Warner Music Considering Not Renewing Long-Term iTunes Contract
Warner Music Group may be the latest content provider to become increasingly restless with Apple's pricing terms according to The Washington Post.
While the iTunes store undoubtedly saved a bleeding music industry, the same can not be said of TV and Movie content. One television studio has gone as far as to pull its content (NBC Universal). The Washington Post states that the difference lies in how TV has many more distribution outlets, whereas music had only 2 when iTunes came.
However, now that music labels have broadened their distribution (example), even music companies appear to be drifting away from iTunes reliance. While none have outright pulled their music, Universal Music Group did not renew its long-term contract to sell songs on iTunes, pursuing rather a more flexible month-to-month option. The article indicates that Warner Music Group is also considering such a move, though no decision has been made.
Still, iTunes represents a major player in music sales. According to the latest numbers, iTunes is the 3rd largest music retailer in the U.S.
While the iTunes store undoubtedly saved a bleeding music industry, the same can not be said of TV and Movie content. One television studio has gone as far as to pull its content (NBC Universal). The Washington Post states that the difference lies in how TV has many more distribution outlets, whereas music had only 2 when iTunes came.
However, now that music labels have broadened their distribution (example), even music companies appear to be drifting away from iTunes reliance. While none have outright pulled their music, Universal Music Group did not renew its long-term contract to sell songs on iTunes, pursuing rather a more flexible month-to-month option. The article indicates that Warner Music Group is also considering such a move, though no decision has been made.
Still, iTunes represents a major player in music sales. According to the latest numbers, iTunes is the 3rd largest music retailer in the U.S.
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56 months ago
Well. Maybe Apple will move to a more indie catalog and function as a pseudo label of thier own.
56 months ago
No surprise! iTunes was able to bully everyone around, but as soon as alternatives show their tail, customers are sure to look elsewhere
56 months ago
I really don't get why content providers are looking to 'play hardball' with Apple by threatening to balkanize the legal distribution of digital music, especially when the iPod holds an 80% share of the market, and iTunes is, so far, the only digital music model to have shown steady profits and customer growth.
You'd think that they forgot how they got into this mess in the first place.
You'd think that they forgot how they got into this mess in the first place.
56 months ago
I don't fear music companies leaving iTunes and I don't think Apple should either. Pretty much everyone I know uses iTunes to buy their music these days. I can't even remember the last time I bought or went with someone to buy an actual cd either. Any music company that leaves iTunes will likely see a huge drop in sales. With the enormous number of iPods shipped every year it is obvious iTunes is the reasonable choice for all major music companies. Any company that decides to leave will most likely see a huge drop in online sales, but they will most likely come crawling back to Apple. Something a lot of companies might overlook is that iTunes is a trusted online music store. Most people will not buy from any random music store online, instead they want something trusted that is reliable and that just happens to be what iTunes is.
56 months ago
If this sort of thing goes on, the iTunes store could turn out to be like those Soviet department stores --- rows upon rows of nearly empty shelves.
56 months ago
How can Warner Music Group kick sand in the face of the number 3 music retailer?
Apple will continue to grow, (10,000,000 iPods sold this quarter) and Warner (if they jump ship completely) will end up the big loser.
Apple will continue to grow, (10,000,000 iPods sold this quarter) and Warner (if they jump ship completely) will end up the big loser.
56 months ago
Yearly contract or no, and temporary posturing/withdrawals aside, the big content providers will keep dealing with iTunes because it makes them increasing amounts of money. And they'll deal with other online music stores too. Nearly all of which will flounder, but competition is good. The ones that emerge as successful will be those that move towards DRM-free and really high quality. Like Amazon MP3 Store, and especially iTunes. All of those songs will play on iPods and non-iPods alike, and can be managed through iTunes.
Meanwhile iPods--Apple's real money-maker in music--will continue to sell through the roof. If anything, the emergence of other iPod-friendly stores like Amazon will HELP Apple, not hurt them. A major label could go ALL-Amazon and not iTunes and people would STILL buy iPods to play those songs.
Now, if a major label goes all-Microsoft, all-Windows-Media, I don't expect that to work out well for anyone. It would be a short-lived experiment, and their catalog would then be back on the iPod (whether on iTunes or not). And Warner doesn't seem to be talking about anything even THAT serious--just a non-renewal of contracts and exclusives, not pulling of music from iTunes.
The industry is changing, and Apple may not get yearly commitments as easily. But they'll still sell more iPods and more music downloads than ever before, they'll still get exclusive promo deals, and the whole situation will still get better and better for Apple AND for consumers AND for the music labels themselves--whether they fight the changes or not. And video content owners will come to catch on too.
Meanwhile iPods--Apple's real money-maker in music--will continue to sell through the roof. If anything, the emergence of other iPod-friendly stores like Amazon will HELP Apple, not hurt them. A major label could go ALL-Amazon and not iTunes and people would STILL buy iPods to play those songs.
Now, if a major label goes all-Microsoft, all-Windows-Media, I don't expect that to work out well for anyone. It would be a short-lived experiment, and their catalog would then be back on the iPod (whether on iTunes or not). And Warner doesn't seem to be talking about anything even THAT serious--just a non-renewal of contracts and exclusives, not pulling of music from iTunes.
The industry is changing, and Apple may not get yearly commitments as easily. But they'll still sell more iPods and more music downloads than ever before, they'll still get exclusive promo deals, and the whole situation will still get better and better for Apple AND for consumers AND for the music labels themselves--whether they fight the changes or not. And video content owners will come to catch on too.
56 months ago
These media companies are archaic. I guess they want everyone under 30 to go back to stealing music. Ridiculous.
The vast majority of consumers are NOT going to stake out multiple online music distributors to get a specific artist or song.
The vast majority of consumers are NOT going to stake out multiple online music distributors to get a specific artist or song.
56 months ago
after 3 years of legal music downloads i might have to go back to file sharing. oh well.....
56 months ago
Can someone please enlighten me why these labels feel it's better to go month to month rather than long term? Do they have to pay any money to apple each month vs. a set fee? I have no idea how apple contracts with the labels....
Is it simply to have the option to pull out ( :D ) whenever they want?
Is it simply to have the option to pull out ( :D ) whenever they want?
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