Apple vs. Record Companies

Published: 2005-09-26
Just when we thought that Apple and the record companies were like two peas in an iPod, Apple CEO Steve Jobs decides to open his big mouth.

What's ensued is a war of words between Jobs and the bigwigs of the music industry. Here's a basic breakdown of the argument: At the Paris Apple Expo last Tuesday, Jobs made a speech calling the record labels whose songs Apple sells on the mega-successful iTunes online music store "a little greedy" for suggesting a price increase from the current $0.99 a song. He argued that the record labels were already making an increased profit from selling digital tunes rather than CDs because of the savings in packaging and marketing. He also says that raising prices would encourage piracy, which both he and the labels are trying to battle.

Spurned by the Apple CEO, heads of major labels argued that the only reason Jobs wants to keep the digital song price tag at $0.99 is because his iTunes has an 82% share of the digital downloading market and he doesn't want to lose it. They say that charging higher prices for newer or more exclusive tunes is totally acceptable. This all comes at a time when major record labels are looking to renew contracts with iTunes and are hoping to sweeten the deal by increasing prices.

Meanwhile, music lovers are left scratching their heads and wondering what happened to the good old days when we used to sit and record songs off of the radio.

Writer: Michelle Garcia



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