Singing a Different Tune
Thursday, November 20, 2003
For a company who has never really had more to its name than a cool patented shade of silver and a sleek, single-button mouse, Apple may have just given itself purpose with its newest software application.
Apple’s foray into the online music business, iTunes has all but silenced critics in the Recording Industry Association of America (RIAA) whose whining mantra “we can’t compete with free” has prompted them to level mass lawsuits against the young people in this country who use file-sharing programs—the underlying idea being if they sue their ex-customers, these people will happily come back to CDs.
Since releasing the Windows version of the software last month, Apple’s sales have skyrocketed into the tens of millions, making Apple what CEO Steve Jobs called “the Microsoft of music stores.”
It’s a little known secret that Apple barely makes money off iTunes, despite the software’s popularity—nearly all revenues still go toward the copyright holders: the music labels.
By luring people in with the free iTunes, Apple put itself in a position to sell them its popular iPod mp3 player which is uniquely compatible with the iTunes software and is selling like hot cakes. Each $499 iPod brings in $175 in profit.
Such a scheme effectively leaves other online music traders in the dust since they can’t hope to make a profit from just selling the music. Even Microsoft, who announced this week its intentions to enter the online music fray, faces a tough time. It’s even conceivable that artists may start selling straight through iTunes, cutting out the music labels altogether.
Although I do credit Apple for their cleverness in this venture, their timing deserves the most credit.
It’s no secret that there’s a lot of bad blood between music labels and their coveted demographic—college students.
After gutting Napster and steadily burying its successors, the RIAA proceeded to sue the file sharers themselves, most of whom inhabit dorms across the country.
Although barely denting the file-sharing business itself, the RIAA has succeeded in earning an incredible amount of bad PR—the kind an organization can only get from suing a 12-year-old girl for thousands and forcing college students to empty out their savings accounts in settlements.
In their own defense, the RIAA could only emphasize to an unsympathetic public that they were targeting thieves who stole mercilessly from the pockets of struggling artists through casual downloading from software like Kazaa.
There are probably many reasons this generally law-abiding populace did not lend a sympathetic ear to the hardships of the RIAA whose profits only began to plummet during the depths of the economic downturn in 2001.
The recording industry makes a difficult case when it tries to portray kids downloading mp3s as stealing from the pockets of artists, when it’s a well-known fact that most all profits go to the music labels themselves, not the artists.
Even more difficult, the RIAA has to fight off a “Robin Hood” notion of file-sharing that comes from knowing the labels themselves have already been convicted of robbing those they now accuse. A 2000 class action anti-trust lawsuit made the labels cough up $143 million in settlement for over five years of price fixing.
Given the light punishment, it would not be difficult to imagine file sharers exacting a kind of poetic justice. While this lacks a legal premise, I believe the answer is more fundamental.
College students don’t have a problem paying for music, as the success of iTunes demonstrates. But on the same note, nobody likes to know that they’re being ripped off. Whatever trust existed in an already rocky relationship between music labels and consumers surely vanished when news of inflated CD prices came out.
As the Internet developed into a rich medium to exchange newly digitized songs, the RIAA didn’t budge, fat and complacent in their pricing and methods. Enter Napster. File sharing became synonymous with the Internet, the newest social paradigm.
When the RIAA attacked file sharing, not only did it refuse to adapt to the new digital climate, it outright sought to cripple it and has since witnessed a backlash that has left a gash in their bleeding business model. People wanted convenience and fair pricing and the music labels would have no part of it.
iTunes is just salt in the wound.
Was free always better? E-mail david@dailycal.org.
AI
