Apple Set to Steamroll the Big Four at the iTunes Bargaining Table

Illustration for article titled Apple Set to Steamroll the Big Four at the iTunes Bargaining Table

According to Reuters, it's Apple that's going to be pressuring the Big Four for concessions as contract renewals take place over the next month, not the other way around. While they might be begging for an iTunes subscription service, Apple will be shoving them in EMI's footsteps, toward selling more music without DRM.

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One unnamed record exec actually admits that "EMI struck a deal that puts all of us at a disadvantage." More interesting is the exec's subsequent nugget that "If Universal goes, then everyone has to follow." Reuters hints that Universal is in fact contemplating a DRM-free partnership with...Amazon. The labels are clearly wary of the monster 100 million-selling iPod/iTunes machine.

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Given that Apple has the upper hand here—one that seems to be getting stronger—and will probably be taking from the labels at the negotiating table rather than giving, why has "there has even been talk of [the labels] getting a cut of sales of iPods themselves"? It's never going to happen. Ever.

If "privately, executives accept that following EMI's move it is only a matter of time" why not go ahead and make the move and start chalking up more sales online now, rather than later? It would be in their best interest to take the initiative while they still wield a fair amount of bargaining power—Steve smells weakness, and if they crawl back later, he's going to take them for the ride of their lives.

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Apple seen having upper hand in music negotiations [Reuters via Mac Rumors]

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DISCUSSION

So, can someone explain something to me.. Apple wants to start selling DRM-free music, but does that also mean in a format that can work on any device? (In other words - MP3 format?) What people want is to play their music on whatever they want, and the standard format is MP3. If Apple is going to continue to use AAC (ACK!) then I fail to see how this is really benefiting the consumer. The only one getting a good deal would be Apple who then can get out of their European lawsuits.

If Apple is selling this DRM-free stuff in MP3, kudos to Jobs and Apple for doing something right for the consumer. But, I suspect they are only trying to help themselves - as usual.