eMusic Promises Lawsuits If Apple Offers “Unlimited”
IS EMUSIC THE BEST COMPANY TO LEAD THE COUNTERATTACK?
Apple is in discussions to offer unlimited access to iTunes with the purchase of a premium iPod or other device. Apple is reportedly promising labels a $20 one time payment for every unit sold. A similar "Comes With Music" plan by Nokia reportedly offers labels $80.
But if Apple’s controversial plan goes forward, eMusic CEO David Packman is promising a nasty lawsuit. "They’re basically saying, let’s give a piece of every iPod sale to the record labels in exchange for bundling in all the music you can eat with every iPod," says Pakman. "That’s classic Sherman Antitrust Act behavior. It’s called tying, and it’s where a company with a monopoly position in one market uses that monopoly position unfairly to compete in another."
LA antitrust lawyer Maxwell Blecher agrees that Apple could face legal challenges if others are prevented from distributing songs on a "new" iPod. "Apple is going to argue that they compete with lots of other similar devices," Blecher said. "You have to look at whether there are exclusionary aspects or conduct. In that debate lays the outcome of any lawsuit."
COMMENTARY
While Packman is correct that the proposal is another attempt by Apple to close its eco-system, it IS ironic that the CEO of eMusic would be the first to promise a legal challenge. After all, another effect of Apple’s plan would be drastically lower payouts to labels and artists and eMusic has usually led the charge for lower prices. In fact, the typical eMusic transaction nets payouts of around 30 cents to labels; less than half that paid by iTunes.
More: Listening Post, cNet
Read Hypebot’s commentary on other reasons that "Apple’s All You Can Eat Is Bad For The Music Industry" and join the discussion here.
I was kind of wondering who would be the first to jump on this. Agreed, I think Packman is a weird choice, but, to be fair, if this happened I’d probably cancel both my eMusic accounts, as iTunes has maybe 70% of what I download from eMusic.
Sounds to me like Pakman was saying the deal would be a violation of antitrust laws, in which case the Deparment of Justice, not eMusic, would investigate or file charges. Remember that the DOJ has reportedly started to look into UMG’s Total Music plan.
eMusic would fault Apple for offering this only because it would be competition for them.
This is nothing like the monopolistic tactics Microsoft uses. No body cared about that, they skated. So now they thing DOJ would sue over some song contract (completely legal BTW).
eMusic caters to nerds with Creative, Microsoft, etc… Nerd players, not iPod users. Apple wouldn’t effect them that much, eMusic would be looking to cash in on Apple’s success as they have had very little of their own.
Beg to differ with Rick’s anti-eMusic comment — a large portion of my iTunes library comes from eMusic, including lots iTunes doesn’t carry. New eMusic Remote interface works well. As for the larger issue, there’s no reason not to avoid buying a new premium iPod while this works itslef out, which could take a while.