Mr Jobs vowed to resist such pressure, after revealing that music firms were pushing for higher prices on Apple’s iTunes internet music store.
He said companies already made a bigger profit through iTunes than in CD sales.
Apple’s co-founder was speaking ahead of the Apple Expo showcase in Paris. Record companies did not comment.
Mr Jobs said that by cutting out manufacturing jobs, selling through iTunes was already proving lucrative for record companies.
“So if they want to raise the prices it just means they’re getting a little greedy,” he said.
Big music companies are currently trying to alter the terms of their deals with Apple, with many contracts in the US due for renewal.
Getting a “little greedy”? They invented Greed.
“We’re trying to compete with piracy, we’re trying to pull people away from piracy and say ‘you can buy these songs legally for a fair price’.
“But if the price goes up a lot, they’ll go back to piracy. Then everybody loses.”
Apple has sold about 22 million iPod digital music players and more than 500 million songs though its iTunes music store.
It accounts for 82% of all legally downloaded music in the US.
A spokeswoman for record company Warner Music declined to comment. Rival firms Sony BMG, EMI and Universal were all unavailable.
Jobs and Apple really don’t have a leg to stand on. First, iTunes exists purely at the discretion of the music industry. Without “hit” and popular songs iTunes would essentially be worthless. The music industry could pull out anytime it wanted and could destroy iTunes.
Second, the music industry does NOT want iTunes to succeed. Let’s assume that iTunes took 50% or greater of the total market of music sold. Why would an established artist re-sign to a label when he or she could simply hire a marketer and sell directly via iTunes and keep more of the money?! iTunes would BECOME the new music industry and the RIAA and its bosses would go the way of the buggy whip manufacturers.
Jobs and Apple is in a very lopsided relationship with the music industry, and I’m not sure if they know it.
Would Jobs cut off his nose despite his face and kill iTunes if a long term agreement can’t be reached? Or does iTunes just make too much money to be killed by Jobs himself?
James Hill
As Steve said, the record company is just so greedy and they will eventually pushing people back to downloading illegally again.
Ah, the marxist state of “Dvorak Uncensored” remains alive!
I’d bet everyone who reads this blog wants to maximize the money they earn (whether through salary, or selling their cars, homes). But when the record company wants to maximize what they earn, Jobs calls them greedy.
Funny thing, I have nothing against a reasonable discussion of whether the record companies are making a sound financial decision or not (let alone how the original artists are faring), but coming from Jobs and Apple, it is hilarious.
Here is a company that made decisions a long time ago to maximize profits at the expense of gaining market share (and other longer term issues), which made the Mac and its OS the tiny percentage that they are regarding all PC’s sold.
Lou
who invented greed, Apple or the record companies? Despite my rants on Apple in the past I’m with Mr. Jobs on this one.
These comments come from a guy who closed down store who sold his Product, so he could open his own stores, and sells a License for iPod Products.
Do the iPod socks need to be certified for the iPod?
Greed Knows Greed
Record companies greedy? You better believe it. They need the extra cash to grease their favorite politician to pass more DRM law, so they can make more money.
Of course, the real villian is Digital Rights Mangement.
What if most Mp3 players had a feature where they could read and write to other MP3 player’s memory, or thumb drives, through USB connection between the players. MP3 Users could easily trade files (the type converted from CDs without DRM) without the RIAA tracing their internet traffic. Igb would only take an instant on USB 2.0.
I can see this as a spontaneous, albeit clandestine, natural activity at the lunch table for the adolescent mindset. These are the exact target customers who are primarily feeding the greed of the record companies now.
Once transferred, users could strip DRM off files at home with free utilities available on the Internet.
Clearly it would effectively be an “untrapable Napster” at the personal level and would reduceCD demand. Perhaps 1/10th as many purchased titles would be required to fill all the iPods around. Less demand, lower CD prices. Almost Everybody wins – except the RIAA.
The MP3 player manufacturers could label the function for backup without the need for a PC.
Maybe I’m dense and this feature is our there – but all I can find is an outboard intelligent gadget that joins two USB memory devices together. It is too clumbsy for teenagers to carry around – the feature would need to be built into the players to really be useful. It should take no more cpu power than is in an MP3 player now and raise the cost of the players only slightly to have a little bit more code and another USB connector on them.
If it avoided just one unneccessary CD purchase, it would be worth an additional $15 to the buyer. Likely it would avoid many more redundant CD purchases in the lifetime of the player. I’d buy it.
Are the MP3 Designers reading this?
I’m somewhat shocked to hear that it happened so soon, but I am not at all surprised that it is happening.
The executives of the big record companies are constantly crying about how poor they have become. They throw around “estimates” of what piracy has cost them but rarely discuss how they arrive at those numbers. If pressed, they claim to have a handle on the number of illegally copied CDs but, again, don’t offer any explanation of where that number comes from. Even if we assume that the number they offer for stolen CDs is correct, why assume that every pirated CD would have resulted in a sale if it had not been copied?
Theft is the excuse that these fat cats use for what otherwise would be laid at the door of their own greed and incompetence. I wonder what kind of salaries, bonuses and expense accounts these record company executives run up at the expense of taxpayers, shareholders, artists and the music buying public?
Adding insult to injury, with all their bluster about “competition”, “free enterprise” and “no Government interference”, the highly paid functionaries of these gigantic corporations are the first ones to run to Congress to buy legislation that would stifle anything that has the remotest possibility of standing in the way of their gravy train.
Yukkk.
The first comment got it very right, and very wrong. iTunes is already in a position that it could sign up artists and still make money. iTunes does not have every artist in their collection of downloadable music, and if some of the record companies decide not to renew with Apple, then iTunes will continue to sell what it does have access to.
How long will it take for bands to gravitate towards the iTunes-friendly music companies? How many new independent artists are there out there that would jump at the chance to sign up with iTunes directly?
I don’t know if the record companies have a future, but they had better stay friendly with iTunes (or internet distribution in general), otherwise they definitely don’t.
This is in response to Ima Fish:
Actually, Apple does have a leg to stand on, many legs, something like 8 million pairs of legs have iPods. I think this puts the ball in Apple’s court: they got the users, and those users buy from iTMS. I doubt the record labels want to alienate that number of listeners.
However, Dvorak once pointed out on TWiT that this is more about a music distribution channel that the record industry does not control. I agree. I bet the CEOs of those major labels are sickened every time they realize that they cannot dictate which artists appear on the iTMS home page. “For gosh sake,” they think, “there is an independent artist right next to our artist! We need to fix that!”
Over half a billion downloads mean something. The labels originally put their music on iTunes thinking “it won’t be big, but maybe we can make a few bucks.” Now it takes off and they want to change the deal. Well, they opened Pandora’s box… they got to live with it.
Job’s always looks like he needs a shave.
Now he looks like a geeeeedy old man.
A friend was cleaning out his office drawers when he found a July 26, 2004, issue of Newsweek that did a cover story on the iPod and featured Steve Jobs on the cover. Being an iPod fanatic, I read the old article, and here is a quote I came across:
“The iPod and iTunes store are a shining light at a very bleak time in the industry.”
Who was it that said that? Cary Sherman, president of the Recording Industry Association of America.
Funny how things change…