NYT: Music execs operate 'in fear of Apple'

In today's New York Times, Tim Arango tells a story of a heated conversation between Sony Music's Rolf Schmidt-Holtz and Steve Jobs on Christmas Eve -- one that "ricocheted around the music industry."

Apparently, before the announcement at Macworld, all the labels except Sony had agreed to a new pricing deal. Sony wanted the new pricing to take effect immediately after the announcement, but Jobs wanted a longer rollout. After the phone call, according to the Times, Sony agreed to the longer waiting period.

During this time, Jobs was allegedly on medical leave, recuperating at home from his much-publicized illness. Arango notes that Jobs' point-man on music industry relations, Eddie Cue, and Apple's entire staff "do their best to follow Mr. Jobs's style in their own negotiating." That is to say: Hardball.

Music executives, according to an unnamed source, are afraid of angering Apple, as Apple can single-handedly remove a label's catalog from the iTunes store, angering the label's customers. At the same time, Apple can claim that their hands were tied, the decision wasn't theirs, and that all the ire should be directed at the music industry. Such a thing hasn't happened -- yet -- but the threat is there, and real.

The labels, on the other hand, feel like they brought Apple back from the dead, blessing the company with content.

Even so, David Card of Forrester Research offered an interesting coda to the story: "if it weren't for Apple, God knows how bad the music industry would be," he said.

[Via 9-to-5 Mac.]