Once upon a time, the music labels were the kings of content. They were able to get away with just about anything.
So were publishers of the written word. But more on that later.
Then came Apple and those meddling kids: iPod. iPod Shuffle. iPhone. iPod Touch. And their dog: iTunes. They were so popular that the music labels couldn’t afford not to let iTunes and the gang distribute their music.
The recording companies played along, made nice (after a fashion) and toed the line. They waited.
Then came Amazon’s Kindle. Oh — and Apple’s iPad.
Again: More on that later.
Over the past few weeks, a revolution has been taking place in the world of downloadable content, the digital devices that carry it — and the prices we pay for it.
This conflict had been brewing for a while, but the first shot was fired Jan. 27 when Apple unveiled its iPad and, along with it, a sales platform for electronic books much like iTunes, its online music store. The next shot rang out just three days later, when books — physical and digital — from the publishing house Macmillan started disappearing from Amazon.com’s virtual shelves. These were no small-potatoes titles, including former presidential candidate John Edwards aide Andrew Young’s “The Politician” and Elie Wiesel’s holocaust tale “Night.” Macmillan is one of the world’s largest English-language publishers and includes among its divisions sci-fi publisher Tor and the titanic St. Martin’s Press.
Macmillan had been pressuring Amazon to abandon its $9.99 format for best-sellers in e-book format in favor of something called the “agency model,” which basically means the content developer sets the price, as with applications for Apple’s devices. The publisher had their eye on something more like $12.99 to $14.99 — for starters. Amazon, intent on keeping prices down as an advantage against its monochrome Kindle’s more colorful competitors, wanted to stick with $9.99.
Amazon was forced to capitulate to Macmillan’s demands in the end, and only recently has the publisher’s content been relisted in the e-tailer’s inventory — and the e-books took longest of all, for some reason.
Apple’s long-awaited unveiling of the tablet computer called the iPad — as underwhelming as many observers say it was, comparing it to nothing more than a larger version of the iPod Touch — sucked all the air out of the room.
So, what does all this have to do with music recording companies? They’ve been looking for a fulcrum that will help them reposition themselves at the top of the content food chain. This week, the head of Warner Music, even as his company posted a net first-quarter loss with a small gain in digital revenue failing to make up for dying CD sales, expressed optimism that the recent fight over e-book pricing would give he and his ilk more power over content prices.
“I think what this signals is that content is going to have more pricing flexibility over time rather than less, because frankly, the only thing that drives iPhones, iPads, Kindles, Zunes and other kinds of devices is content,” CEO Edgar Bronfman Jr. said, it was reported in the Associated Press. “I think the power of content in that little fracas with Amazon was clearly evident.”
Warner is one of the music groups that haggled with Apple over its longtime fixed price of 99 cents per song, finally getting the i-Everything company to agree last spring to a range of prices from 69 cents to $1.29.
So Apple, once smiled at through gritted teeth by these music executives, may end up being their best friend and ally after all. And the printed word may have proven itself not entirely useless to them.
Happily ever after?
