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Apple: Labels Not Bailing on iTunes
Monday, July 2nd, 2007 at 4:00 PM - by Jeff Gamet
Following reports that Universal Music wont be signing a new contract deal with the iTunes Store, Apple is claiming that isnt true. The two companies are still negotiating a new contract that will keep the worlds largest music label on the worlds largest online music download service, reports the San Francisco Chronicle.
Apple spokesman Tom Neumayr commented "We are still negotiating with Universal. Their music is still on iTunes and their not re-signing is just not true."
Apple charges a flat US$0.99 fee for songs at the iTunes Store, and only recently added $1.29 tracks that feature higher audio quality and are copy protection-free. Record labels, however, want to be able to charge more for popular songs and new releases.
The record industry has been plagued with declining sales for some time now, and many see the attempts by the music industry to move away from Apples flat-fee price structure as a ploy to milk as much money as possible from a shrinking audience.
Convincing Apple to change its iTunes pricing structure doesnt seem likely. The iTunes Store holds abut 70 percent of the legal music download market, and subscription-based competitors have not yet been successful, putting Apple in a strong g negotiating position - and pulling its library from the iTunes Store would effectively kill Universals music download sales.
Jupiter Research analyst Tim Bajarin doesnt expect Universal will be able to get Apple and its CEO Steve Jobs to budge. "In the end, Jobs has the bargaining chips," he said.
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