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iTunes and Apple Win Against Record Labels: It's Still 99 Cents a Song

 

By: Spacelab Research Staff
Further proof that we are living in not just a new millenium but an entirely different WORLD in 2006: Apple has just won a wrestling match with not just one but 4 different major record labels. Paradigm shift indeed. Buckle your seatbelts, the ride has just begun, and it's going to get wilder.

In what might be billed as the rise of the people over coporate hegemony (read: monopoly) Apple has renegotiated contracts with Sony BMG Music, EMI Music, Universal Music Group and Warner Music Group. The price of songs bought from the iTunes music store will remain at 99 cents. The song remains the same.

"We renewed our agreement with the major music companies, and we're pleased to continue offering iTunes customers music at 99 cents from our library of more than 3 million songs," said a spokesperson for Apple.

The labels have all been calling for a raise in song prices, to what they call variable pricing, i.e. the ability to charge more for new music or highly popular artists. Steven Jobs and Apple have been absolutely firm on the price, saying that 99 cents a song is the right price and won't raise prices. This has led to the labels calling the price unfair to artists, which led Steve Jobs to call the labels greedy, and then the whole thing started to spin out of control.

Does this mean that Apple can dictate to the labels? Probably not. The labels will still be free to experiment with the way they sell directly to a customer... packaging or 'bundling' other goods with their media. Like videos, artwork, exclusive songs...

Wait a minute. They haven't done that yet, why start now? Innovation is Apple's arena, and the big labels seem to have their record skipping on the same old game of trying to throw down old protectionist practices. At this point, it's almost getting difficult to watch them do it.


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