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Music Media Businesses Microsoft

Music Labels Charge Too Much For Microsoft 366

Posted by Zonk
from the i-share-microsoft's-opinion dept.
Bret540 writes "Yahoo is reporting that Microsoft has ended license talks with four major music labels. From the article: 'The paper [the Wall Street Journal] reported negotiations broke down Friday over what Microsoft considered high royalty rates.' How much more can the music labels demand when even Microsoft won't go to market? With other recent developments, one must wonder how long the music industry can keep pushing."
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Music Labels Charge Too Much For Microsoft

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  • Music Industry? (Score:5, Insightful)

    by gtrubetskoy (734033) * on Tuesday October 04, 2005 @03:06PM (#13715894)

    one must wonder how long the music industry can keep pushing.

    The editors must mean the greedy recording companies - the music industry itself is not inherently evil, it will outlive the current system and be there for as long humans inhabit this planet.

    • With other recent developments, one must wonder how long the music industry can keep pushing."
      The Riaa will keep pushing until long after no one buys outrageously priced music anymore, and their sole source of revenue is suing individuals for humming trademarked songs in their cars without paying royalties....
    • Big greedy company stops talking to even bigger greedier companies over bilking customer base. So what's new?
    • Re:Music Industry? (Score:5, Interesting)

      by cosinezero (833532) on Tuesday October 04, 2005 @03:38PM (#13716292)
      No, I'm sorry... I'm a dj, a musician, and date a girl who worked for years at world-famous nightclub. The music industry as a whole is inherently evil. Those people break violate contracts in a week than microsoft does in a year...
      • by MightyMartian (840721) on Tuesday October 04, 2005 @06:19PM (#13717868) Journal
        Hello, I'm Bob, a record company executive. I wake up at 5:30am, bright and early, and start the day by filling my kids' toothpaste tube with napalm. Then, at 6:00am, I rape my wife while listening to the latest Britney Spears digitally enhanced crapfest. At 6:02am, I start my shower. At 6:05am, I towel off and disarm my half-crazed wife. At 6:10am I'm out the door. I check my traps for any stray cats, dogs are layabouts, and cut off their heads and dine on their livers. At 6:30am I wipe the blood from my mouth and drive my Hummer to work, making sure to run over as many people as I can manage, in particular anybody with an iPod. I collect their still-warm body parts and put them in the trunk. It's an eat-in day! At 8:15pm I arrive at work, take the contracts from the useless bumbs I signed six months ago who delivered me one top-twenty before tanking at 52, burn the contracts and send a hand-written note to their mommas warning them never to come after me. At 8:45pm, I assure Steve Jobs over the phone that I and Apple can come to some arrangement. At 9:00pm I play a recording of the conversation with my CEO, and we laugh and plot how we'll destroy that freeky lunatic.

        It's going to be a lovely day.

    • But when you think about it, it is all really fine. We'll go back to ripping and p2ping and everything will settle down. At least, we won't have DRM crap.
    • The labels are not really being greedy. They are fighting for their survival. They have been in control of who hears what for the last 50 years. In order to remain, they have to be the ONLY place that they can go to, or even through. The internet is a disaster to them. Not so much because ppl are downloading music for free, but because it allows artists to do their own marketing, their own music, etc.. In addition, while the MS world charges top dollars for lousy recording programs, the OSS world is pickin
    • by kabz (770151)
      1. Antagonize Ballmer.
      2. Screw chairs to floor.
      3. Patent process of screwing chairs to floor.
      4. ???
      5. Profit!

      Poor Steve Jobs. He must be in danger of herniating himself with laughter over this mess.
  • Cool... (Score:5, Funny)

    by gowen (141411) <gwowen@gmail.com> on Tuesday October 04, 2005 @03:07PM (#13715896) Homepage Journal
    They'll fail to agree on this issue, but decide to organise a joint conference next year entitled : "Price Gouging For Fun And Profit : How to make a de facto monopoly work for you"
  • by It doesn't come easy (695416) * on Tuesday October 04, 2005 @03:07PM (#13715903) Journal
    According to several people briefed on the matter, the labels separately were seeking royalty payments of $6 to $8 per user, per month. People close to the labels say that is in line with what existing subscription-music services pay, the Journal reported.

    Seems rather high, considering you still have to pay $1 or more for each song you download, and the song is likely to be encumbered with DRM, and the quality is usually less than a rip from a CD. One would get the feeling the music labels don't really want to sell songs via the Internet...
    • Well considering that the RIAA just handed out a truckload of lawsuits to various college student super-nodes, I think the labels are hoping that they can bring the download model down with 'daddy' to take care of all those nasty p2p users.

      It really wouldn't shock me if that was the motive.
    • by Anonymous Coward
      Now if you want something to blow your mind (well okay, not that suprising really). I was reading the iaudio forum and all the people there were the exact opposite. We love DRM, what's wrong with you?! We love DRM! My take is they don't see the potential/real risks. So at least from this view, it seems like the industry has designed the trap with enough space that average people are willing to ensnare themselves.

      http://www.iaudiophile.net/forums/showthread.php?t =4254 [iaudiophile.net]

      And this thread is about WMP DRM support
    • Seems rather high, considering you still have to pay $1 or more for each song you download, and the song is likely to be encumbered with DRM, and the quality is usually less than a rip from a CD.
      and it doesn't come with cover art (expensive!) and Microsoft, not the RIAA labels would presumably bear most of the distribution costs (bandwidth, storage).
  • Yahoo! (Score:4, Interesting)

    by duerra (684053) * on Tuesday October 04, 2005 @03:07PM (#13715905) Homepage
    They say that the current subscription services are being charged in the %6-8/month range, which is what was being offered to Microsoft. If this is true, how is it that Yahoo! can afford such a low subscription rate?
  • by Anonymous Coward on Tuesday October 04, 2005 @03:08PM (#13715911)
    They'll push until Microsoft owns them
  • Royalty payments of $6-$8 per month? I wonder if they're all colluding on pricing again.
  • High royalty rates? (Score:3, Interesting)

    by Fulcrum of Evil (560260) on Tuesday October 04, 2005 @03:09PM (#13715934)

    'The paper [the Wall Street Journal] reported negotiations broke down Friday over what Microsoft considered high royalty rates.'

    Is anybody really surprised? Well, maybe a little - MS has shown its willingness to lose billions to get into a market.

  • Wrong question (Score:5, Interesting)

    by Mr. Underbridge (666784) on Tuesday October 04, 2005 @03:09PM (#13715935)
    " How much more can the music labels demand when even Microsoft won't go to market?"

    That's not it. More like, "how much more of the cut is MS demanding (compared to others in the market) that the RIAA won't do it?"

    And,

    "How long is MS willing to let Apple own music before they realize that the music itself is a loss-leader?"

    • MS and the RIAA is like two spoiled kids fighting over something. Each wants it but wants it even more so that the other CAN'T get it. What's a billion or two between two slowly dying virtual monopolies.
    • Howz music the loss leader - you say they're making big bucks on the iPods?

      That's kind of a dumb model - you want it the other way around. You want the thing they buy once to be a loss leader, but the thing they keep paying for to make you money...

      --LWM
      • Howz music the loss leader - you say they're making big bucks on the iPods?

        For Apple, yes and yes. They make tons of cash from the iPod, and only recently did the iTMS become even moderately lucrative. They intended it to hopefully break even.

        That's kind of a dumb model - you want it the other way around. You want the thing they buy once to be a loss leader, but the thing they keep paying for to make you money...

        That's the usual way, but here not so much. The main reason (I think) is that iPods aren

      • they're making tons of money on the ipod, and making a lot of money on itunes, too...
      • OTOH, that hasn't worked so well for MS and the X-Box.
      • Re:Wrong question (Score:3, Insightful)

        by shmlco (594907)
        Apple probably makes $150 on a $399 pod easy. Apple makes about $0.20 per song off itunes. So if you do the math, people need to buy 750 songs to equal the profit off a single pod.

        And pods break, wear out, get lost or stolen, and like phones, get replaced every few years by newer models with cooler features. In a way it's a symbiosis. Pods make people want songs, who need pods to play them, who buy more songs...

  • by glomph (2644) on Tuesday October 04, 2005 @03:10PM (#13715944) Homepage Journal
    Hard to believe, but they have agreed with His Steveness, and told the cartel to stuff it. Takes one monopolist to know another, or an oligopoly, at least.
  • It'll Never Happen (Score:5, Interesting)

    by fragmentate (908035) * <jdspilled&gmail,com> on Tuesday October 04, 2005 @03:10PM (#13715945) Journal
    ...one must wonder how long the music industry can keep pushing.

    Indefinitely?

    The majority of people are ignorant to these demands. The only informed people are the ones that follow the blogs, and news sites (like /.); last I knew, I don't think /. had readership on the scale necessary to effect change.

    The answer is a simple one to state, but a difficult one to implement. While media is completely different from every product in that it is possible to reproduce (copy) it, I also believe it's longevity implies copies should be permitted. Let's look at CD's, even if you take care of them they wear out. You didn't buy the CD for the plastic disk, you bought it for the music on the plastic disk. Compare that to say, a TV, when it dies, it dies, you have to buy a new one, period. You can't copy it. On the other hand, you didn't purchase what you're going to watch on the TV. And you can't blame the TV's or their manufacturers for crappy TV stations. The TV manufacturers have to make the TV last longer or the reputation is at stake. They can store music on a low quality media, and get away with making you buy it repeatedly... so the media and the music can both suck, and you're screwed.

    The point is everything the music industry is involved in revolves around greed, plain and simple. You don't believe there was some greedy bastard at each of the record labels wringing his hands in glee when he realized the recurring income from worn out CD's?

    Stop buying it. Or stop bitching about it.

    That's what we have to do, present company included...
  • by Dachannien (617929) on Tuesday October 04, 2005 @03:10PM (#13715946)
    ...three cheers for Microsoft!

    This represents a stunning defeat for the music industry, and combined with Apple's iTMS success, could indicate the beginnings not only of a change in how music is priced, but also of a change in how music is produced, promoted, and distributed - i.e., without the RIAA and its members.

    • Microsoft isn't stupid. They expect to own the entire music-distribution business before it's all over, and when that happens you'll think fondly of the old Content Cartel.

      The basic questions have all been answered, now they're just arguing over price.

    • by nine-times (778537) <nine.times@gmail.com> on Tuesday October 04, 2005 @03:43PM (#13716343) Homepage
      How about the equally unlikely, "three cheers for the RIAA!" for keeping Microsoft out of the music business? With all the knack Microsoft has for leveraging their monopolies, I don't want anyone in control of the content delivery, the content format, AND the device the content plays on, all by making deals with a monopoly that controls the content production.

      It's a bit disconcerting when it's Apple. It'd be downright frightening if it's Microsoft.

  • by LunaticTippy (872397) on Tuesday October 04, 2005 @03:10PM (#13715947)
    It's strange to see microsoft in a relatively powerless position.

    I'm not sure how to feel about this situation.

    • MS is NOT in a powerless situation. They simply don't want to pay that much money and are taking their ball and going home. We ar seeing a fight between two of the four greediest entities on Earth (the other two being Big Oil and the Pharmacutical (sp?) industies). Nothing more. They will return to the bargaining table soon enough.
    • Winners and loosers (Score:3, Interesting)

      by DragonHawk (21256)
      "It's strange to see microsoft in a relatively powerless position. I'm not sure how to feel about this situation."

      There's an old saying: When elephants fight, it is the grass that gets trampled.

      I can assure you that regardless of whether MSFT wins or RIAA wins, consumers will loose.
    • Walmart is making noises about taking on the music industry. Walmart is... well...

      Walmart often tells suppliers exactly how to run their business. Walmart demands to see the finances. Walmart demands that an advertising budget be slashed so that the price can be slashed, and Walmart doesn't get "no" for an answer. Walmart drives most suppliers to the edge of bankruptcy, and a good number of suppliers go over the edge. Walmart tells a supplier how much will be produced and when it will show up. Walmart dicta
  • When.. (Score:4, Interesting)

    by aero2600-5 (797736) on Tuesday October 04, 2005 @03:11PM (#13715957)
    This is just my two cents, but I belive the music industry executives to be complete and total morons. When will they realize that people will not continue to buy your product when you're overcharging? This is basic economics. If a dairy wanted to charge $20 for a gallon of milk, do you think anyone would buy it? No. There are better ways to support the artist than buying their music. Steal the music, go to their concerts, but their t-shirts.

    And here's a hint to the music industry: Collective Licensing. You will continue to be forced to lower your royalties until you reach this.
    Voluntary Collective Licensing [eff.org]

    Your time as the bully is over.

    Aero
    • "There are better ways to support the artist than buying their music. Steal the music, go to their concerts, [buy] their t-shirts." (emphasis mine)

      I'm confused... how is stealing an artist's works supporting that artist?

      • "I'm confused... how is stealing an artist's works supporting that artist?"

        I agree that it doesn't make sense at first, and I've made this argument so many times that I tend to think that everyone already understates the numbers behind it.

        Let's try this hypothetical situation. Suppose you have $40 a month that you can spend on music. I spend about this much. Now, with your $40, you can buy two new CDs at $20 a piece. Of this amount, being generous, let's say the artist recieves $1 per CD. Now, suppose
        • Re:When.. (Score:4, Informative)

          by the arbiter (696473) on Tuesday October 04, 2005 @04:27PM (#13716744)
          The contracts aren't guesses. The going royalty rate is 5% of net sales, minus expenses. Put another way, one million albums sold at twenty bucks a pop returns about 20 million gross dollars.

          Of which the record stores get about 2-3 million.
          Of which the artist sees 1 million, BEFORE all the expenses (promotion of every kind, recording of the album, mastering of the album, artwork on the album, videos (realize that a video typically runs $500,000 by itself) payola, 'promotional tours', etc.)

          The record company makes at least 17 million and all their expenses are covered out of pocket by the artist.

          There's some good reasons I don't play for a living anymore...it's not much of a living, making 30,000/yr before taxes.
    • Re:When.. (Score:2, Funny)

      by LuciferBlack (905438)
      From eff.org : "The current battles surrounding peer-to-peer file sharing are a losing proposition for everyone. The record labels continue to face lackluster sales, while the tens of millions of American file sharers--American music fans--are made to feel like criminals." Lackluster sales? Yeah I don't think so. "American music fans" ... Whoever wrote that needs to quit trying to blow everyone at the same time.
      • Re:When.. (Score:3, Insightful)

        by aero2600-5 (797736)
        "Whoever wrote that needs to quit trying to blow everyone at the same time."

        This is going to sound harsh, but when you're trying to solve a problem with a compromise, your job is blow everyone at the same time.

        Aero
    • Re:When.. (Score:4, Interesting)

      by Karma_fucker_sucker (898393) on Tuesday October 04, 2005 @03:18PM (#13716067)
      Steal the music,...

      Oh, please no. That'll just give them (RIAA, record companies) ammo for the legislatures that there needs to be more DRM, they need more laws to allow them invade our machines, more laws allowing for all of those stupid lawsuits that they're filing, it gives an excuse as to why their sales are declining - regardless if it's true or not, and more that is not coming to me, now.

      Lastly, it's just wrong. I wouldn't like it if you did that to me regardless of how noble your intentions are.

    • Re:When.. (Score:3, Interesting)

      by dwandy (907337)
      Sadly they're not total morons ... perhaps idiot savants.
      Music (art in general) is a human thing that exists without the riaa, without a compensation model, and has existed for all of the history of mankind, and will exist to the end of the human race.
      There is no other monopoly ('cept maybe food...maybe!) other than music that is guaranteed by humanity.
      The telephone company (the original modern monopoly?) is not even guaranteed an income - but those that can monetize music are guaranteed an income. If yo
    • "complete and total morons"

      Brought to you by the hyper intelligent makers of Hip-hop and Rap music...

      They need government protection to make money, since they are too dumb to figure out how to make money any other way.
    • Re:When.. (Score:3, Interesting)

      by kraut (2788)
      ?This is just my two cents, but I belive the music industry executives to be complete and total morons.
      Quite possibly they are, on the other hand I've not actually heard of any major record label going bankrupt, so maybe they're not that stupid after all.

      > When will they realize that people will not continue to buy your product when you're overcharging?
      Perhaps when enough people stop buying CDs because they find them too expensive. It hasn't happened yet.

      > This is basic economics. If a dairy wanted t
    • Re:When.. (Score:3, Funny)

      by keraneuology (760918)

      I belive the music industry executives to be complete and total morons. When will they realize that people will not continue to buy your product when you're overcharging?

      People are buying the CDs. In droves. Even though they are being overcharged. If you put it out, it will be bought. Look at all of the kids who buy $250 basketball shoes just because some drug using rapist endorses them on the TV - if Kobe Bryant started pitching condoms the youth would rush to jump on the safe sex bandwagon. Fame re

    • Re:When.. (Score:4, Funny)

      by hackronym0 (812439) on Tuesday October 04, 2005 @04:41PM (#13716881)
      Basic Economics for RIAA, taught by .... Spinal Tap.

      Spinal Tap: Most people charge $10 for 10 songs, but our store here charges $11.

      Interviewer: But won't less people buy them, effectively lowering your profits?

      Spinal Tap: But we're charging $11, they only charge $10

  • by circletimessquare (444983) <circletimessquar ... m ['l.c' in gap]> on Tuesday October 04, 2005 @03:11PM (#13715958) Homepage Journal
    it's all about power: the music conglomerates and the riaa exist to control music distribution in a world of LPs, cassettes, and CDs

    in a world of cable modems and fiber optics, who controls the music distribution?

    the tech companies do

    bill gates and steve jobs do

    so if their handlers are smart, they will just start signing artists themselves
    • "in a world of cable modems and fiber optics, who controls the music distribution?
      the tech companies do
      bill gates and steve jobs do
      so if their handlers are smart, they will just start signing artists themselves
      " Well, except then you'd have single companies in charge of production, distribution, and retail. Unless they allowed others to distribute and/or retail the music as well, they'd get slapped with charges. Not that getting slapped with charges has had any affect in the past... but FWIW, they'
  • by bl968 (190792) on Tuesday October 04, 2005 @03:11PM (#13715960) Journal
    While not the biggest fan of on-line music I have occasionally bought albums via iTunes. However 9.99 is the max I am willing to pay for any downloadable album. So I have skipped four albums in the last two weeks due to their pricing being higher ranging from 13.99 to 19.99 for the downloadable album. That works out to $39.96 in lost sales if you work it out using my max price. Why do they think we are fool enough to pay as much for a downloaded album as we would for a complete packaged CD. I also notified Apple of my decision and why so they could use it as ammunition in their fight against the labels. I am waiting for the price fixing lawsuit and the abuse of copyright claims against the recording labels. Maybe one day. I know I am a dreamer.
    • "Maybe one day. I know I am a dreamer."

      But you're not the only one,
      We hope some day to join you,
      And the world will listen free.

      My apologies to Lennon, but I couldn't help it.

      BTW, to which label do I need to make my check out to for using Imagine in a parody? I'm sure even that will require royalty payments soon enough...
      • BTW, to which label do I need to make my check out to for using Imagine in a parody? I'm sure even that will require royalty payments soon enough...

        I expect the cease and desist letters over my sig any day now.
    • by Tsiangkun (746511) on Tuesday October 04, 2005 @03:28PM (#13716192) Homepage
      Exactly.

      I can go to $USED_CD_STORE and buy $ALBUM used for $3.99-$9.99. I walk outside, sit on the curb and rip it to my powerbook in a higher bit rate than the downloadable version. Three minutes later, I walk back into the store and sell the disc back for $2.50.

      I'm not going to pay $14, $15, .. $25 for a digital album.
    • It's not $40 in lost sales if there are 8-10 customers willing to pay the extra cost for every customer who is not. If this ratio is greater than 10:1, then they're making more money.

      I'm certain they have people analyzing exactly what price point maximizes revenue.
  • by Red Flayer (890720) on Tuesday October 04, 2005 @03:11PM (#13715964) Journal
    The recording companies will push as long and as hard as they can -- they'll pause when someone pushes back.

    Only by continually testing the line will they be able to determine how much the market will bear, which is how they determine their prices. MS breaking off negotiations is a negotiating tactic in itself -- MS has communicated to the recording companies that they are demanding too much.

    Wait a month or two, the recording industry will come down in price, and both sides will have a deal they are content with.

    • by Overly Critical Guy (663429) on Tuesday October 04, 2005 @03:26PM (#13716166)
      The recording companies will push as long and as hard as they can -- they'll pause when someone pushes back.

      That just might be Apple. With CD sales down again this year and Apple owning 82% of the online market along with a Christmas-slaying iPod nano and rumors of a slimmer fifth-generation hard-drive iPod coming later this month, Steve Jobs really has little to be afraid of from these guys. If they pull out of the iTunes Music Store, people will still be gobbling up iPods, and they'll just be filling them with pirated music instead. Jobs knows this, and so do the labels...they're just making a public fuss after realizing they're losing decades of control they once had over music distribution, all because they waited and waited and waited, and so Apple just strolled along and legitimized it without them.
    • My my, aren't you optmistic. And given a true ( or near enough ) free market, you'd be right. There are external pressures that the supplier must take into account, and that will help determine the eventual cost.

      However, the record industry is a monopoly, in everything but name. There is no motivation for them to come to reasonable terms, indeed, to even behave rationally. Oh, I'm not saying market pressure will *eventually* push them to whatever, but they have the 'stuff' other people want, and they h
      • " My my, aren't you optmistic."

        Optimistic? How, by thinking that the recording industry will push and push for as much as the market will bear?

        I think you misunderstood my post -- I'm not talking about pricing and profits based on supply and demand. Monopolies maximize profits by charging what the market will bear -- my OP implies that they are a monopoly.

        Only if the recording industry will not limit prices to the market max will they become irrelevant. If they are stupid enough not to halt price


    • good point, but this will mean re-negotiations across the board for everyone. Which potentially will be good for the customer. Initially everyone, producers, distributers, etc had their hand in the bag. Now with Microsoft, Apple and other none industry people pressuring the RIAA we may probably finally see a break in prices which haven't dropped since CD's initiall daybue(sp)
      • I think we're more likely to see stagnation in prices. The music industry will just wait a bit before attempting to raise the prices again... they'll try to stay in the warm spot of the cold pool (all negative associations intended); the market has shown it will bear current prices, so I don't see any kind of price decreases in our future.
    • The same goes for RIAA lawsuits. They'll keep sending out lawsuits until it becomes unprofitable to do so. It'll take an awful lot of soccer moms and disabled [theregister.co.uk] folks counter suing them to outweigh all those college student settlements. They clearly have no concern about public image and why should they?

      Nevertheless, I'm not sure I agree that the recording industry will reconsider. They can go elsewhere and they already have. Where else is Microsoft gonna go for content?
  • Include Kazaa/BitTorrent/eDonkey as part of the operating system?

    Embrace and extend baby, MS tried to play nice, but the RIAA wasn't having any of it.

    Now its gonna get UGLY!!
  • by ploss (860589) on Tuesday October 04, 2005 @03:12PM (#13715975)
    In other news, Microsoft puts out a new security update that enables a global Windows-based peer-to-peer filesharing network.

    Steve Ballmer was quoted, "F**K THAT RIAA! I'm GOING TO F**KING KILL YOU TOO!! KILL!!! KILL!! KILLL!!!!!!"

    Stock prices of major furniture companies went up as well on the news, on forecasts of the increased need for chairs.
  • Too Much?? (Score:5, Insightful)

    by JordanL (886154) <jordan...ledoux@@@gmail...com> on Tuesday October 04, 2005 @03:13PM (#13715984) Homepage
    It's pretty bad when a company that lost $8 billion breaking into the gaming industry says you're charging too much.
  • by vijayiyer (728590) on Tuesday October 04, 2005 @03:13PM (#13715987)
    The problem here is that MS needs to make a significant profit on the venture, as opposed to Apple, who has a music store to sell music players. Apple is content to give away the bulk of the proceeds from its store for market share so they can drive iTunes sales. What does MS stand to gain by giving away the bulk of its profits? More WMA licenses? Those can hardly bring in more than a few dollars per player.
    Of course, I wouldn't be surprised to see MS do everything at a total loss just for the sake of controlling the market.

  • Do they know how *hard* [www.rte.ie] these record labels are trying [bbc.co.uk] to make ends meet [audiorevolution.com]?

    _________

    Judge a Man by His Wallet [jfold.com]

  • by ericdano (113424) on Tuesday October 04, 2005 @03:16PM (#13716031) Homepage
    Why should the industry listen to Microsoft? They don't have a share of the portable player (ie: iPod) market. They basically want to push subscription services (which most people seem not to want).

    Basically, the industry needs to deal with Apple, not Microsoft. Microsoft is not a player in the game anymore. Microsoft is a a Johnny Come Lately [bartleby.com].

  • by flutkatastrophe (866004) on Tuesday October 04, 2005 @03:19PM (#13716077)
    This has to be the most ironic position either side could possibly be in.

    Microsoft - convicted monopolist, one of the richest companys in the world, complaining about being ripped of by
    The music industry - convicted price fixers, convicted conspirators, defacto ologopoly.
  • by DysenteryInTheRanks (902824) on Tuesday October 04, 2005 @03:19PM (#13716085) Homepage
    What's the difference between a record company and Microsoft? I'll tell you: One is a monopolistic leviathan, saddled with an outdated business model and unfairly, perhaps illegally, leveraging a chokehold on one market to try and take over another, desperately afraid of emerging free alternatives and assailed by customers for ridiculously high prices and shoddy quality. The other ... hmmmm, let's try this again. What's the difference between a record company and Microsoft? I'll tell you: One will be entirely bankrupt in 10 years, while the other will at least limp along selling a Flight Simulator. Payback's a beeyotch, INNNIT??!!
  • The labels are greedy bastards. How? What? When did this happen?

    Geez.

    As for how long they can go on like this, it took a hail of bullets to stop Bonnie and Clyde.
  • I can't wait until Microsoft unveils its music-download service for 'ermerging markets' -- you know ala 'windows xp starter' style. For only 1/10th of the regular price, they'll sell you 9/10ths of the song.... more than enough for those guys :) Won't the Music industry execs love this one!
  • by overshoot (39700) on Tuesday October 04, 2005 @03:25PM (#13716155)
    How much more can the music labels demand when even Microsoft won't go to market?

    They're starting to catch on. I suspect that they demanded a share of MSWindows revenue (same as iPod with Apple). Which, IMHO, was the only thing they could do.

    Remember, the RIAA is basically just a bunch of distributors. Apple and now Microsoft are taking that role away; with them holding the DRM key to the store the RIAA has little choice but to do business with (and through) them.

    Just like the artists have little choice but to do business with (and through) the RIAA. Indentured servitude. "Work for hire." In other words, the Man owns you, suckah, and unless you give good head you're not singing anywhere for the rest of your life.

    Karma is such a bitch -- especially on the "comes around" part.

    • "Remember, the RIAA is basically just a bunch of distributors. Apple and now Microsoft are taking that role away; with them holding the DRM key to the store the RIAA has little choice but to do business with (and through) them."

      Unless, of course, the RIAA massively supports Linux distros and development... shudder... scary thought.

  • and this means... (Score:4, Insightful)

    by sedyn (880034) on Tuesday October 04, 2005 @03:25PM (#13716158)
    somewhere steve jobs is smiling. You would think that due to recent developments that the music industry would love to emanate a "play by our rules or we'll go somewhere else" image.

    Well, that is unless microsoft took advantage of that situation and dictated terrible terms, with the message that like it or not, a new distributor is in town.

    That's the problem with admitting you are currently in a bad deal while negotiating for another. They come across, on some levels as appearing desperate.

    What would it do to iPod sales if microsoft became the leader in music distribution software? Considering the iPod is a cash cow for apple, and microsoft would have to support the iPod to enter the market, would the two of them have to play nice? (I recall reading a theory that apple was hoping to break even on the iTunes music store, if so, then what would the fallout for an MS/music industry from apple's perspective?)
  • Dvorak correct? (Score:4, Interesting)

    by BKuhl (2470) on Tuesday October 04, 2005 @03:31PM (#13716226)
    With developments like these I am begining to think that Dvorak may be on to something in his latest PCMag.com article.

    http://pcmag.com/article2/0,1895,1862166,00.asp [pcmag.com]

    It certainly seems that the record companies are deliberately trying to sink online music sales...

  • by Anita Coney (648748) on Tuesday October 04, 2005 @03:31PM (#13716227) Homepage
    There are three good reasons why the music industry wants third party online services to fail.

    First, imagine if a service such as iTunes became very successful. For example, 50% or more of all music sold was sold via iTunes. Now imagine you're a successful musician and it's time to resign to a label. Do you sign or do you get a marketer and simply sell your tunes on iTunes and keep the vast majority of the profits for yourself? If any third party online service succeeded, the current music industry would be toast.

    Second, the music industry has historically cooked the books, i.e., over reported sales of some artists to hype them or under-reported sales of successful artists to screw them out of royalties. With a third party keeping precise track of every song being sold the music industry loses control. Suddenly they can't "fix" the charts and artists are demanding their fair share. They don't want that.

    The third reason is that they want ALL profits for themselves. Why should Apple or Microsoft get some of the profits when the music industry can get it all? Let's face it, they are a monopoly. E.g., you can only legally buy a System of a Down CD from Sony, and no one else.

    This refusal to negotiation fair rates with third parties certainly shows that the music industry is doing pretty well. If they were as bad off as they claim they would more willing to open new markets and new models.
    • If any third party online service succeeded, the current music industry would be toast.

      I think this is the crux of the issue. The labels currently own the product and the means of distribution. Anyone who has taken macro economics 101 knows enough to see that losing control of the means of distribution is probably a larger threat to music labels than losing ownership of the product - which they sort of have, in their struggle to keep from copying and distributing on their own (which brings us back to th

  • The amounts the labels are asking is quite understandable I think.
    Selling music online is very 'hot' these days. Lots of self-respecting online mega-corporations are setting up online stores.
    Labels notice this (duh) and adapt their price to the market. They know Apple's a big rival of Microsoft, and that MS wants to have the market share Apple has in this piece of the market. And, not the least important, Microsoft has ability to pay the labels such amounts. If only to push Apple out of the market.
    Fortun
  • The real question (Score:5, Interesting)

    by Queer Boy (451309) * <dragon.76@mac.cCOFFEEom minus caffeine> on Tuesday October 04, 2005 @03:38PM (#13716295)
    The real question is when Apple or Microsoft will start/buy their own music label. Sounds easier to me than trying to negotiate with any cartel...
  • I didn't realize that monopolies could be so incestual. What we have here is a clear example of one trying to fuck another one.
  • by metoc (224422) on Tuesday October 04, 2005 @03:52PM (#13716432)
    If M$ operated it as a loss leader they would probably still pass on the royalties of $6-8 a month or $72-96 per year for what would certainly would be a service overencumbered with DRM. And probably like Yahoos service you can't listen to the songs if you subscription expires.

    Compare that with iTMS where it would be the equivalent of buying 72-96 songs per year, with a indefinite period of use, and the right to burn it to CD.

    As far as proprietary systems (iTunes or WMA) is concerned it is a tie. No advantage unless you're an iPod fan. iPod market share tells that story.

    Makes me wonder if M$ is going to reconsider embedding DRM technology in Vista or Windows Mobile.

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