tag line. They got people? Wait you say, surely Business Weeks has more evidence then that, they must have a quote, a named source, something more substantial. Here it is, the smoking gun:

[The Apple unlimited subscription] would use that premium to create a pool of revenue, a portion of which would be divided among the major music labels, the newspaper said.

Trouble is, no such talks are under way, according to people familiar with Apple’s plans. An Apple spokesperson declined to comment. Insiders at major music labels were similarly dismissive.

So lets review, “people in a position to know” told Business Week’s Arik Hesseldahl that nothing was going on between Apple and the labels and this version of the story was corroborated by “people familiar with Apple’s plans”. The PR Flacks at Apple and the labels hung-up everytime Arik called them and he took it as evidence that the Financial times was wrong.

Now I’m not saying that the FT story was some great piece of reporting or that I necessarily believe all of it, but Business Week needs raise its game a bit. When a venerable news weekly with ungodly sums of money and decades worth of reporting experience sitting on its bench runs with poorly researched crap with no credible citations or sources, its no better then a blog. I dont want major weeklies running with innuendo, rumor and hearsay. Thats what I’m here for. I want them to give me some facts with names of real people attached to them, so I can poke holes and look for flaws or fallacies. There is a reason bloggers are not journalist and its really important that the journalist remember that.


Flagging music industry seeks reincarnation as iPod upsell

March 19, 2008

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The once haughty recorded music industry has finally collapsed under the weight of its own greed and inefficiency. We can officially call the industry dead, not when the companies are shuttered (because a number of them will survive), but when their main business model is radically different. According to an article in todays Financial Times the music industry is edging ever closer to signing a deal with Apple Computers which may do just that.

The article discusses a deal the two sides are trying to hammer out to shift the labels economics from collecting money based on the number of songs/CD’s that are sold to collecting money based on the number of iPod’s or iPhone’s thats are sold. Its a complex deal that the article emphasizes may not get done, however for the labels to even consider it highlights how very desperate they’ve become. This deal would certainly spell the end of the traditional record labels as their status as added value intermediaries (ie important middlemen) fades even further. Also read a related article which is a bit of a counter-point to the first article albeit with little new information.


Suicide Watch: Universal Music Demands Customers Use P2P

July 2, 2007

umg_logo.jpgYesterday Big JG, the soup eater, posted a note about Universals Music’s mad dash to ends its tortured existence as the worlds largest purveyor of little plastics discs. In an act of classic Seppuku, Universal Music is reported to have told Apple that it was not going to renew its contract to sell music through iTunes. The move comes as a bit of a shock given that the Universal is reported to net somewhere in the $200 million dollar range through iTunes sales. Apple’s steadfast refusal to allow the labels to “wet their beaks” from iPod sales is widely believe to be the main reason behind the move by Universal.

There are two huge problems with Universal’s withdrawal from iTunes. First, they are the only ones doing it. Both Sony/BMG and EMI are on board with Apple and Warner Music is bleeding money and employees so fast it wouldnt dare walk away from any source of income. Second, by refusing to sell its music through iTunes, universal will not effect the consumption of its music, iPod sales or iTunes popularity. People will just get the content that isnt on iTunes they way they get 70-80% of the content on their iPod, from CD’s and P2P networks. The big loser therefore can only be Universal Music, which stands to loose a couple hundred million dollars along with a couple million paying customers. In these lean times for the music industry turning away either is the fastest way to quick death I can think of.

Here is a simple law of survival economics that all digital entertainment business MUST LEARN! “A little money is better then NO money.”


EMI Goes DRM Free. Offers MP3 trade-in. Really!

April 2, 2007

images.jpgI know I couldnt believe it myself. But unless everyone from the BBC to the WSJ has gotten it wrong its no joke. Sure it was first reported by the good folks that brought you the RARA joke but thats just a coincidence. The jist of this is that EMI will be releasing DRM free versions of some of its catalogue on iTunes. From the press release come news of their upgrade program:

Consumers who have already purchased standard tracks or albums with DRM will be able to upgrade their digital music for $0.30/€0.30/£0.20 per track. All EMI music videos will also be available on the iTunes Store DRM-free with no change in price.

Its only taken 10 years for one of the labels to finally give-in and that seems to only have happened with the prodding of iPod/iTunes maven Steve Jobs, who was on hand with the iPhone to show of the new EMI tracks. EMI remains the only major to make this transition but watch for the others to follow lemming like their decision within the year.

EMI has started down the road to building a digital music business by tearing down one of the many roadblocks to competing with free alternatives. Its a start. So happy trails EMI and best of luck.


Fallout from Steve Jobs anti-DRM Bomb

February 9, 2007

The image “https://i2.wp.com/www.crowrunning.com/fallout_shelter/fallout_logo_small.jpg” cannot be displayed, because it contains errors.Earlier this week the Chief Evangelical Officer of Apple Computers Inc., Steve Jobs, channeled the spirit of Ronald Regan (media moguls tear down these digital walls) and wrote an open letter (read my post here) aimed at the music barron’s in their Bling’d-out offices. In it he basically says that DRM sucks, iPods rock and the labels dont grok the implications of either. Well it was a shot heard around the blogosphere and the commentary came fast a furious from low caste bloggers like myself.

screenhunter_014.jpgNot to be outdone by the rabble, the unfortunately named IFPI strongman, John Kennedy, posted a retort to Steve (El Capitain) Jobs. His response could be summed up in two words: “You First!” In what I imagine is a whining monotone, he suggests that Steve drop DRM from Apple, Disney and Pixar products as an example to the industry.

Read the rest of this entry »


Steve Jobs Steals My Math and uses it to Smacks Detractors

February 6, 2007

People have been belly-aching about Apple’s iTunes DRM for months, complaining that it’s somehow more restrictive then says Microsoft’s brown brick, the Zune. Steve (El Capitain) Job’s has been largely silent. Until now. Today Apple’s CEO came out swinging. In a letter posted on the Apple site, not only does he lay-the-smack-down on the “free iTunes” contingent but he steals my math to do it. A large part of his argument virtually mirrors the analysis I did way back in April of last year. Namely that most of the music on iPods is not from iTunes. Should I expect a check?

My five sentence summary of Steve’s 1800 word rant is:
iPods rock, DRM sucks. The labels made me put DRM on iPods before they’d license any music to me. If I open Apple’s DRM to every joe-blow company that comes asking Apple’s products would suck as much as Microsoft’s Zune. Only 3% of the songs on most iPods is from the iTunes music store the rest is from other sources.

My favorite quote:

“The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.”

Read the full letter here, to find the first two alternatives.

Thanks to Jake Walker for the news via Pho.


iTunes Proves DRM is Killing Music

December 12, 2006

Sensation headlines are great, El Reg’s mocking coverage is even better and Forrester Research is the best (for sensation headlines anyway). The Register is running a story with the somewhat overstated headline “iTunes Sales Collapsing“, based on some research put out by Forrester that seems to show that iTunes music is flat or even falling a bit.

While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring’s rebound wasn’t repeated this year.

And it isn’t just Apple’s problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole.

The article goes on to point out that despite the fall in iTunes sales iPod player shipments are way up.

The ominous trend comes despite healthy growth for digital music players – iPod sales quadrupled in the period monitored by Forrester – and Apple’s growing inventory – the company has added videos and movies to its established inventory of music downloads and audiobooks.

Of course if your a regular reader of this blog you already knew this. Apprently fewer and rfewer people are being sucked into buying the DRM crippled songs on iTunes for .99 cents a pop, but folks are still flocking to the iPods. The good folks at the Reg pin the blame for iTunes stumbling on Apple’s use of DRM in the music store. Andrew Orlowski goes so far as to say that we have entered the “final days” of DRM’d music.