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"Apple doesn't care about the record industry"

Filed in archive People by Marc on February 22, 2006

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For an alternative viewpoint, listen to Tony Brummel, foudcer and CEO of indie label Victory Records.

"Apple/iTunes do not care about independent labels or, for that matter, the record industry. Without the music industry, their site and their iPods are useless."

He is concerned why the labels didn't extract an advance for the privilege of selling music, a rare practice in other industries. By his own words Brummel cares only about power, begrudging the success of iTunes. He cares little about the customer. Music consumers have made it clear with their wallets that Apple and iTunes is about the only thing right with paid digital music today.

More from the article:

'What's the real deal?'

He asks why the major labels agreed to a deal which helped Apple sell iPods but also meant that in many cases consumers simply cherrylinks-pick the songs on albums, with a knock-on effect of impacting artist incomes.

"Has anyone looked into any stock option kickbacks here?" he asks: "Since when do record companies give their content away without extracting an advance?"

It is believed that the major labels require substantial advances from digital music services in order to allow them the rights to even carry their content on their services. These advances are understood to be in addition to any profits made from a la carte track sales. Sources have claimed that these advances have recently been dramatically increased.

'Stand up, pull out'

Apple now carries a great deal of clout in the music industry, as its market share means it is responsible for a significant percentage of sales.

Addressing this, Brummel said: "If only 4 per cent of this business is iTunes, who cares? Focus on the 96 per cent which is traditional retail. Traditional retail supports music 1,000 times more than iTunes does."

He also explains that if the majors truly wanted to make a stand against Apple's insistence on a set pricing model, they would all "pull their content" from Apple's service.

"I absolutely believe that allowing people to cherry-pick the tracks they want from each album cannibalises full-length album sales and is ultimately detrimental to the artists who created the music," he explains.

Brummel doesn't mention his thoughts on music piracy - downloading music from peer-to-peer websites - and the damaging effect that has had on the music industry. Apple has always maintained that iTunes was part of the battle against online music piracy.


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