music_news 91 posts

Yesterday Steve Jobs, Apple’s chief executive posted an open letter on the company’s site in which he defended Apple and put all the blame for the inefficient DRM system on labels.

Jobs denies that Apple tries to lock customers who bought iPods into using the iTunes store and hasn’t been using its DRM system for that purpose. He argues that on average there’s 22 songs purchased from the iTunes for each iPod ever sold. However, average iPod now holds around 1000 songs. Thus users are not being locked into the iTunes store as 97% of their music comes from elsewhere.

Moreover, Apple sees abolishing DRM as a way forward as neither the current situation with many proprietary music stores nor opening its FairPlay standard will work. “Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players.... read more

A recent report by Forrester Research titled Few iPod Owners Are Big iTunes Buyers  reveals some pessimistic findings about the iTunes service.

2,700 US iTunes debit and credit card transactions had been analyzed over a 27-month period and it turned out that only 3% of online households in US bought music from iTunes in 2006. In the past year an average user spent $35 in the iTunes store. Half of credit card transactions were less than $3.

An average iPod user has bought 20 songs since the launch of iTunes.

The report also claims that since January the monthly revenue of the store has fallen by 65%.

Apple shares fell 3% after the report. Shortly after another paper  was released by Piper Jaffray this time confirming “strong... read more

Labels try new ways to get the money they believe are getting lost due to piracy and carelessness of consumers. New idea is that it might be easier to tax consumers when they buy an MP3 player rather then hope they will stay away from peering.

News leaked out this week that Universal Music Group tries to negotiate a royalty fee for every iPod sold.

Universal has already succeeded in doing so for Zune players produced by Microsoft. Assumingly the label will receive $1 for every $250 of Zune sales.

Consumers will pay even if they will never listen to Universal’s music on their players. Actually many developed countries do have some kind of copyright levy or a tax on blank media such as CDs or memory devices like MP3 players. Consumers have to pay it even if they are going to use a blank CD to record their own song or home video.


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