Steve Jobs bullied Sony on Christmas Eve

When Apple announced at Mac World the new pricing tiers for iTunes and that all songs would be DRM free the users rejoiced. What was not so present was how Apple managed to get all this done with record labels, as it turns out, Apple was playing hard ball.

While at first this may seem like Steve is fighting for the consumer; from the outside it clearly does, he got songs the way consumers want them, DRM free. All is good right? Unfortunately the picture isn't quite as peachy.

The problem here is that labels that were once dominant are now afraid of "Apple removing a label's products from the iTunes store over a disagreement." iTunes is the largest online music store by sales and active users and to not have your product on the virtual shelves of iTunes store is disastrous.

Apple has grown to be the defacto online music store. With Apple getting all of its demands for online music distribution it seems as if they are fighting for the consumer but the consumer is losing the option of picking their place to purchase music.

Apples dominance "resulted in a particularly tense conversation on Christmas Eve between Steven P. Jobs, the chairman and chief executive of Apple, and Rolf Schmidt-Holtz, the chairman of Sony Music." Sony eventually gave in to Jobs demands but only reluctantly because of fear of having their products pulled from iTunes.

At the end of the day Apple is building its iTunes store to be the only shop on the street that sells digital music. There have been many attempts to give consumers a solid choice in digital music purchasing but because of Apple's bullying, we the consumers one day may be out of choices.

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59 Comments

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Orlando Rays said,
Are we supposed to feel sorry for Sony? Isn't this the company that snuck rootkits on its CDs?

Exactly. Sony really needs to have their collective ass kicked for the crap they pull off all the time.

i still dont understand why the EU hasnt made apple open their store to other mp3 players.....
seems they are anti micrsoft i guess

LTD said,
No, they're anti-companies-that-abuse-their-monopoly.


So, pushing people to use iTunes with their iPod, which drives their own music sales, is not abusing their monopoly?

It's not like they are going "here, here is your iPod, but don't worry, feel free to buy your music from anywhere!"

Antaris said,
So, pushing people to use iTunes with their iPod, which drives their own music sales, is not abusing their monopoly?

It's not like they are going "here, here is your iPod, but don't worry, feel free to buy your music from anywhere!"

+1

This is the same way Wal-Mart operates. Apple seems to be following in the successful footsteps of post-Sam era Wal-Mart scum.

I don't see how because iTunes "has grown to be the defacto online music store" this has resulted in the consumer losing "the option of picking their place to purchase music." Just because iTunes is the most popular online music store, this does not mean that you cannot shop for music elsewhere online. That is like saying that Walmart is so large and powerful that consumers can therefore no longer shop at mom-and-pop grocery stores.

Apple struck a deal with the record companies to sell their songs without DRM because it was something that iTunes customers wanted and therefore it was profitable for them to provide such a service. They did not do it so that they could undermine consumer choice.

The reason is because "buying" to the MODERN American music consumer is ONLINE. Most modern music buyers (at least the ones the RIAA music studios care about) don't buy CDs...and haven't for YEARS.

WTF? Why is Neowin always trying to put a negative spin on Apple-related posts? This is good news, not bad news. Stop trying to make it sound like DRM-free music is the end of the world because Apple finally got what all the other online stores have had for ages.

You know what? Screw this. Bye, Neowin!

bdfortin said,
WTF? Why is Neowin always trying to put a negative spin on Apple-related posts? This is good news, not bad news. Stop trying to make it sound like DRM-free music is the end of the world because Apple finally got what all the other online stores have had for ages.

You know what? Screw this. Bye, Neowin!


Don't let the CAT-5 hit you on the way out.

RAID 0 said,

Don't let the CAT-5 hit you on the way out.

OH!!!! NO!!!! ANOTHER APPLE/MAC/IPOD/OSX FANBOY BITES THE DUST. IS THIS THE SIGN OF THE APOCALYPSE

It's interesting that now Apple is getting the upper hand. 10 years back, Apple had no presence in the music industry, but now it is the #1 music retailer in the US. Record labels now are getting what they deserve, they were the ones that used to bully artists and get most of the profits. Now, as online distribution grows bigger, probably record label will disappear, since Apple or any other online retailer could publish the music from the artist directly, without the need of any record label. Hopefully that happens sometime soon, and making the labels disappear could also make music a lot cheaper. I am glad that now most of the store is DRM free, now I have started buying music from it. 256 kbps + DRM free is a much better option than the ****ty protected 128 kbps they used to offer.

I'm not entirely sure why Jobs fought for this change. Do users want DRM free songs? Sure.

But the details behind how this was done and a fee to remove DRM from previously downloaded songs could end up hurting Apple in the long run.

From my experience working at a Best Buy and constantly answering questions about MP3 Players or even probing a bit, I've noticed that quite a few (a lot more than I would personally expect) people who have owned iPods in the past and have used the iTunes store/software don't particularly like the player. These customers would rather buy a Sansa or Zune but feel they HAVE to buy an iPod becuase of the DRM restrictions of the songs.

Those people may just pay to have their library stripped of DRM and go buy that Zune they have always wanted.

Labels have always pushed people around and demanded more than they deserve, especially with the digital era where their costs are practical nothing. Apple worked hard to make the iTunes Store the best there is and it deserves it. Besides the labels were trying to stick it to Apple for years, especially offering DRM free music to their closest competitor Amazon MP3. They specifically held out on Apple to try and show them "whose boss" well turns out, not them.

Also I don't really think the consumer loses, iTunes isn't exactly overpriced (considering what we used to be paying) and better inventory means we all win. I buy most of my music from iTunes and that's not going to change. Only reason I'd consider Amazon is because they have albums Apple doesn't.

Are we supposed to cry or am I missing something?

Sony has DRM-free songs available elsewhere, so does it really deserve sympathy? I think not.

There are plenty of other online and brick-and-mortar stores out there, so I don't quite see how the consumers could be losing places to purchases their music.

Furthermore, if it hasn't been for Apple and its music store, only God knows how bad the music industry would be. And if I remember well, statistics showed that the only growth the the music industry had was because of online music sales. And thanks to the iTunes Store.

Labels whine about Apple having the upper hand, but geez look at what they did a few years back. They were not ready for online distribution. They were actually fighting it. They were spending their money suing P2P users. And God knows what else. Meanwhile, Apple saw the opportunity, grabbed it, and made everything play in its favour. Apple offered a great alternative, and people were there and took advantage of it.

I'm not saying that Apple is some kind of saviour, but let's face it, they did a great job at it. So what if labels CEO get lectured and bullied by Steve Jobs. They woke up too late, and Apple is just simply too far ahead. So whether they like it or not, they better deal with it.

The RIAA responds with the deep throaty plaintive growl of a great woolly mammoth sinking in the tarpits of online distribution...wondering how they came to this unfortunate end.

I don't see the problem. If companies like Sony want to get away from Apple and their market dominance then they will have to start making moves now to partner with other stores and hope the market balances itself out a bit more over time.

Not only will this possibly see record companies being more keen to support more stores in order to cover themselves but it also then sets a precedence to which other online retailers can bargain prices and drm or lack of. other stores stand to benefit from Apples "bullying".

"With Apple getting all of its demands for online music distribution it seems as if they are fighting for the consumer but the consumer is losing the option of picking their place to purchase music."

There are enough other places where I can get my music just fine. Let's not forget that there are actual streets out there which house physical stores you can really walk into. In many cases I can find CDs there that are priced cheaper than their digital counterparts in the iTunes Store. Next to that there are plenty other online music stores to choose from.

Riiiiiiiiiiiiiight. I guess you haven't tried to find a CD that's not in the top 40 recently at one of these stores? The selection is utter crap at brick and mortar stores, which is why they are going out of business.

I do not believe the extent of that line from the article, either. My experience with the Zune Marketplace is they generally have what I am looking for. I can think of a few labels that aren't on board w/ Zune yet, however.

In the end DRM free unlocks the user from the iTunes Music store. If iTunes has a better price than Amazon, I can get the tracks from them. Next week may be different, and I buy something from Amazon or Zune. It doesn't matter if I have an iPod or Zune or whatever. This is a good thing for consumers all around.

^^ Then the RIAA studios are telling you that you should go with the free, unrestricted, un-DRMd, use any way you want solution - piracy. They won't make their product available to you, the CONSUMER, so be it. Their decision = their loss.

Its just the way business is done these days in the music industry. More power to Apple to have the stones to head to head with Sony.

explain to me how apple is cornering cosumers into the iTunes store? there are numerous stores out there now ... most of which sony has been selling DRM free music already ... Sony does not deserve ANY sympanthy ... in fact no major record label deserves any sympathy, they deserve everything they get.

Big deal if Apple starts ripping the customers off people will just go to pirating music. For now iTunes seems to be the best choice.

I found a better choice: Spotify, even if the records companies have started to mess that outstanding digital form of music distribution up too.
Still, I recommend to check it out

Grandaevus said,
I found a better choice: Spotify, even if the records companies have started to mess that outstanding digital form of music distribution up too.
Still, I recommend to check it out :)

Unfortunately I can't, Spotify is American only at this time

What countries is Spotify available in?
We̢۪ve released our free advertising supported version in Sweden, Norway, Finland, the UK, France and Spain. In most other countries Spotify Premium is available for purchase.

:)

Ok, not a giant fan of Apple, but I can't say I feel particularly bad for the record labels...

Also, you can get DRM free music elsewhere too anyways (Zune Marketplace for sure, and doesn't Amazon do DRM free?), so I think it's more of a win situation if Apple bullies them into that situation because even though it may be the largest seller, others aren't really going anywhere and they reap the benefits of it too.

-Spenser

i prefer the 'scene' releases myself (NO DRM/NO BS! , just quality music ).... best quality MP3's (i.e. EAC + LAME = VBR 128-320kbps (avg bit rate is around 192) and the cost, well.... lets just say NO ONE would complain lol

ThaCrip said,
i prefer the 'scene' releases myself (NO DRM/NO BS! , just quality music ).... best quality MP3's (i.e. EAC + LAME = VBR 128-320kbps (avg bit rate is around 192) and the cost, well.... lets just say NO ONE would complain lol

Except for the fact they're not LEGAL. Why do people insist on banging the same old drum that they prefer downloaded DivX's to online streaming services, or Torrented MP3 downloads compared to something from iTunes? It's a moot point as it's illegal so it's not a comparable option.

It's like me saying that I prefer to steal my cars rather than buy them.. much cheaper that way. Or I prefer to go and steal my shopping rather than pay for it.

BTW - I have downloaded music in the past so I'm not criticising anyone here for doing it.. I'm just pointing out that it's wrong to even try and justify it now that DRM free music is out there to buy legitimately.

People insist on using the torrents because the torrents rock. You can get literally anything you want from them, and it doesn't cost you anything. So it's illegal. So what? An I supposed to support the big record corporations with my hard-earned money just because the nazi ******* at the RIAA say so? Get real.

Chicane-UK said,
...

It's like me saying that I prefer to steal my cars rather than buy them.. much cheaper that way. Or I prefer to go and steal my shopping rather than pay for it.

...

Well, I'm not for piracy but people really need to get over this misconception. Piracy is not like stealing a car. If you could create a copy of a nice ferrari you see on the street, for free, wouldn't you?

Kam1kaz3 said,
Well, I'm not for piracy but people really need to get over this misconception. Piracy is not like stealing a car. If you could create a copy of a nice ferrari you see on the street, for free, wouldn't you?

And yet the company you failed to pay collapsed because everybody else copied the same ferrari.

Eis said,
And yet the company you failed to pay collapsed because everybody else copied the same ferrari.

Make it actually affordable and not over priced, offer something they can't get from the "copy" and you will have your sales. Poor business fail not always due to the product, but due to the business moto and how they treat their customers. Of course, doesn't help if your product sucks as well....

Eis said,
And yet the company you failed to pay collapsed because everybody else copied the same ferrari.

True. That was just an example that shows that piracy is not stealing.
Usually people who pirate a game/song wouldn't buy it anyway, but they are a good source of publicity nonetheless, so it's not that bad for the companies, there are benefits as well.

Also, as stated before, products are well overpriced. A relatively poor person wouldn't ever be able to buy MS Office for instance, and so wouldn't be able to accomplish some school tasks (not every country has free student versions, I know I hadn't.) So, should a poor person be musicaly "ignorant" just because they don't have the money to buy some? What do companies lose if this person copies songs from their friends? nothing, but they win another person who will talk about their product...

Some people argue that if you have enough money to have an mp3 player, you have enough money to buy music, that's just wrong. You could get an mp3 player as a gift from someone else for instance...

Again, I'm not for piracy, I know it's wrong, and you shouldn't play the game if you don't want to be constrained by it's rules, but it's not as bad as some people claim it to be...

shakey said,
Make it actually affordable and not over priced, offer something they can't get from the "copy" and you will have your sales. Poor business fail not always due to the product, but due to the business moto and how they treat their customers. Of course, doesn't help if your product sucks as well....

I think .99 cents IS affordable. This argument just doesn't hold water. If I can't afford something I don't buy it (I don't steel it either). I'm not going to steel something because "the man" owes it to me... It's not the companies fault that I can't afford their song when they're priced reasonably. It would be one thing if they were outrageously priced, but they are not...

M_Lyons10 said,
I think .99 cents IS affordable. This argument just doesn't hold water. If I can't afford something I don't buy it (I don't steel it either). I'm not going to steel something because "the man" owes it to me... It's not the companies fault that I can't afford their song when they're priced reasonably. It would be one thing if they were outrageously priced, but they are not...

.99cents.... 85% of the people on earth dont have food for the next supper... and mostly people from third world and even (maybe i dont know) 2nd or 1st can afford the .99cents.... here you can buy food of one time for 10 people in .99US.cents.... say they price it @ .1 cents a piece and all the people in the world will BUY IT = same proft as they were getting with .99Cent = no PIRACY

Asking me to give up MSOffice (which I was pirating once) at the start of my life would have been a death sentence for me 99% of the population's in third world ONLY know MS and its products MS Office , MS Windows... we are thought around it.... what do you expect people to do then??? dont have fun? dont work and progress ??? (look at me I coudnt afford Windows nor office, i pirated , couse I had to, why? coz I didnt knew if ANYTHING else even exisited ! and now when I have MADE the money to support and have extra dime to spare I got the Legit Office and Windows.... So what i think is Poor doing piracy = a bulidup of faith based userbase = future buyers

Ravemaster said,
Steve Jobs.
The Modern Scrooge.

Years ago some guy said that Steve Jobs looks nice but is evil and Bill Gates looks evil but is a nice guy.