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News
Music Execs Fear Apple’s Power
Tuesday, February 3rd, 2009 at 1:46 PM - by Bryan Chaffin
Music executives fear the power that Apple has garnered as the biggest game in music sales in the U.S., according to the New York Times. The industry apparently lives in perpetual fear that Apple might pull their music off of the iTunes Store, and most didn't want to give their names to the Times's reporter for "fear of angering Apple."
Music executives also confirmed that dropping DRM was demanded by Apple in exchange for the variable pricing on music downloads that Apple announced at January's Macworld, though one unnamed music exec told reporter Tim Arango that securing distribution for music on the iPhone was a second demand.
At the heart of the issue is the fact that Apple's iTunes Store has become one of the most important hubs for selling music, and the iTunes Store's landing page itself has become a key component of determining which songs become popular.
"Whether the industry likes it or not, the iTunes chart showing the most popular songs in America is a major influencer of how kids today discover and communicate with their friends what kind of music they like," Charlie Walk, a former president of Epic Records, told the Times. "It's a very powerful thing right now in American pop culture and immediately validates a hit song."
The labels, however, resent that power, and are looking for other players to rise up as music retailers. Chief among their targets is the market for renting music on cell phones, which the Times article said is where those execs think the future of the music industry lies.
Not noted by the Times, however, is the fact that those same labels said the same thing about music downloads in general -- that renting music is what people wanted. So far, that has not proven to be the case, and it seems unlikely at this juncture that it will be the case with cell phones.
Music rental services offer unlimited access to entire catalogs of music in exchange for a monthly subscription fee, with the catch that you lose that access when you drop the subscription. Moving to this model has long been a goal of the music industry, which sees it as a way of evening out their revenues and decoupling those revenues from the process of developing hit recording acts.
Then again, confusing their wishes with reality has long been a hallmark of the music industry. For instance, Mr. Arango drew the comparison between the iTunes Store and MTV. The music industry started off giving music videos to outlets like MTV for free in the belief that it would boost music sales, but then regretted that choice after MTV became the success it became.
According to Dave Goldberg, formerly general manager of Yahoo Music and now a venture capitalist at Benchmark Capital, "[Music industry executives] believe they created MTV, and will say they revived Apple."
David Card of Forrester Research, however, offered a very different opinion than what might be found at the labels, saying, "If it weren't for Apple, God knows how bad the music industry would be."
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