Gigs & Bytes: The 99-Cent Solution
It’s no secret that the major labels have been unhappy with the standard 99 cents per song Apple charges on its iTunes Music Store. Some labels want more, while others have expressed opinions that Apple should charge more for newer or more popular tunes and less for older songs or tracks that aren’t quite as popular.
And it’s no secret that Steve Jobs, the man who was once hailed as the savior of the record biz for introducing legal downloading to the masses, hasn’t exactly endeared himself to the labels. Last fall, he described the labels’ attempts to negotiate higher prices for those downloads as “getting a little greedy.”
Well, guess what? Jobs won.
Apple recently announced that it had extended its contracts with record labels and the 99 cent price would remain for the foreseeable future.
When Apple launched iTunes in 2003, the computer company also introduced a flat 99 cents charge per track, which quickly became the standard as more online music stores hung out their own virtual shingles. And even though the labels aren’t commenting on their renewed agreements with Apple, there are rumblings that the current agreements are for a shorter length of time than the ones the labels signed two years ago. Jobs may have won the battle, but the war is far from over.
On the other hand, iTunes commands about 80 percent of all legal music downloads, and there’s apprehension among the labels that if they cut their ties with Apple, or any other legit business charging 99 cents per track, music fans might revert to file-sharing networks where nobody gets paid.
“Apple has all the cards, and when you have all the cards, you can play hardball,” said Ted Schadler, analyst at market research firm Forrester Research.