Universal music is threatening to not renew it’s iTunes contract with Apple. They want to charge more for hit songs, while Apple is sticking to it’s 99 cent price. Apparently Universal would still offer songs for sale, just on a case by case basis. A lot of people are unhappy with Apples proprietary format, but it’s a format dictated by the record companies themselves. According to Steve Jobs, if a breach in the DRM system is found, they have a certain amount of time to repair the problem or the record companies have a right to revoke their contract.
I think Apple on the high ground in this fight. By all accounts, their iTunes profit margin is razor thin, for them it’s not so much about profit from music sales as it is driving iPod sales. Apple is mainly a computer gadget company, they employed the same strategy with their computers. If you want their advanced operating system, you’ve got to buy their box. They use the soft merchandise to sell the physical product. It’s a model the record industry ought to look at.
[…] Project-D: Universal Threatens Apple. Apparently the labels are getting antsy again about being able to change prices on a track-by-track basis. Perhaps Apple’s non-DRM pricing is giving them ammunition. […]
Link Roundup for Wednesday, July 11, 2007 « TechFold
July 11th, 2007