Over at the Guardian, music retailer eMusic has weighed in on those rumors about Apple bundling iPods with free iTunes access. It would be "anti-competitive behavio(u)r by a monopolist," the Guardian quotes David Pakman, eMusic's CEO.
The plan, which not a lot of people seem to believe is entirely real, would be to sell iPods and iPhones with a set "free music" premium charge that would allow unrestricted access to music over the lifetime of the device. The likely cost would be about $100/device, working out to about $5/month over 18 months. This plan would make music labels "dangerously dependent" (again, according to the Guardian article) on Apple.
I'm not sure I follow Pakman's reasoning. The Universal Total Music idea has been around for a while and was originally proposed for non-Apple platforms. If Total Music does pan out for the iPod/iPhone, it seems that it would be Universal Music (or a reasonable music industry facsimile) being anticompetitive not Apple.
Thanks, Sebastian Clarke.
Reader Comments (Page 1 of 1)
3-24-2008 @ 11:10AM
Max said...
He has an unfortunate name. Do you think people go Wakka Wakka Wakka whenever they see him?
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3-24-2008 @ 11:39AM
David said...
Why is there the need to bastardise the spelling with rounded brackets?
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3-24-2008 @ 11:56AM
David said...
How would it be monopolistic by Apple, or make the record labels "dangerously dependent"?
Can you not buy DAP's from:
Archos
Cowan
Creative
iRiver
Meizu
Microsoft
MobiBLU
Insignia
Philips
SanDisk
Samsung
Sony
No Name Chinese imports, plus many others
None of the devices from these manufacturers utilize Apple's iTunes, neither do all the mobile phones, besides the iPhone, that can play music.
Just more sour grapes from those with an inferior business plan and/or abilities.
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3-24-2008 @ 12:12PM
Zak said...
Because apparently it's trendy to call Apple monopolistic these days. People seem to think that Apple has a "monopoly" because they have significant market share on the music/DAP side of things, despite the fact that you can actually buy music and players from sources other than Apple.
3-24-2008 @ 12:32PM
Andrew Wise said...
David,
You're misunderstanding the point... Apple has a majority share of the market in iPods and on iTunes.
And Apple is reducing their margins completely on iTunes in order to drive sales of more iTunes, hence using a dominance in one industry to drive out competitors and drive sales in another industry.
I'm not defending crappy DAPs, and wish they could come up with a quality offering of their own, but until this comes-with iTunes service is offered to all DAPs, this won't happen.
3-24-2008 @ 1:41PM
shippster said...
I thought that the problem Universal had with Apple is that they were charging too much per song download. It sounds like the deals they make with other companies may be offering lower profits to the distributing companies. Does that really fit with your claim that they are reducing their margins completely?
3-24-2008 @ 5:18PM
San said...
Well, that would make the fine Microsoft recently got for being a monopolist unfounded (but we all agreed with the EU, obviously).
You can download other media players, right?
Does that make Microsoft less of a monopolist? No...
3-24-2008 @ 12:29PM
Dale said...
He needs to have more faith in his company's offering, and up the ante before this comes to fruition.
I'm an eMusic customer. I'm very happy right now, but if a better all-you-can-eat package came along, all it would take to keep me is signing up more major label artists and increasing the value of the package.
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3-24-2008 @ 12:30PM
Jason said...
Being "monopolistic" generally has to do with a company having significant market power (which Apple actually does), and then using that power to stifle competition, thus ensuring a monopoly on that particular market.
If Apple was abusing its market power, it would be "asking" Wal-Mart and Best Buy to only stock iPods else they would pull their contracts or raise wholesale prices. Or they might, in this case, ensure in their "Total Music" contract that the labels won't offer similar unlimited download packages to other hardware makers.
As far as I can tell with my limited economics experience, nothing Apple is doing could be construed as an abuse of its market power.
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3-24-2008 @ 12:34PM
Andrew Wise said...
...or only allow users to access their "total music" package through iTunes
3-24-2008 @ 1:14PM
Jason said...
Only allowing iPod users to access "Unlimited Downloads" through iTunes isn't abusing market power, at least not in any way that I can see... it would only be abuse if you had no choice but to pay for the unlimited downloads when you buy an iPod. Keep in mind though, this is not the original issue of being monopolistic in hardware sales, but now in music distribution.
If, as Apple would be likely to do, you have the option of paying an extra fee when you purchase an iPod, then there is no abuse. You're completely free to turn down their package option and buy your own music from any other store out there. Even if you signed up for the all-you-can-eat option, you still have the choice of buying music elsewhere... it would just be a waste of the extra money you had already paid to iTunes.
3-24-2008 @ 1:59PM
Aron Trimble said...
It's just clear that eMusic is afraid of a market in which it must compete directly with Apple...
There are still other MP3 players and other subscription services - this is in no way monopolistic.
Now if we add a thimble and free parking, then maybe - but until then, no way!
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3-24-2008 @ 2:03PM
punkassjim said...
I love how everyone goes nuts when a RUMOR goes around. Sure Pakman has a vested interest in what happens, but seriously...he doesn't even know if this is the plan that Apple is thinking about executing. And "minor" details could easily change whether or not they're being anti-competitive.
The thing that blows my mind is this: how is it that being "extremely competitive" has somehow been made out to be "anti-competitive?" Are we supposed to assume that, when a market leader gets as huge as Apple/iTunes has, that they're just supposed to stop bringing better options to their customers? This is ridiculous. Pakman: keep up or take notes.
I'm not saying the subscription model is Apple's original idea...of course others have tried it already. Zune is a perfect example, albeit not a model I'd want to follow. I'd say, if Apple implements a subscription model (because let's face it...this is kinda still just a rumor), they're highly likely to do it right.
Just really bugs me that these corporate whiny bastids are just belly-aching about the shake-up of their status quo. They want to rest on their laurels and hope their business model continues to be profitable. Sorry to tell ya, kids, but you're being beaten at the game. Get better.
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3-24-2008 @ 2:28PM
David said...
Andrew:
Apple is not in a monopoly through the manipulation of the market. Microsoft and Intel both manipulated the market by refusing to sell to resellers who carried a competitive product, thus restricting the ability of competitors to be able to compete.
Apple has a monopoly on the market because they have built a better mousetrap, not because they would not allow other manufacturers to sell competing mouse traps.
Apple has not told BestBuy, Wal-Mart, or any other retailer that they would lose their discounts if they sold competing products. (making that reseller unable to compete)
Apple has not restricted the iPod's to only play music purchased from iTunes.
In the same vein, Apple has not engineered any exclusive distribution rights with major labels that prevents the Label from selling on Amazon MP3, PlaysForSure, Zune Store, eMusic and others.
So consumers have not been manipulated into a situation where the only viable choice for a portible music player and the music for it must come from Apple.
The simple fact is that Apple is not an illegal, anti-competitive monopoly. They simply have delivered a a combination of devices and services that is so compelling that the consumers massively prefer Apple by choice, and not due to lack of other options.
Some people are whining about iTunes not being open to other players, but it us a well established fact the the same music at the same prices is available from multiple vendors. Again Apple dominates by sheer customer preference, and not market manipulation!
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3-24-2008 @ 3:11PM
Christopher Burden said...
While I get where this guy is coming from, eMusic can fuck right off. They have a big record for offering people a free trial, and then charging for it anyway (like they did with me, signed up for a free 14 day trial and cancelled after 1 day without downloading any songs, and they charged me for the hell of it). They also have a terrible selection of music, if they care so much about competing with iTunes, maybe they should change that?
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3-24-2008 @ 4:43PM
Dale said...
Depends on your tastes, really... they are clearly not for someone who wants mainstream, major label fare; but they are great for more obscure music.
3-24-2008 @ 6:17PM
Chris said...
I guess it depends on what type of obscure music you like then, the stuff I search for isnt very mainstream. I guess if you find it good for some rare stuff you like though, then it can be good :)
3-24-2008 @ 6:40PM
Megan said...
And you'd never want to listen to anything mainstream would you Dale? Good ol' Mister Radiohead-Smashing Pumpkins-Bowie-Bright Eyes-R.E.M fan who boasts an entirely pigeon-holeable last.fm profile, well done!
3-24-2008 @ 8:47PM
Ethan said...
If this goes forward, I think anybody who cares about independent music will flock to emusic.
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