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Warner Music Digital Strategy Chief Talks of Cutting Off Apple
Tuesday, September 27th, 2005 at 3:00 PM - by Brad Cook
Warner Music digital strategy chief Michael Nash has raised the possibility that the record labels could very easily cut off the iTunes Music Store if Apple CEO Steve Jobs is obstinate about download pricing.
"What if Jobs says 39 cents or 29 cents per download -- what then?" he asked during the CTIA Telecomms Show, as reported in an article at The Register. "The industry can say, okay, we'll cut him off -- very few people buy music from digital downloads." Writer Andrew Orlowski said that Mr. Nash "pointed out that most of the music iPods is from [the owners'] collections."
Mr. Orlowski noted that such an action wouldn't kill the iPod, "and the decapitation will really feel no more painful than a gentle shave." He quoted Mr. Nash as saying: "[Jobs] will figure out another model." Mr. Orlowski also pointed out that Apple "barely breaks even on iTunes Music sales, and keeps about four cents of every 99-cent download."
At the same show, Cingular vice-president of consumer data Jim Ryan said of selling music over cellular networks: "There's so much value there we're not going to have a hard time making money."
The trick, as Mr. Orlowski points out, however, is that those US$3 digital downloads to cell phones constitute purchases "you can't keep or transfer." He quotes a music industry executive as observing: "It's going to be difficult to get the consumer to stop thinking about owning music nd think about paying for participation instead."
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