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Vivendi CEO calls iTunes pricing indecent

26 September 2007 5:49 by Rich "vurbal" Fiscus | 4 comments

Jean-Bernard Levy, chairman of Universal Music Group parent company Vivendi commented on UMG's very public feud with Apple over iTunes pricing, saying "The split between Apple and (music) producers is indecent," adding "We should have a differentiated price system."

Since July, UMG, the world's largest record label has held out on renewing a new long term deal for iTunes distribution, preferring to sign a new contract every month instead. Over the same period of time, UMG has been experimenting with ways to promote non-iTunes services, including providing DRM free downloads only through iTunes competitors.

Levy described the situation as a work in progress, saying "We are in a phase during which many different actors are talking to each other ... We are trying to put in place several projects to ensure that music is better remunerated ... We are not just talking to Apple."

Of course, what he really means is that UMG is working with other companies in an effort to either force Apple to offer a more lucrative contract or cut them out of the distribution chain altogether. So far no one has had any luck competing with iTunes, although detractors in the music industry often contend that's a result of a competitive advantage created by owning both the download and playback market through sales of iPods.

The reality is that the iTunes formula of consistently priced downloads that don't make much money individually coupled with profits from hardware sales was a major reason for Apple's success, not just because it was easy for consumers, but also because the music download market was nearly non-existent before iTunes.

The question is at what point it makes sense for Apple to give music suppliers more consideration to avoid losing business to their competition. While no one has come up with the formula for an iTunes killer yet, if one of the other services attains that status Apple may have to show a lot more benefit to record labels if they want to keep the downloads flowing.

Source: Fox News

Permalink to this article | Topic: Online music services

Apple drops price of DRM-free tracks on iTunes Plus (16 October 2007)

Total Music aims to dethrone iTunes (12 October 2007)

Radiohead denies iTunes of their new album (1 October 2007)

Amazon opens its DRM-free music store (25 September 2007)

Virgin Digital ends its service (24 September 2007)

Apple is first to face European Commision after Microsoft defeat (19 September 2007)

Universal considering music subscription model (15 September 2007)

Universal snubs iTunes for DRM free downloads (11 August 2007)

Universal seeks month-by-month iTunes licensing deal (2 July 2007)

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PeaInAPod (AfterDawn Addict) 26 September 2007 13:24
The higher they drives prices the less people are going to buy there music. If they want to stop piracy but can't get the average kid to pay 99 cents for a song do they really expect the kid to pay $1.50 for a song? I'd bet money that everytime when given the chance the kid will just download the song of a P2P network. The record companies need to realize that yes iTunes is successful due to the iPod + iTunes relationship. But it also appeals to its users with a $1 price on each song, no matter its popularity. [ + quote]
cousinkix (Newbie) 27 September 2007 15:12
Down with these sickos. Vivendi has done crazy things like printing up T-shirts demanding FREEDOM for mass murderers. I won't buy their crap at any price now... [ + quote]
sheri1983 (Junior Member) 28 September 2007 19:02
Well, Vivendi, I'd like to see the price of downloaded songs be around 25 cents. At this price, it's simpler to just pay the money than spend time on P2P looking for what may turn out to be a crappy, corrupted, or virus-laden MP3. The cheaper they make it, the fewer people will bother to steal it. I'm guessing that the majority of people aren't actually purchasing their music. If they can use lower prices to convert these people into legitimate consumers, they'll be better off. Would the record industry try THAT? Don't count on it! They'd rather RAISE prices and convert more honest consumers into thieves... "The beatings will continue until morale improves" mentality. [ + quote]
borhan9 (AfterDawn Addict) 28 September 2007 22:34
Looks like itunes is going to have a few competitors up close and personal. [ + quote]