Douglas C. Merrill used to work for record label EMI, one of the biggest members of the RIAA. He was forced out just a year later, but now he's sharing information from inside the company. And some of that information points to an interesting conclusion about music pirates: they often end up being some of the music industry's best customers. Speaking at a conference in Sydney, Merrill said that a profile they'd conducted of users of the LimeWire music sharing service portrayed them as some of the biggest spenders on iTunes. "That's not theft, that's try-before-you-buy marketing and we weren't even paying for it," Merrill said at the show, "so it makes sense to sue them." That last part is sarcasm, we're pretty sure.
Of course, most record companies saw illegal downloading as purchases that just didn't happen, and thus lost revenue. But this conclusion hints that "pirates" aren't taking away from music sales -- they're just download music to fill out their already big purchased collections.
That's the kind of premise that the upcoming iTunes Match seems to be banking on, where users will be able to pay a subscription fee to verify any music downloaded outside of iTunes as official iTunes purchases. It would certainly end up being ironic if it turned out that the very same customers the RIAA attacked and sued back during those early days of filesharing were some of the same customers ringing in the digital music age that's now keeping record companies afloat.
[via Boing Boing]
Former EMI boss says Limewire users were major iTunes customers originally appeared on TUAW - The Unofficial Apple Weblog on Tue, 26 Jul 2011 14:15:00 EST. Please see our terms for use of feeds.
The New York Post is reporting that three separate sources have told them Apple is paying the big four music labels between $100-150 million for the rights to distribute their music through the new iCloud service, which is set to debut on Monday. Their sources say that each label will get between $25-50 million depending on the number of tracks iTunes users are storing.
On Tuesday, Apple issued a press release stating that Steve Jobs will unveil the iCloud service on June 6. iCloud is widely expected to be a cloud-based digital locker that allows users to stream any music they own to any device they own. Apple has been aggressively working on deals with the major music labels for a while now, first getting Warner, then EMI and Sony to get on board. The last holdout, Universal, is rumored to have signed with Apple late last week. With up to a $50 million signing bonus, any cash-strapped music label would be crazy not to accept Apple's offer.
Apple's music streaming service is inching closer to launch according to industry sources. Earlier rumors suggest Apple already inked licensing agreements with three of the four major record labels, including EMI Music, Warner Music and Sony Music. The one remaining holdout is Universal Music, which is still working with the Cupertino company.
Besides the record labels, Apple also needs to obtain publishing rights from the individual music publishers. Insiders claim only a small amount of cash is keeping Apple from inking these final agreements, but these negotiations can be long and messy.
There is supposedly some tension between the music publishers and the record labels that has to be ironed out before Apple can launch its online streaming service. The record labels are not happy that publishers are getting the bulk of the cash Apple has put on the table for its cloud service. Wisely, the Cupertino company is reportedly playing the two music entities against each other and letting them duke it out. Apple hopes this money problem can be resolved and negotiations will wrap up in time for a WWDC announcement.
Three down, one to go. Just a day after CNET suggested that EMI joined Warner Music Group in allowing Apple to distribute their music over a cloud-based service, now Bloomberg is claiming that Apple has also officially inked a deal with Sony Music. That leaves just one of the big four music labels -- Universal Music Group -- left to sign on with Apple. And as Bloomberg states, Universal is supposedly close to signing with the iPod maker soon.
As I mentioned yesterday, getting all four major music labels to sign on to a cloud-based service is seen as a serious win and another vote of confidence for Apple's rumored streaming media services. Both Google and Amazon launched their online music services without any major music label support. Apple's cloud music service, expected to be dubbed iCloud, may be unveiled at WWDC on June 6.
Sources have told CNET that EMI has signed a deal with Apple to license its music for cloud-based services. EMI joins Warner Music Group, which signed on with Apple for cloud-based music services last month. The remaining two major labels, Sony and Universal, are expected to sign similar deals with Apple as early as next week.
Getting all four major music labels to sign on to a cloud-based service is seen as a serious win and another vote of confidence for Apple's rumored cloud-based digital distribution services. Amazon and Google both launched cloud-based digital lockers earlier this month, yet neither of those companies have any agreements with the four major music labels. Cloud-based services are rumored to be a big part of iOS 5, and late last month it was revealed that Apple's digital locker services might be called iCloud after Apple bought the icloud.com domain from a Swedish company.
Launched with iTunes 9, iTunes LP would let record labels include extra content, such as liner notes, expanded artwork and lyrics, in albums sold on iTunes. The feature never took off, but the concept of adding value to an album using interactive digital content has not died. Record labels such as Universal Music Group and EMI are now looking to the iPad as a way to entice customers to purchase a full album with value-added content instead of individual tracks.
EMI recently released an iPad version of Until One, a dance album from Swedish House Mafia. Besides audio tracks, the iPad album includes video footage, a photo gallery and commentary from the band. The content is distributed as an iPad app and costs US$9.99. Universal has also jumped on the interactive album bandwagon and has teamed with a video production company, Eagle Rock Entertainment. The duo are working on an interactive iPad versions of classic albums such as Nirvana's Nevermind. This latter project is currently under development.
Only time will tell if this latest focus on enhanced album content will succeed. In the past, consumers eschewed bonus content, but the 9.7-inch display of the iPad provides a richer multimedia experience than the iPhone. Given the choice, would you pay more for an enhanced iPad album or would you stick with the less expensive, music-only option?