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Behind the Scenes In Apple Vs. the Record Labels

CmdrTaco posted more than 5 years ago | from the does-steve-wear-turtlenecks-in-private-too dept.

Music 146

je ne sais quoi writes "The New York Times recently posted an article describing what really happened between Apple and the Record labels that culminated with the January 6th Macworld Keynote by Apple Senior VP Phil Schiller." Essentially they discuss a bit of a swap: Apple allowed variable pricing for songs and the industry allowed DRM free music. And apparently the iTunes homepage is a huge hit making device. Big shock.

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iMusic industry news (5, Interesting)

zappepcs (820751) | more than 5 years ago | (#26726999)

Can we get a special section for iMusic news? Apple did what the music industry should have done and failed to do. Perhaps Apple should start the iMusic label and start signing artists, sort of an effort to put the music industry into perspective with it's current situation. It would be an eye opener for the RIAA.

Re:iMusic industry news (2, Insightful)

initdeep (1073290) | more than 5 years ago | (#26727049)

maybe it was the fact that apple changed their stance on different pricing models that really made the difference, and thus the record labels were correct......

just because apple did something, doesnt mean it was a golden decision and everyone else is wrong.

Re:iMusic industry news (3, Insightful)

fpophoto (1382097) | more than 5 years ago | (#26728895)

maybe it was the fact that apple changed their stance on different pricing models that really made the difference, and thus the record labels were correct......

just because apple did something, doesnt mean it was a golden decision and everyone else is wrong.

That's not what the GP meant. He wasn't talking about variable pricing, but the original digital distribution of music, which at the time, the record labels were awful fearful of. Back then, "mp3" was a dirty term at record labels, and other services were jokes. Apple basically showed not only the labels but other online music vendors how to do it right, and their huge financial success at it, as well as now being able to bargain with the labels to remove DRM, a concession which should be looked at with at least a certain amount of awe, shows they are right.

DRM free? Apple is late to the party. (0)

Anonymous Coward | more than 5 years ago | (#26729033)

Why couldnt Apple do it when Amazon and others could sell DRM free music?

Actually, doesnt Apple carry some DRM music in the store?

>the industry allowed DRM free music

Again, how did Amazon and company do it?

Apple is late again to the party and were supposed to hail them?

Re:DRM free? Apple is late to the party. (0)

Anonymous Coward | more than 5 years ago | (#26729155)

"Again, how did Amazon and company do it?"

A wild guess. Variable pricing?

Re:iMusic industry news (5, Interesting)

DrLang21 (900992) | more than 5 years ago | (#26727113)

Apple opening it's own record label would put it at serious odds with the the other labels that it sells. A better solution would be for Jobs to start his own record label completely independent of Apple. The single song electronic sales business model has already been forced onto the music industry, so the only purpose of a new record label would be to explore the other flaws in the system, like constructed pop stars.

Re:iMusic industry news (1)

zappepcs (820751) | more than 5 years ago | (#26727153)

holy shit... you thought I was serious? I guess I better use the [sarcastic yet annoyingly droll humor] tags

Re:iMusic industry news (1)

DrLang21 (900992) | more than 5 years ago | (#26727197)

Even if you weren't serious, it's not a bad idea conceptually. I would love to see a new label come out that has the power to make the old big names sweat.

Re:iMusic industry news (3, Informative)

m93 (684512) | more than 5 years ago | (#26727207)


Apple can't open it's own record label. From Wikipedia: "In 1978, Apple Corps, the Beatles-founded holding company and owner of their record label, Apple Records, filed a lawsuit against Apple Computer for trademark infringement. The suit was settled in 1981 with an undisclosed amount being paid to Apple Corps. This amount had been estimated to be US$50â"US$200 million, but was later revealed to be US$80,000.[1] As a condition of the settlement, Apple Computer agreed not to enter the music business, and Apple Corps agreed not to enter the computer business."
http://en.wikipedia.org/wiki/Apple_Corps_v._Apple_Computer [wikipedia.org]
They got into hot water with Apple Records when iTunes got big. An actual recording label would blatantly go against the agreement.

Re:iMusic industry news (5, Informative)

idobi (820896) | more than 5 years ago | (#26727457)

Apple can't open it's own record label. From Wikipedia: "In 1978, Apple Corps, the Beatles-founded holding company and owner of their record label, Apple Records, filed a lawsuit against Apple Computer for trademark infringement. The suit was settled in 1981 with an undisclosed amount being paid to Apple Corps. This amount had been estimated to be US$50â"US$200 million, but was later revealed to be US$80,000.[1] As a condition of the settlement, Apple Computer agreed not to enter the music business, and Apple Corps agreed not to enter the computer business." http://en.wikipedia.org/wiki/Apple_Corps_v._Apple_Computer [wikipedia.org] They got into hot water with Apple Records when iTunes got big. An actual recording label would blatantly go against the agreement.

This agreement is no longer in effect. Apple Corp has signed over all Trademark for Apple to Apple Computer, Inc (now Apple Inc) in 2007. In return, Apple Corp has a perpetual license to use the Apple name for their label. However Apple Inc. can now do whatever they want with regards to the music business.

Re:iMusic industry news (1)

tchuladdiass (174342) | more than 5 years ago | (#26727517)

That is something I never understood. Normally, two different companies can hold a trademark on a common word if they are in different industries, which is why we can have a Linux OS and Linux Soap. So how could Apple Records have any standing to sue Apple Computers? Of course, they didn't "win" the suit, as it was settled out of court, but still...

Re:iMusic industry news (-1, Redundant)

xouumalperxe (815707) | more than 5 years ago | (#26727583)

Because Apple Computers has been encroaching on Apple Records territory for a while now?

Re:iMusic industry news (1)

Nicholas Evans (731773) | more than 5 years ago | (#26727743)

...uh...did you read the blurb?

In 1978, Apple Corps, the Beatles-founded holding company and owner of their record label, Apple Records, filed a lawsuit against Apple Computer for trademark infringement. The suit was settled in 1981 with an undisclosed amount being paid to Apple Corps.

Re:iMusic industry news (1)

the phantom (107624) | more than 5 years ago | (#26727833)

The lawsuit was from the late 70s. Apple Computers didn't really have a stake in the music industry at the time.

Re:iMusic industry news (1)

jellomizer (103300) | more than 5 years ago | (#26728321)

It is about protecting your brand identity. If you Saw Linux OS and Linux Soap. If you know one or the other you will associate the two together. So you may see Linux Soap as some sort of a more socially responsible Soap Even if it is made from the harshest chemicals and slave labor. And Vice Versa if you know Linux Soap you may see Linux OS as an evil corporate identity.

Re:iMusic industry news (3, Funny)

The Redster! (874352) | more than 5 years ago | (#26727737)

Apple Corps

Baltimorps!

Re: Exploit other flaws in system (4, Insightful)

TaoPhoenix (980487) | more than 5 years ago | (#26728025)

You mean the pillaging of artists currently practiced by the labels? iTunes has profoundly revolutionized the music world, and is mostly fair to consumers.

What about a label that revolutionizes management and actually works unobtrusively for the artists??

NewBand: "Why should we sign with you and get 3 cents on the dollar before "expenses" when iMusic gives us 62 cents per buck *after* legit expenses?"

Re: Exploit other flaws in system (1)

whoever57 (658626) | more than 5 years ago | (#26728143)

NewBand: "Why should we sign with you and get 3 cents on the dollar before "expenses" when iMusic gives us 62 cents per buck *after* legit expenses?"

Why not "Old, successfulBand"? They don't need the one thing the label can give them: publicity?

Re: Exploit other flaws in system (1)

cowscows (103644) | more than 5 years ago | (#26729565)

True, and some successful bands have done just that. But the equation is different for an established and popular band. They've got some leverage to negotiate with the record labels. The labels aren't taking as big of a risk backing a guy who's already had three platinum albums as they are with a guy nobody has heard of. The plus hopefully the ability and wisdom to hire a decent lawyer to protect them, and said famous band should walk away with a much better deal than your average no-name group could ever hope to get.

Sure, Aerosmith could print their own CD's and make deals with walmart and amazon and iTunes to carry their music. But if they can negotiate a good deal with Sony and let someone else do all that busywork instead, then maybe it's worth it for them.

Re: Exploit other flaws in system (1)

DrLang21 (900992) | more than 5 years ago | (#26728239)

Magnatune already does this, but they operate somewhat in their own bubble. They don't play on the same field as the big hitters, I assume because of money. The big labels know how to promote, I'll give them that much. If Magnatune could promote on a level playing field with everyone else, the tides might change.

Re: Exploit other flaws in system (1)

geekoid (135745) | more than 5 years ago | (#26728431)

That's because Apple record abused the intent of trademark, and Apple computer found it cheaper to settle.

This of course changed years later with the iPod, something that couldn't ahve been predicted when the Apple trademark abuse^H^H^H^H^H issue came up.

Re:iMusic industry news (1)

MacColossus (932054) | more than 5 years ago | (#26728303)

Better yet, Jobs as primary share holder in Disney and board member could have Disney start a record company. They could have an exclusive sweetheart deal with Apple and the itunes store. Look at all the best selling bubble gum crap out there. Britney, Christina Aguilera, Justin Timberlake, Ashley Tisdale, etc all started on Disney.

Re:iMusic industry news (1)

DrLang21 (900992) | more than 5 years ago | (#26728403)

Disney already has a record company called Walt Disney Records [go.com] . Their lineup appears to target preteenage and young teenage girls.

Re:iMusic industry news (3, Informative)

UnknowingFool (672806) | more than 5 years ago | (#26728425)

Correction: Jobs is the largest single stockholder in Disney. He owns approximately 7% of Disney. "Primary Share holder" was more correct for Bill Gates who used to own more than 51% of MSFT. Currently Gates is also largest single stockholder with 8%.

Re:iMusic industry news (0)

Anonymous Coward | more than 5 years ago | (#26728515)

Of course, Netflix seems to do fine with its own production and distribution companies.

Re:iMusic industry news (1)

ceoyoyo (59147) | more than 5 years ago | (#26729391)

Hey, it's worked for him before. He could then buy the major labels for a negative price, just like Pixar bought Disney and NeXt bought Apple.

Re:iMusic industry news (5, Funny)

TimmyDee (713324) | more than 5 years ago | (#26727617)

It would be an iOpener for the RIAA.

There, fixed that for you.

Re:iMusic industry news (1)

DevConcepts (1194347) | more than 5 years ago | (#26727785)

Where are my mod points when I need them?!?
Funny +3

Apply won't start (1)

Bysshe (1330263) | more than 5 years ago | (#26727755)

Apple won't start a music label for the following reasons:

Its not their core business - (appears to be a logical step but itunes faciliatates sales of ipods and other apple gear). Apple might be able to hire the skills but it doesn't match their business strategy

It would be business suicide. Once apple start competing with labels, they'll pull their libraries and Apple will lose their entire competitive edge in the market being able to offer only new stuff

It would in the long run make them uncool. Apple would turn into "the man" as other labels scramble emulate them. Eventually apple will be just another label.



you have to remember - apple is in the business of making money NOT doing whats necessarily benevolent for the consumer. Bad to say it that way but its reality. Apple ultimately answers to shareholders and shareholders don't care about RIAA conflicts if it doesn't impact their shareprice.

Re:Apply won't start (4, Insightful)

larry bagina (561269) | more than 5 years ago | (#26727907)

One point the article made (not that anyone read it) is that the labels were scared Apple would drop them.

Re:Apply won't start (1)

Bysshe (1330263) | more than 5 years ago | (#26728627)

One label walks, ITMS is fine

All labels walk, ITMS is dead.

Re:Apply won't start (0)

Anonymous Coward | more than 5 years ago | (#26729073)

One label walks, their shareholders lynch them for running away from an enormously lucrative market. All labels won't walk, because someone's gotta go first, and the first to walk is the first to fall.

Re:iMusic industry news (4, Insightful)

mcgrew (92797) | more than 5 years ago | (#26728103)

Perhaps Apple should start the iMusic label and start signing artists

Because it's completely unneeded. The labels actually had a function last century, as it cost a shipload of money to record and press a record. These days you can build a studio, record your album, and get a thousand CDs professionally duplicated, with cover and printing, for not much more than the band's instruments are worth.

The industry isn't going after P2P because you're going to hear one of their artists, they're afraid you'll hear an independant artist (probably 10 times as many "unsigned" bands than label chattel) and buy their CD instead of an RIAA label CD.

Re:iMusic industry news (1)

Orion Blastar (457579) | more than 5 years ago | (#26728711)

Agreed but the RIAA usually sues the teenage girls and grandmothers who get the IP after it is released from the music pirate that was using it to download over 12 MP3 files that are pirated versions and then reset their DSL modem to get a new IP.

It seems the RIAA doesn't care if someone downloads less than 12 songs in a row, but if they download 12 or move they get the Internet subpoena.

BitTorrent web sites are used for pirated music as well as free and open sourced music files [goingware.com] from independent artists without a recording label or the RIAA or iTunes pushing their songs down our throats. But if the RIAA can get all BitTorrent sites down, they can screw the independent artists as well as their fans.

Just like file sharing is used to download Windows XP Pirate Edition, it also is used to download Linux, *BSD Unix, AROS, etc which are free and open source operating systems.

Re:iMusic industry news (1)

Orion Blastar (457579) | more than 5 years ago | (#26728647)

I think Billy Idol [chaoscontrol.com] proved that music can be made on a personal computer just as well in a music studio when he made the Cyberpunk album on a Macintosh system in 1993.

With modern Macintosh systems I am sure they can do a better job. Maybe Apple can make an iStudio software package to interface with home studio equipment and have artists make their own music, which they can pay a fee and get published on iTunes and become their own producers.

Re:iMusic industry news (3, Informative)

anagama (611277) | more than 5 years ago | (#26729039)

They already sell the software to make the tracks: http://www.apple.com/logicexpress/#recording [apple.com]

And it looks there is some sort of approval process at Apple to get your songs online, and lots of various companies that will help with this step, for a fee of course. http://answers.google.com/answers/threadview/id/564768.html [google.com]

The only missing part is the free-for-all publishing system of YouTube, which is probably a good thing.

Re:iMusic industry news (1)

pxuongl (758399) | more than 5 years ago | (#26729117)

if they did that, apple would need to spin off the itunes music store in order to avoid a conflict of interest and anti-trust issues

Re:iMusic industry news (1)

thetoadwarrior (1268702) | more than 5 years ago | (#26729215)

I don't think they can start their own label as the Beatles' Apple Records would be all over them. They had trouble just for starting iTunes but I think they'd definitely lose any battle for starting a music label.

Sorry, I don't speak Vague (2, Insightful)

A. B3ttik (1344591) | more than 5 years ago | (#26727135)

I'm really having a hard time gleaning any actual content from this article. Other than the first paragraph, where Apple is allowing Sony to jack up prices so long as there's no DRM... it really doesn't say much.

There's sensationalist crap about how the companies are "uneasy" with this truce and each one wants the other gone... I'm not really sure why.

The one interesting idea brought to the table was the idea of a "subscription fee" for music... pay a monthly fee and listen to _whatever_ you want. I'm not sure how I feel about that. On the one hand, I kinda like it as a compromise between DRM and piracy, but on the other hand, it doesn't seem like that would _stop_ piracy at all.

Re:Sorry, I don't speak Vague (2, Interesting)

zappepcs (820751) | more than 5 years ago | (#26727269)

It wouldn't stop piracy^H^H^H^H^H^H copyright infringement, but it would encourage end users to listen to more music as well as encourage them to purchase music and create a reliable 'up front' revenue stream that is not based on having to produce strings of top ten artists singing the same old crap all the time. As business models go, it's good for the distributor, bad for the end users. It's like that extended warranty stuff. The worst possible model for the RIAA et al was the $0.99/song model; which happens to be the best model for the end user.

There are few other services or products that suffer from using the 'up front' revenue stream model. Look at how your ISP, insurer, cable company, music clubs, just about everybody tries to use this model. Grocery stores attempt to get you to purchase only at their store using the discount cards, and soon they will also be using the 'up front' revenue model in some business plans. Wait till they offer you an averaged food bill where you pay a set fee every month like you do with electric service etc. It's all about getting your money on a regular recurring basis, or get you to pay for something that you might never actually use.

Re:Sorry, I don't speak Vague (2, Informative)

kannibal_klown (531544) | more than 5 years ago | (#26727285)

...
The one interesting idea brought to the table was the idea of a "subscription fee" for music... pay a monthly fee and listen to _whatever_ you want. I'm not sure how I feel about that. On the one hand, I kinda like it as a compromise between DRM and piracy, but on the other hand, it doesn't seem like that would _stop_ piracy at all.

The subscription thing has been done. There are one or two mainstream services that offer that. Some people love it, others hate it.

Personally I'm not a fan, while listening to anything I want on-demand is cool I hate subscriptions, particularly for something like this.

I'm not that into music. On average I buy maybe 1-2 songs a month from iTunes, more if I get a gift card or want a whole album. That's $24-$36 USD per year with the latest variable prices, and I get to keep my music.

If I was REALLY into music and listed to a LOT of stuff then I could see the benefit. But for me, i'm fine with the occasional song purchase.

Re:Sorry, I don't speak Vague (0)

JCSoRocks (1142053) | more than 5 years ago | (#26727735)

You mean like Rhapsody? Or you could just listen to any music you like for free by going to GrooveShark. Or you can let Pandora pick music for you but still enjoy it for free.

Re:Sorry, I don't speak Vague (0)

Anonymous Coward | more than 5 years ago | (#26728093)

Yeah but it's too bad that the RIAA is looking to use Congress via the Royalties Board to try to kill off Pandora. I hope that Pandora sticks around as well as other internet radio but we all know how Congress is.

Re:Sorry, I don't speak Vague (1, Insightful)

Anonymous Coward | more than 5 years ago | (#26729349)

Subscription = DRM. It's as simple as that.
There's no way you can run the subscription model without it. We've already seen what can happen if the DRM authorizing servers go offline.

misleading wording (5, Informative)

Sloppy (14984) | more than 5 years ago | (#26727167)

record companies gave up their demand for copyright protection (called digital rights management)

No, they gave up DRM, and copy protection is sort of related to that. They did not give up anything even remotely related to copyright protection, unless I somehow missed the part where Apple talked RIAA into releasing works into the public domain.

That's just plain wrong. Bad reporter!

Re:misleading wording (3, Insightful)

Fahrvergnuugen (700293) | more than 5 years ago | (#26727375)

Arguably that's the difference between copyright and copy protection. One is a rule, one is an attempt at enforcement.

Re:misleading wording (2, Insightful)

noundi (1044080) | more than 5 years ago | (#26727593)

That's just plain wrong. Bad reporter!

Sure sure... but did your browser display the ads properly? Oh wait, you thought reporters are supposed to write the truth! It's an honest mistake, the job title kind of tricks one into it. We should change that by the way, I think come-see-the-ads-on-my-site-guy would be a more suitable title.

Re:misleading wording (1)

mcgrew (92797) | more than 5 years ago | (#26728199)

It's even worse reporting than that. DRM is copy "protection" (or would be if fairy dust existed and you really could make bits uncopyable), but copyright protection is cops, lawyers, and legislators.

You can't protect your copyright with DRM. You can only fool yourself into thinking it can keep anybody from infringing copyright.

SRM - Dumb Restrictions of Media

Re:misleading wording (3, Insightful)

cyber-vandal (148830) | more than 5 years ago | (#26728275)

SRM - Dumb Restrictions of Media

Ironic typos are the best!

A taste of their own medicine? (1)

Fahrvergnuugen (700293) | more than 5 years ago | (#26727273)

"In interviews, several high-level music executives, who spoke on the condition that they not be named to avoid angering Apple, said they operated in fear of Appleâ(TM)s removing a labelâ(TM)s products from the iTunes store over a disagreement, even though that has never happened. The labels do not have much leverage in negotiating with Apple."

IMO, it's about time someone gave these bastards a taste of their own medicine.

Re:A taste of their own medicine? (2, Insightful)

CannonballHead (842625) | more than 5 years ago | (#26727311)

IMO, we need someone to challenge Apple, too. Magnatune is pretty cool, but not quite competing with iTunes (Amarok + Magnatune, admittedly, is pretty neat though).

Re:A taste of their own medicine? (1)

je ne sais quoi (987177) | more than 5 years ago | (#26727381)

Something that I thought was interesting from the article that didn't make it into the summary was this quote:

Even if Mr. Jobs does not get personally involved in future negotiations, music executives still fear dealing with Apple. One chit the company holds is the power of the iTunes home page, where it promotes music. They also say that the entire Apple staff, including Eddie Cue, the vice president in charge of iTunes who handles the relationships with the record labels, do their best to follow Mr. Jobs's style in their own negotiating.

Apparently, the people at Apple have been making sure that Apple will maintain the same culture without Mr. Jobs. Could be good, but without a single egomanical guy in charge, maybe there will be a lot of discord? Too many cooks and spoil the broth? Time will tell.

No Pity/Sucks to be them. (5, Insightful)

fuzzyfuzzyfungus (1223518) | more than 5 years ago | (#26727305)

Really, the ip0wning that the record guys are now receiving is their own fault(and I, for one, am experiencing everybody's favorite German emotion [wikipedia.org] ). They wanted DRM to protect their precious content. DRM is, by nature, inimical to interoperability. Thus, the record labels, by forcing people who wanted to buy music online to choose lock-in to one DRM camp or another, created a situation where the winning DRM "ecosystem" would be extremely valuable, and powerful, and all the others would be near worthless. Shockingly enough, playsforsureexceptonzune wasn't the winner.

If the online music business were a bunch of generic outfits selling MP3s(or generic AAC) then the relationship between the labels and the retailers would be a lot more like the brick and mortar one. By pushing DRM, the labels created something they can't really seem to handle. Had they just stopped clinging to the nonsense dream of magic interoperable DRM, they might well have been able to avoid this. Idiots.

Re:No Pity/Sucks to be them. (3, Insightful)

morgan_greywolf (835522) | more than 5 years ago | (#26727701)

They should just stop clinging to the notion of selling something tangible. Music is an intangible product and always has been -- it was by pure accident of technology that, at one time, it could be made into a tangible product.

Why is iTunes so successful if music is intangible? Because Apple doesn't see iTunes content as a bunch of SKU numbers. Instead, they see iTunes as providing a service -- the service of providing content to iPods and the iPhone.

As the influence of iTunes grows, I think Apple will continue to use their power in the music sales business to one day negotiate with the labels to start offering a subscription model where consumers either get to download as many tracks as they like for a monthly or annual subscription or, perhaps some form of metered subscription where instead of these invididual prices per song, a flat rate gets you so many megabytes worth of music downloads or something like that.

Middlemen layering (-1)

TheMeuge (645043) | more than 5 years ago | (#26727883)

And as Apple's influence in the music market grows, what is going to happen is that now we're going to have 2 layers of middlemen between us and the artists, as opposed to one... which is necessarily going to cause a reduction in service and an increase in prices, with no benefit for anyone other than the middlemen.

This is one of the chief causes of our economic disaster, as applied to the banking industry, which is now essentially toppling over due to its own weight. This middlemen layering has been very concisely described by Warren Buffett in his 2005 letter to Berkshire stockholders... where he argued that the proliferation of trading volume would cause larger and larger percentages of overall yields to go to the middlemen, until such a time when business owners and shareholders started to receive such small returns that they would essentially be losing money to inflation on their investments.

Same scenario applies here.

Re:Middlemen layering (3, Interesting)

samkass (174571) | more than 5 years ago | (#26728157)

Actually, I see the opposite being true. Previously it was just you against the record labels. The record labels always won. They could charge $15 for a CD that cost them $1 to print and $5 to create, market, and manage. Then Apple came along. Apple is not in the music business, they're in the *iPod* business which relies on the music business. So they bundle a cheap music store with their iPods and it becomes the #1 way everyone in the US gets all their music. Now you have Apple negotiating on your behalf for lower prices, and it's Apple vs. the record labels-- a much more even match. So prices come down.

If Apple's dominance in music distribution is ever broken, expect prices to double or triple as you'll have no one with any power negotiating on your behalf anymore.

Re:Middlemen layering (1)

cowscows (103644) | more than 5 years ago | (#26728667)

Maybe, except that the minimal cost of digital distribution has started to allow bands to make their music available without the help of a major label. Both no-name and big famous bands are experimenting and starting to be successful doing it all on their own. While there will still be some space for larger labels to operate, their monopoly on the mass-production of music has been cracked by technology, and will continue to erode away.

If Apple loses leverage and the major labels try to jack up prices two or three times, Three basic groups of music consumers will emerge. One group will shrug their shoulders and just pay extra (but not as many as the labels would like). The second group will look to smaller/indie labels for cheaper music, and thanks to the internet they'll be able to find them with increasing ease. And the third group will go back to downloading off of whatever kazaa/limewire type software is popular at that time.

Especially with the economy cratering the way it is right now, raising prices is a really good way to get your customers to look elsewhere. The only reason the music companies could get away with it in the past is that recorded music was nowhere else to be found. Now it's digital and it's everywhere. Yay.

Re:Middlemen layering (0)

bidule (173941) | more than 5 years ago | (#26728281)

And as Apple's influence in the music market grows, what is going to happen is that now we're going to have 2 layers of middlemen between us and the artists, as opposed to one... which is necessarily going to cause a reduction in service and an increase in prices, with no benefit for anyone other than the middlemen.

This is weird, I thought that retail and distribution were middlemen.

Since we'd go from 3 to 2 layers, any reduction/increase cannot be explained by your theory but must be because this is what the market will bear. So, our hope goes for independent labels to do better than the majors and push the market down. And since you don't have to buy shelf space, the odds are in our favor.

Re:Megs of music!? (1)

TaoPhoenix (980487) | more than 5 years ago | (#26728243)

That would be funny, because right now there is no reason not to push the quality through the roof. But because I dabble with dinosaur mp3 players as a hobby, you can fit a lot more music at 80kbs-rate (spelling off) in 256 megs than 192 kbs-rate.

That might interact with the world of bandwidth caps on the isp side too.

Re:No Pity/Sucks to be them. (0)

shmlco (594907) | more than 5 years ago | (#26729233)

"...it was by pure accident of technology that, at one time, it could be made into a tangible product."

Not counting player pianos and other "recorded" musical reproductions that go back as far as the 9th century, the gramophone disc was introduced in 1889, over a century ago. Music has been available as a tangible product for over a century now.

And that's hardly an accident.

Re:No Pity/Sucks to be them. (1)

morgan_greywolf (835522) | more than 5 years ago | (#26729623)

the gramophone disc was introduced in 1889, over a century ago. Music has been available as a tangible product for over a century now.

But that technology is being replaced. And the new technology that replaces it treats it as an intangible product.

Re:No Pity/Sucks to be them. (4, Insightful)

Andy Dodd (701) | more than 5 years ago | (#26727905)

I was just thinking this - a lot of the article focused on how the music industry doesn't like Apple's dominance in the market. Then the article implies that they feel that removal of DRM *strengthens* this dominance.

As you say, idiots... DRM is the major impediment to other music vendors succeeding, and probably the #1 contributor to the failure of many competitors to iTunes. Like it or not, Apple dominates the portable audio player industry, so if what you sell doesn't play on an iPod, you're toast. There is NOTHING preventing people from selling music that plays on the iPod, UNLESS you want DRM - then you're stuck with Apple.

No DRM, no Apple control. Music vendors can potentially compete with Apple if they don't have DRM, and similarly audio player vendors can compete with Apple if the music isn't DRMed. (Although very few non-Apple players support AAC, even unencrypted AAC, there's no barrier to that changing.)

Re:No Pity/Sucks to be them. (1)

cyber-vandal (148830) | more than 5 years ago | (#26728449)

You still need copyright holders' approval to sell the music, something that Apple can potentially interfere with.

Re:No Pity/Sucks to be them. (1)

99BottlesOfBeerInMyF (813746) | more than 5 years ago | (#26728629)

If the online music business were a bunch of generic outfits selling MP3s(or generic AAC) then the relationship between the labels and the retailers would be a lot more like the brick and mortar one.

With brick and mortar, the RIAA screwed up and Walmart became such a large retail outlet they gained significant ability to push back and negotiate with the RIAA. The RIAA's attempts to give Amazon better terms than Apple and crazy (probably illegal) clauses in their contracts were an attempt to keep Apple from doing it online.

Dependency and Apple (0)

noundi (1044080) | more than 5 years ago | (#26727317)

According to TFA the music industry are now depended on Apples iTunes Store due to the major revenue. How come none of the labels have launched a similair service (it's not really the most original idea of all times)? I doubt they're lacking funds. If the itch is too annoying, why are they entangling themselves into more dependency? I it's not like it gets easier to detach from iTunes Store with time. I don't know, but to me it seems that everybody that touches Apple becomes stuck to it in some way or the other. Sure it's great for business, if your name is Apple. For everyone else: please bend over and cough.

Re:Dependency and Apple (4, Interesting)

DrLang21 (900992) | more than 5 years ago | (#26727471)

It takes a lot of time to develop an application as usable and stable as iTunes. So unless the labels formed a coalition to develop a strong competitor in top secret conditions, they would constantly be in fear of being removed from the iTunes store in the meanwhile. Not to mention that any competitor coming to the market right now would have to compete with a serious branding problem. Everyone knows iTunes and subconsciously accept it as the only option. Any new outlet would need to be able to offer something compelling that iTunes doesn't or better yet, can't.

Re:Dependency and Apple (1)

jedidiah (1196) | more than 5 years ago | (#26727817)

...except the labels don't need to. They can leave the
management of MP3 devices to someone else. All they need
now or ever needed really was an effective ecommerce site.

They don't need to "control the experience" like Apple.

Even Apple doesn't even really need it.

Re:Dependency and Apple (2, Insightful)

DrLang21 (900992) | more than 5 years ago | (#26728081)

The experience (convenience) is what Apple sells most. I'm not saying that they need to manage mp3 devices, but they will need a model that offers something starkly compelling that Apple doesn't. Amazon offered DRM free music when Apple didn't, but it was more expensive and somewhat clunky. Now the prices are comparable, but Amazon is still clunky. So why use Amazon when iTunes is more convenient? A 10 cent price difference on Amazon will not lure people away from convenience. At this point, any serious competitor to iTunes will need to interface with iTunes at least in some minimal way to prevent people from turning away because of being inconvenienced. That could be something as simple as automatically adding songs to a user's iTunes playlist when you download them.

Re:Dependency and Apple (0)

Anonymous Coward | more than 5 years ago | (#26728071)

It takes a lot of time to develop an application as usable and stable as iTunes.

That is so ludicrous that I don't know where to begin. Your computer already has networking software that will let you download a file, and it is likely very well debugged. There's an abundance of players, too, and most of them (yes, this is subjective) work better than iTunes. And if the last statement seems like flamebait, then ok: many players work perfectly well (even if you as a user happen to prefer iTunes).

Sell wavs or mp3s (and flacs and vorbis for the nerds) through an old fashioned traditional shopping-cart store, and you have an instant market that doesn't cost you anything in R&D. Any random webmonkey can have something for you with a single day's labor.

Re:Dependency and Apple (3, Insightful)

DrLang21 (900992) | more than 5 years ago | (#26728167)

Sell wavs or mp3s (and flacs and vorbis for the nerds) through an old fashioned traditional shopping-cart store, and you have an instant market that doesn't cost you anything in R&D. Any random webmonkey can have something for you with a single day's labor.

Amazon already did this, and they are nowhere near being a serious competitor to the iTunes music store despite being the #2 source for purchasing electronic music. Several others have pointed this out, but I'll reiterate it here. iTunes doesn't just sell music. Their business is selling a convenient service. You buy music, it's automatically downloaded to your playlist, and you can add it to your iPod (the market dominating mp3 player) all in one program with a fairly intuitive user interface.

Re:Dependency and Apple (1, Informative)

Anonymous Coward | more than 5 years ago | (#26728683)

Or a similarly-featured open source program that is dedicated to interfacing to many different music sales sites could show up on the scene...

www.getsongbird.com

Re:Dependency and Apple (2, Insightful)

ahankinson (1249646) | more than 5 years ago | (#26728205)

And this, friends, is why Apple's the player to beat and everyone else can't figure out why.

Yes, if you wanted to do it the clunky way of navigate to website / browse / shopping-cart / checkout / download / copy to player / copy to portable - that can be done without much work.

However, for the rest of the people who *don't want to* or *can't* do that, Apple's packaged it up nicely. You don't go to your browser to buy music - you go to your music player. You don't manage files on your portable through your computer, you manage it through your music player. You can sync your playlists, drag-and-drop music from one playlist to another, all within iTunes. See a theme here?

So good luck with that music website. There are thousands more like it, all with as little impact as yours would have. But Apple's still going to beat you because they know what people want, and you don't.

Re:Dependency and Apple (1)

UnknowingFool (672806) | more than 5 years ago | (#26728247)

That is so ludicrous that I don't know where to begin.

There's a difference between fit and polish. Anyone could write the application. MS with it's billions of dollars is already on revision 3 of the Zune software. It's almost the same functionality and stability as iTunes. Many others have tried. And failed.

Sell wavs or mp3s (and flacs and vorbis for the nerds) through an old fashioned traditional shopping-cart store, and you have an instant market that doesn't cost you anything in R&D. Any random webmonkey can have something for you with a single day's labor.

Here's what you didn't understand: You need permission from the RIAA to sell songs. They are never going to grant you permission to use non-DRM'ed music. They only gave permission to Amazon to fight Apple and only grudgingly to Apple because they need Apple.

Re:Dependency and Apple (1)

Dorkmaster Flek (1013045) | more than 5 years ago | (#26728221)

It takes a lot of time to develop an application as usable and stable as iTunes.

If you're talking about the music store, yes. If you're talking about the PC application, I'm going to have to turn my head to the side and shoot my green tea out my nose. At least on a Windows box, my experience with iTunes has been forcefully installing Quicktime and hogging system resources like a bloated bitch.

Re:Dependency and Apple (0)

mdielmann (514750) | more than 5 years ago | (#26728591)

At least on a Windows box, my experience with iTunes has been forcefully installing Quicktime and hogging system resources like a bloated bitch.

MS should sue for IP infringement.
And yes, I was glad when I finally found a decent quicktime video player that wasn't QuickTime.

All software sucks. (1)

argent (18001) | more than 5 years ago | (#26728935)

If you're talking about the music store, yes. If you're talking about the PC application, I'm going to have to turn my head to the side and shoot my green tea out my nose.

I don't want to know about your fetishes.

I've used music players on Windows and *nix, commercial and free, and all of them suck dirty swamp water through moldy sweat socks. iTunes sucks less than most. It could be that there's one or two that suck less than iTunes, but it's near the top of the smelly heap.

* Skinned user interfaces. No. Hell no. Any application that doesn't at least TRY to stick to the native user interface is right off my short list.

* WinAmp, derivitives, and clones. Ugh. Just... ugh.

* Windows Media Player, Realplayer, other applications based on the Windows HTML control. No thanks, I'd rather run through the hot ward at a plague hospital snogging the ebola patients.

All software sucks. Music player software sucks more than most. iTunes works, it's got some nice features, you can rip the Quicktime out of the OS. In this market, I count that as a win. Maybe my standards are low, but I've earned those low standards in the trenches.

Re:Dependency and Apple (4, Insightful)

tlhIngan (30335) | more than 5 years ago | (#26727529)

According to TFA the music industry are now depended on Apples iTunes Store due to the major revenue. How come none of the labels have launched a similair service (it's not really the most original idea of all times)? I doubt they're lacking funds. If the itch is too annoying, why are they entangling themselves into more dependency? I it's not like it gets easier to detach from iTunes Store with time. I don't know, but to me it seems that everybody that touches Apple becomes stuck to it in some way or the other. Sure it's great for business, if your name is Apple. For everyone else: please bend over and cough.

That's because the music industry demanded DRM. And guess what, they did try to open their own music store. But, like all music stores, they failed for one simple reason - there was no way people would buy music if they couldn't load it on their device. And the device that most people had? iPods. Whose DRM was proprietary to Apple. Which meant they could take a piece out of the non-iPods out there (along with the millions other stores), but that's it.

The last gasp at trying to break into the iPod (and to get Apple to bend over to the music labels, rather than the labels bending over to Apple) was Amazon. Alas, while Amazon is popular (and #2), it still didn't hold a candle to iTunes' popularity. And Jobs knows that since the music industry was already wavering on DRM, now would be the time to also make iTunes DRM-free (Amazon is DRM-free, so iTunes should be able to demand same).

This is an industry where a very limited customer base was considered a Good Thing(tm). Yes, Jobs went to the music labels, and promoted the limited marketshare of Mac users as a benefit in the experiment of selling music online.

Re:Dependency and Apple (1)

DrgnDancer (137700) | more than 5 years ago | (#26729001)

Apple isn't that unreasonable about outside services working on iTunes and iPods. At a minimum I know that Audible.com has a tie in to Apple's i* DRM, you can activate iTunes and iPods to play their books. Surely the music industry could have worked something similar out (especially early on, before iTunes itself became a Juggernaut.)

Re:Dependency and Apple (3, Insightful)

argent (18001) | more than 5 years ago | (#26727571)

How come none of the labels have launched a similair service (it's not really the most original idea of all times)?

You mean like the Sony Music Store?

What, you never heard of it? Perhaps that's because Sony's been systematically alienating their customers since the Walkman/Discman era?

It's a matter of trustworthiness! (1)

bornagainpenguin (1209106) | more than 5 years ago | (#26727649)

According to TFA the music industry are now depended on Apples iTunes Store due to the major revenue. How come none of the labels have launched a similair service (it's not really the most original idea of all times)?

Simple--they have tried to do so in the past; between their propensity towards suing everyone they work with and their addiction to (failing) DRM no one wants anything to do with them any more.

Sure there are reasons to dislike Apple but their stance on DRM is refreshing and has not changed significantly over time, making their iTunes Music Store less of a risk than any 'hear today, gone tomororw' outfit the RIAA can throw up overnight. Moreover their partner in rhymes (Microsoft) got greedy and did the rest of us a favor by underlining just how risky it is to buy music that 'Plays for Sure' and eliminated any other major players from moving in.

Not to say that the iTunes Music Store is the only (no DRM) mp3 store around, I know they aren't and there are certainly a couple of good ones well worth doing business with--but who has heard of them besides us geeks and Linux users?

--bornagainpenguin

Re:Dependency and Apple (1)

UnknowingFool (672806) | more than 5 years ago | (#26727665)

They've tried and failed with Napster, PlaysForSure, etc. The problem was that they didn't have the technical prowess to set up a seamless integrated operation. They don't have the facilities to understand websites, hardware etc. It took Apple who was willing to do it all before online music was a success.

Also the demands of DRM and tight control doomed most of the implementations because they want the consumer to pay for a copy for every device or rent music. They even fought against the idea MP3 players with their lawsuit against Rio [harvard.edu] . The subscriptions may generate lot of money for them, not that it's good for the consumer or what they wanted. Also they wanted subsidies from every device maker.

I it's not like it gets easier to detach from iTunes Store with time.

Are you kidding? With all music now DRM free from Apple, I can completely uncouple from iTunes. I might have 10 songs I need to upgrade to DRM free. Heck, I can use Amazon now. The reason I still use iTunes is that it's freakin' convenient.

Re:Dependency and Apple (1)

cowscows (103644) | more than 5 years ago | (#26727697)

There's two big reasons why.

First off, creating a good online music store is hard. Lots of people have tried already, and very few have been successful. Just because the labels have access to lots of songs doesn't mean that they know how to create an online storefront and run the backend system that it would require. Sure, they can try to hire someone else to do it, but there aren't too many people out there with an established track record for this sort of thing for them to pick from.

Second, Apple's got the iPod, it's got the cool factor, and the labels have none of that. Nobody cares which label a song comes from. The star power comes from the artist, not from the distributor. A store run by the labels would get little attention, and would have to prove itself useful in every way from the very beginning, because nobody would give them the benefit of the doubt on anything.

Software is not their core competency (1)

SuperKendall (25149) | more than 5 years ago | (#26727719)

How come none of the labels have launched a similair service (it's not really the most original idea of all times)?

As others have noted they have tried.

The reason they will never succeed, is because they are not software companies and never will be - nor should they be. They exist to edit artists down to ones that will probably be popular, and market them.

Even when they partner with companies that are software companies, the fact they are the ones driving requirements means the results will always suck, and consumers will shun them compared to better ways to get music (like iTunes currently).

Something may eventually topple iTunes, but it will not come from the music industry.

Re:Dependency and Apple (0)

Anonymous Coward | more than 5 years ago | (#26727873)

How come none of the labels have launched a similair service (it's not really the most original idea of all times)?

Because they wanted DRM, but DRM keeps people from being able to play the music unless they have very special hardware. You have to tie your market to either a specific hardware manufacturer (e.g. Apple), or get all the major hardware manufacturers to be part of some kind of consortium (like the MPAA companies did, with DVD and Blu-ray, HDCP, etc).

They are having a harder time with music than the movie guys did, because

  • people have greater interoperability expectations with music (they want stuff to "just work" whereas movie watchers are apparently ok with stuff not working, e.g. if the movie isn't high-def on their non-HDCP TV, they buy a new TV instead of complaining that they were sold a defective movie)
  • The RIAA members, all combined, have much smaller marketshare in the music business than the MPAA has in the movie business. They as easily bully manufacturers into complying with their [non]standards, because most labels (who aren't RIAA members) are ok with lack of DRM, so manufacturers who don't implement DRM will still have plenty of customers who can play plenty of music without hardly ever noticing RIAA's absence.

Open Season. (3, Insightful)

Ostracus (1354233) | more than 5 years ago | (#26727413)

"And apparently the iTunes homepage is a huge hit making device. "

This is part of what an iphone "killer" has to overcome (I'm looking at you Palm).

Re:Open Season. (1)

Fahrvergnuugen (700293) | more than 5 years ago | (#26727537)

Exactly. There won't be an iPhone / iPod killer until someone comes up with an iTunes killer to go with it.

Re:Open Season. (1)

CorporateSuit (1319461) | more than 5 years ago | (#26727601)

"And apparently the iTunes homepage is a huge hit making device. "

This is part of what an iphone "killer" has to overcome (I'm looking at you Palm).

iThugs?

Or are you talking about a different type of hit?

Palm doesn't have to overcome it at all (2, Informative)

SuperKendall (25149) | more than 5 years ago | (#26727669)

This is part of what an iphone "killer" has to overcome (I'm looking at you Palm).

But with iTunes songs being DRM free now, Palm doesn't have to build their own iTunes - they just have to be able to feed songs into their own device from the users iTunes library, and support AAC (an open audio format).

They could even list all songs and ones that are still locked down could take you to the Apple iTunes Plus page to unlock (which you can happily do on a song by song basis now).

Re:Palm doesn't have to overcome it at all (1)

UnknowingFool (672806) | more than 5 years ago | (#26727787)

Well that premise is based on the assumption that iPod users only buy from iTunes because they are locked to it. Remember people are free to rip their own CDs and since Amazon sells DRM-free songs, people don't necessarily have to buy from iTunes to get music. Some people buy from iTunes because it's just too convenient. The one thing the Palm has to do is setup an application store like iTunes in order to be successful since the two devices uses different code.

Re:Palm doesn't have to overcome it at all (1)

zippthorne (748122) | more than 5 years ago | (#26728341)

Well, that's a good point, but if the iTunes music store is stifling new entrants into the cell phone market, then Apple will have to start worrying about monopoly rulings.

Perhaps they've learned from Bill Gates, though, and they've taken out a sizable insurance policy in the form of loose pursed lobbyists.

Re:Palm doesn't have to overcome it at all (3, Interesting)

UnknowingFool (672806) | more than 5 years ago | (#26728545)

From what I understand, what Apple tried to do is secure the rights to distribute via cell phone data networks. Currently you can get your music onto the iPhone/iPod using your computer. What they got permission to do was allow iPhone users to get music onto their phone without having to connect to a computer. Having a deal here doesn't open them up to monopoly or anti-trust rulings as long as they didn't prevent other cell phone makers from doing the same thing.

My Verizon phone has long had the ability to get music from the network that but the music was tied to my phone and expensive. Now that iTunes is DRM free, nothing prevents me from playing those songs or Amazon's DRM free MP3s on my Verizon phone . . . except that Verizon has crippled my phone not to do so.

The music industry is funny (5, Insightful)

tkrotchko (124118) | more than 5 years ago | (#26727823)

The gripe that they effectively created MTV, they gripe that the revived Apple.

If I was a large shareholder, I'd fire the lot of these guys. Because either one of the two is true:

1) They're lying as an excuse for their failures
2) They have all this business opportunities that create entire new industries, but they can't get it done themselves, effectively giving up 10's of Billions of dollars.

I wouldn't want those guys working for me, that's for sure.

Empty-Vee?? (1)

bornagainpenguin (1209106) | more than 5 years ago | (#26727889)

Empty-Vee?? What's that?

I only get references to something called music television when I google it; but clicking on it on the television only gets me some stupid Reality TV show or some documentary about the 80's...

--bornagainpenuin

Re:The music industry is funny (2, Interesting)

UnknowingFool (672806) | more than 5 years ago | (#26728113)

The gripe that they effectively created MTV, they gripe that the revived Apple.

Except that would be revisionist history interpreted to make the industry more forward thinking than they were. I don't know the full history of MTV but the history of the iTunes store is well documented. Apple went to the record company with a plan. Apple wanted to sell more iPods; They realized that if they made it easy for their customers to get music online, they could use that as a selling feature. They were thrown out. But Apple made key predictions about the efforts (and failures) of the industry in online music. Finally, the industry relented.

Now that Apple is a juggernaut because of its own efforts, the industry wants to take more credit than they deserve. Not only is Apple the #1 retailer, Apple now has an influence over the popularity of individual artists. Before Wal-mart and other retailers just sold music. The industry controlled popularity with radio stations, hype, marketing, etc. Now all Apple has to do to make an artist popular is make them the free single of the week.

Further proof that Apple killed (music) DRM (4, Insightful)

SuperKendall (25149) | more than 5 years ago | (#26727863)

DRM creates a natural grouping of power, and we are all lucky that Apple chose to use the power of distribution that eventually accumulated to them due to the use of Apple DRM, to try and break DRM.

The article makes an excellent point at the end:

"Mr. Card of Forrester, however, has a different take. "If it weren't for Apple, God knows how bad the music industry would be," he said."

Even though the music industry had to be dragged kicking and streaming, Apple saved them - the 1.5 billion in revenue Apple generated for the music industry last year would probably mostly have been simply gone, replaced by downloading for the most part rather than album sales.

Now if only they could do the same for video... I don't think Apple has the same leverage there though, as is evidenced by wacky policies around TV and movies in the iTunes store (like season passes for some TV shows costing more than buying each episode individually). I'm not even sure they have the same drive to try and get rid of the DRM they did with music. I don't know if that industry can be saved as easily.

Re:Further proof that Apple killed (music) DRM (1)

geekoid (135745) | more than 5 years ago | (#26728489)

I disagree.

The industry would ahve seen the light sooner or later, even if it was out of desperation.

Apple had the advantage of being a technical company that knows that any software can be circumvented..it's the nature of software.

In fact, if the industry wasn't already in a panic when Jobs went to them, iTunes wouldn't exist now.
So some credit does go to the industry for seeing the need for online distribution and recognizing it's better to let someone who knows WTF they are doing handle the digital distribution.

Re:Further proof that Apple killed (music) DRM (1)

99BottlesOfBeerInMyF (813746) | more than 5 years ago | (#26728853)

I disagree. The industry would ahve seen the light sooner or later, even if it was out of desperation.

Actually, by the time the industry saw the light it would have been too late. They would have blindly walked into MS proprietary DRM and would be positioned against another abusive trust, but one with a history of abusing their way into new markets with alacrity.

Right now the RIAA has to walk away from DRM or the iPod listening market or capitulate to Apple on some matters. Without Apple, they'd be looking at walking away from users of all portable players and computers and the Xbox or capitulate to MS and MS is a lot more likely and in a better position to split or undermine their trust.

Re:Further proof that Apple killed (music) DRM (1)

cowscows (103644) | more than 5 years ago | (#26728871)

Meh, they only realized that they couldn't deal with themselves after they repeatedly shot themselves in the foot trying to make the issue go away. Napster was the big thing years before iTMS came on the scene. And even before that people were writing about how things were changing. The music industry should've seen this coming a million miles away, and should have had a better strategy from the beginning. They should have expected a napster to appear one day and had a plan to compete with it.

Instead they were taken completely by surprise, and reacted with denial followed by lawsuits. It wasn't until the reality had stared them in the face and then run them over that they accepted what was happening. I guess better late than never, but it's hard to congratulate the supposed experts for noticing what everyone else noticed years earlier.

Re:Further proof that Apple killed (music) DRM (3, Insightful)

99BottlesOfBeerInMyF (813746) | more than 5 years ago | (#26728741)

I'm not even sure they have the same drive to try and get rid of the DRM they did with music. I don't know if that industry can be saved as easily.

There is a significant difference between the use cases and hence usability of DRM in the two industries. With music, almost everyone wants to keep it forever and listen to it many times over many years. Getting people to agree to rent music would require huge discount prices, likely just minimal advertising with free songs.

With video, most people only want to watch it once, or maybe once and then a second time years later (with some exceptions). DRM that prevents it from playing on different devices over time or making it hard to move, does not create as significant of a usability problem or bother most users. It is less of an issue for companies like Apple so they have less incentive to fight it.

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