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.]

I don't quite understand their reasoning. I think most phone-based ringtone sales are outrageously overpriced. Increased sales volumes will benefit the labels even at the current wholesale prices. Ah well, another example of Underwear Gnome economics in action.

You authorized your computer to your iTunes account long, long ago. So why don't your iTunes Ringtones sync to your iPhone? Turns out that you're going to have to reauthorize your computer to allow it to use ringtones. Yes, not only do you have to sign a new terms of service to buy that ringtone but you also have to add a separate authorization.

Ah, there's nothing quite like the smell of RIAA in the morning.

Gallery: Song Sender

Song Sender allows you to pick a song from your iPhone's song library and send it to a friend via email. If you'd like to use a song from your library as a ringtone, you can do that too. Install the package into your iPhone using your favorite installer application. When run, the software reads through your library, creating a scrolling list of your songs. Tap any song and you'll be prompted with three choices: play it, send it by email, or add it to your ringtones.

It practically reaches Zune-levels of squirting functionality! Small print: Fair use only. This software is not intended for pirating purposes. Use your powers for good, not evil. Do not take internally. Software is not a substitute for advice provided by a doctor, lawyer, or the EFF. In case of rash, itching, or swelling seek medical attention immediately. This software was brought to you by the letters E. r. i. c. and a. Do not use SendSong to install iTMS-purchased tracks as ringtones.

Update: Version that does not rely on whether you've installed /bin/cp is found here.

One can only presume that in addition to the standard RIAA/Simon Cowell approach[1] to signing musicians, Starbucks will also provide a small percentage of highly-decaffeinated Fair Trade Certified™ recordings, where lucky musicians will receive equitable royalties if ordered in Grande or Venti sizes. Because "Medium" and "Large" talents do not exist at Starbucks.

[1] You have potential but frankly I was bored.[2]

[2] I really felt your performance. You made it your own.[3]

[3] Dawg. Dawg. Dawg.

Now EMI is looking to take the next step. An unnamed Forbes source says that EMI has solicited proposals from their retailers to tell the company how they would offer DRM-free MP3s. The retailers would offer large advances in exchange for the right to sell MP3s. EMI will weigh whether to continue forward with the scheme based on the size of the offers, and the Forbes source said a decision from EMI about going forward with the scheme could be made quickly.

Are the dams breaking? Or is this just more hopeful rumors in the wake of Steve Job's recent open letter? Only time will tell.

IGN reports that innovative marketing solutions like Apple's iTunes store and stores that sell digital ringtones are putting too much money into the pockets of the artists who actually create and perform music. The RIAA has petitioned the federal US Copyright Royalty Judgets to lower the rates paid to songwriters for the digital use of their creations. Apparently things have changed a great deal since 1981, the last time the US government set the royalty rates.

The petition brief apparently read in part, "Mechanical royalties currently are out of whack with historical and international rates...We hope the judges will restore the proper balance by reducing the rate and moving to a more flexible percentage rate structure so that record companies can continue to create the sound recordings that drive revenues for music publishers."

According to MacWorld UK, the Copyright Office of the US Library of Congress has rejected a petition which requested that owners of iPods and other portable media players be allowed to rip the CDs and DVDs they own to their own playback devices. You'd imagine, wouldn't you, that you should be allowed to transfer material you own so long as you make sure that multiple copies would never be played simultaneously. But no. The RIAA strenuously disagrees. Apparently space-shifting and format-shifting do not count as non-infringing uses.

You can read the Electronic Freedom Foundation's reply to the ruling here.