Friday, June 06, 2003

Indie records meet Reality Distortion Field...

Actually, it sounds like Steve Jobs is trying to give the Independent record labels a fair deal in the iTunes Music Store.

The summit at 1 Infinite Loop was yesterday, and CDBaby! has posted some very interesting notes as to what was said and done at the meeting. It should be noted that CDBaby! states Apple as having 41 billion dollars in the bank. Apple has 4.1 billion dollars in the bank.

The notes are very comprehensive and worth a look, but here are a few of the more interesting points:

- Apple's giving the Indie labels the same deal it gave the five major labels.
- It's a non-negotiable deal. "It's take it or leave it."
- The five major labels have apparently offered Apple money to give more attention to specific artists (particularly over the banner on the iTMS homepage), but Apple refuses to accept money like that.
- Labels are paid wholesale, once a month, for the songs downloaded.
- Apple still won't reveal its profit margin per-song, which has rumored to be as much as 35 cents.
- Independent artists, who aren't represented by any label, still can't get into the iTMS. Apple wants them to go through iTMS "Partners."
- Rights, for iTunes only, are over a three-year term.
- Albums are recommended to be priced at $9.99 and lower.
- Albums must be priced at the exact value, or less, of the 99 cent tracks combined.
- The iTMS sees about 500,000 songs downloaded per week right now.
- Between three and 5 million songs have been downloaded (that does seem unusually vague, though).
- There are 10 of the 30-second previews listened to for every one song downloaded.
- 90 percent of iTMS purchases are done through the instant download system.

Apparently Apple was vague on contract specifics, with interested labels having to request contract info. CDBaby! claims to have done so.

Of course, this post isn't speculation-free. There's one particularly interesting point near the end of the notes.

"Macs in 57 Apple retail stores are pre-loaded with playlists called, 'Discover Indie Music'. A chance at in-store play."
You might remember rumors that surfaced after the iTMS launch that Apple would sell iTMS songs through stations at Apple Retail Stores in the future. This would seem to at least somewhat support that, although it's still highly speculative.

While competition is popping up, Apple's got a good head start with the iTMS. By the time PC users (yes, I feel sorry for them, too) start using the iTMS (well, that'll be some good in their computing experience), Apple should have hundred-thousands upon hundred-thousands of songs to download.

That sounds pretty groovy, doesn't it?


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