News
Vivendi labels Apple’s contact terms ‘indecent’
By Charles Starrett
Senior Editor, iLounge
Published: Monday, September 24, 2007
News Category: iTunes
Speaking at a media gathering in France, Vivendi Chief Executive Jean-Bernard Levy called the terms of Apple’s iTunes Store contract “indecent,” claiming that the iPod maker’s share of iTunes sales is too large. “The split between Apple and (music) producers is indecent ... Our contracts give too good a share to Apple,” Levy said. He also called for variable pricing, stating “We should have a differentiated price system.” In July, Vivendi’s Universal Music Group announced that it would not renew its long-term iTunes contract, deciding instead to renew its music distribution contracts with Apple on a monthly basis.
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1
<frank>..and now, the end is near…!</frank>
Posted by ahMEmon in Canada on September 24, 2007 at 11:20 AM (PDT)
2
Apple has to start securing its content directly, instead of through these jokers.
If Starbucks can run a successful record label, then I’m damn sure Apple can.
Posted by Yashin on September 24, 2007 at 11:43 AM (PDT)
3
Not sure if the terms of Apple, Inc’s settlement with Apple Records will let them start a record company, Yashin….
But I agree, NBC/Universal just has it in for Apple…they are being nasty….Frankly, I hope it backfires on them…
Posted by Cameron Talley on September 24, 2007 at 11:47 AM (PDT)
4
Hmmmm… one more reason not to buy any content from NBC/Universal anymore for the near future. There are other ways to see or hear their content for free.
Posted by aidler on September 24, 2007 at 12:13 PM (PDT)
5
From an article I just read, it had this little tid bit:
“At present, UMG, the world’s largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.”
Um… .70 euro out of .99 is not enough for them? Are they for real?!
I guess they’re trying to offset their losses from the music industry by trying to get 100% of the retail price. What a load of B.S.
Posted by illegalattempt on September 24, 2007 at 12:45 PM (PDT)
6
I remember reading quite a while back on ilounge that Apple receives 33% of sales, the artist (i think actors too for tv shows) receive 33% for royalties and the labels receive 34%.
I also read that the iTunes music store barely breaks even as far as revenue and overhead… don’t know if I believe that though.
Posted by 3rdEye on September 24, 2007 at 12:58 PM (PDT)
7
Hahaha! So that leaves what? .29 euro or less for Apple? Where does the artist fit in?
Indecent for whom?
Posted by The Raven on September 24, 2007 at 1:28 PM (PDT)
8
Duh, it’s all about greed!
Posted by Joshdude on September 24, 2007 at 1:42 PM (PDT)
9
I’m sure Apple pockets no more than 5 cents per dollar on music sold in its store.
Posted by Galley in Greenville, SC on September 24, 2007 at 1:51 PM (PDT)
10
I don’t care how much apple pockets, or how much vivendi pockets.
Each of them wants to pay less and get more. As do you and I.
How is this news?
Posted by OnlyShawn on September 24, 2007 at 1:54 PM (PDT)
11
Boy… Vivendi is really looking to bring back piracy with a vengeance!
Posted by Frank Z on September 24, 2007 at 5:50 PM (PDT)
12
Cameron, under the Februray settlement (from Wikipedia): ‘Apple Inc. will own all of the trademarks related to “Apple” and will license certain of those trademarks back to Apple Corps for their continued use.’
Presumably, this would free Apple Inc up to become a content producer and distributor under the same name. Although for some reason, they seem reluctant to do it.
The problem the music labels have is that they’re still split between the business of selling physical product and digital product. The former is still the dominant delivery method, but it requires pressing plants, warehouses and transport.
Digital distribution has no inventory, and therefore has relatively small running costs. The labels use their slice of the digital distribution cake to offset the lower margins of the CD business. Apple doesn’t, instead it sees the music business as only digital distribution, with no physical inventory, and therefore low operating costs.
The industry clearly resents this and thinks it can operate its own digital distribution services. Labels could pull their content from the iTMS, but without FairPlay, they’d struggle to sell tracks to consumers who play this stuff overwhelmingly on their iPods.
Unless they abandon DRM (yeah, right).
Posted by Yashin on September 25, 2007 at 2:34 AM (PDT)