It’s no secret Doug Morris isn’t an iTunes fan.
To say the Universal Music CEO is disenchanted with the online music store would be an understatement. Morris recently refused to renew his label’s multi-year deal with iTunes, instead opting to license Universal recordings on a month-to-month basis.
For Morris, iTunes represents a rather bleak digital future major record labels. A future where tech companies like Apple call the shots and recording companies like Universal just bend over and grab their corporate ankles.
Morris is reportedly unhappy with the control Apple has exerted over music prices on iTunes, where tracks are priced at 99 cents and CDs at $9.99. Instead, Morris advocates a more flexible pricing structure – one set by the labels that release the music and not by the high-tech company making the deliveries.
And Morris has had some success. When Microsoft wanted to include a form of wireless song-sharing for its Zune personal player, Morris negotiated a licensing fee from Microsoft that resulted in the tech company paying the music company one dollar for every Zune sold.
And now it looks as if Morris is planning to take on Steve Jobs and iTunes by launching a label-owned online music store, called Total Music.
According to Business Week, Sony BMG has already signed on for Total Music and Warner Music Group is listening to what Morris has to say. Some of Total Music’s goals are similar to those expressed by Morris, such as regaining control over sales from iTunes and promoting non-iPod players in the marketplace.
To wean consumers off of the iPod, Morris is proposing that hardware and cell phone manufacturers absorb a $5 per month charge. In exchange, consumers purchasing their portable devices would get all the music they can want for free. The idea is that an all-you-can-eat deal would boost sales of players not made by Apple as well as provide a healthy revenue stream for the labels.
But Total Music wouldn’t be the first online music store launched by one or more major labels. Back in 2002 Universal and Sony launched PressPlay, the first online music store that sold major label tracks.
But PressPlay wasn’t a hit. At first, PressPlay tracks were chained to the computers people used for downloading, preventing the songs from being transferred to portable devices. Other restrictions limited how many times customers could burn tracks by the same artists. Despite the labels’ best intentions, music fans couldn’t see any advantage in PressPlay’s legal downloads.
Eventually, PressPlay drifted off into Web history. In 2003 Roxio acquired PressPlay and adapted the underlying technology to launch the legal incarnation of Napster.
Of course, the marketplace will determine whether a label-backed online store will thrive. Record chiefs like Morris believe record companies know more about selling music than technology companies like RealNetworks and Apple. When you add the Total Music rumors to Universal’s recent endeavors, such as the label’s MP3 experiment of selling unprotected tracks, it’s clear Universal and Doug Morris want to lead, not follow.
RIAA Vs UseNet.com
There use to be a fake news story floating around the Web a few years ago claiming the Recording Industry Association of America was suing Usenet for copyright infringement.
The joke was that Usenet is a decentralized messaging system. Nobody actually owns it.
In most cases Usenet system needs are handled by individual Internet service providers. Providers determine which news groups they’ll carry, how much content they’ll include from those groups, and how long that content stays on their own servers before being deleted to make room for fresher postings.
But Usenet is more than just text postings. The alt.binary class of news groups consists of non-text postings, mostly songs, movies, TV shows and software. And most of those postings infringe on someone’s copyright.
And guess what? The RIAA recently filed a lawsuit against Usenet.com.
Okay, Usenet.com isn’t Usenet. It’s simply a Usenet provider. But, like many commercial Usenet providers, Usenet.com maintains a vast Usenet archive and charges a subscription fee to those wanting to access that archive.
The RIAA’s lawsuit claims Usenet newsgroups contain "millions of copyrighted sound recordings." They’re probably right, though no one has actually counted them all.
And Usenet.com isn’t exactly unaware of what is available. The RIAA lawsuit quotes Usenet.com’s own words, that "Today’s hottest way of sharing MP3 files over the Internet is Usenet."
Suing a provider like Usenet.com is either a fool’s errand or a brilliant legal move. Sure, the organization might be able to stop Usenet.com from providing customers access to all the copyrighted material available on Usenet, but Usenet.com is only one Usenet provider. AT&T, Comcast and many colleges and universities also provide Usenet access to their customers.
On the other hand, if victorious the RIAA’s legal action against Usenet.com could bully other Usenet providers into dropping Usenet newsgroups containing copyrighted material. And that would definitely be chalked up as a win in the organization’s play book.
Sony BMG & MySpace
MySpace has cut a licensing deal with Sony BMG allowing users of the social Web site to post music and videos by the label’s artists.
Both parties plan to split any revenue generated from the alliance, which will come from advertising appearing within videos and other ads placed on Sony BMG artist pages.
Like YouTube, MySpace, which is owned by Rupert Murdoch’s Fox Interactive Media, has had its own copyright problems. Users like to upload clips of their favorite songs, movies and TV shows. And, like YouTube, it’s almost impossible for the site’s operators to prevent infringing uploads from appearing.
But MySpace wants to play ball with content owners, figuring it’s better that both sides make some money rather than spend a lot of money trying to prevent the inevitable.
"MySpace has always been a promotional vehicle for labels and artists," said company VP of business development Amit Kapur. "We see an opportunity to evolve the platform to involve richer content experience."
Apple Lowers Price For Unprotected Downloads.
Apple’s iTunes Music Store lowered its price for unprotected tracks from $1.29 per song to 99 cents, thus keeping the DRM-less track pricing in line with the majority of its inventory.
Apple launched iTunes Plus last spring when it completed a deal with EMI allowing the online music store to sell the label’s tracks without copy protection. As an added consumer incentive, Apple encoded the unprotected tracks at a higher bit rate than the copy-protected tracks it sells.
But other online music stores have managed to offer unprotected tracks without pricing those tracks more than 99 cents. Amazon.com recently launched its own online music store – Amazon MP3 – featuring unprotected tracks for 99 cents each.
Apple might have more on its mind than just competing with other online stores. The company has faced criticism, even possible legal action in some countries, over its proprietary DRM technology that prevents iTunes tracks from playing on players other than iPods.
Of course, Apple’s spin makes it sound like the company is doing everyone a favor.
"iTunes Plus has been incredibly popular with our customers and now we’re making it available at an even more affordable price," iTunes VP Eddy Cue said. "We’re adding over two million tracks from key independent labels in addition to EMI’s digital catalog and look forward to even more labels and artists making their music available on iTunes Plus."