Yesterday Apple beat expectations with a whopping 85% increase in sales in the second fiscal quarter powered in large part by increased iPod sales. The great news came only a day after federal 
investigtors signaled that a probe into stock backdating was essentially over leaving a few execs scarred but the mighty Steve Jobs unscathed.
These victories only strengthens Apple’s hand just as they sit down with major labels for a round of important renegotiations. Labels had hoped for concessions from Jobs including variable pricing and better track and product bundling. Some execs had even boasted that they were going to demand a royalty on iPod sales similar to one they receive from Zune. Now, none of what labels sought – or at least none that Jobs wasn’t planning anyway – is likely to happen according to sources. And why would Jobs give in when he controls an 80%
share of the digital music market?Apple is in such a strong position that he can publicly berate important content providers for not dropping DRM while in actuality doing little to drop copy protection from his own iTunes store. As Hypebot pointed out earlier this week; there are more than a million indie music tracks available for DRM downloads on other services today. Why doesn’t Jobs offer those tracks DRM free? (Two posts in our comments section of the earlier Apple article claim that iTunes is asking for tracks to be re-delivered DRM free at higher bit-rates hinting at a pending move. But we could not find a single provider who had been asked by Apple to also take the essential and time consuming step of revising their contracts to allow DRM free sales on
iTunes.) Jobs also sits on the board of Disney which controls Hollywood and Disney records. If he cared about a DRM free music world, those tracks could be unleashed in days.But Jobs and Apple don’t really want DRM free music. Unprotected tracks means that downloads bought at other stores would finally play on iPods; thus opening the closed iPod/iTunes loop which Jobs so masterfully created. With sales souring and record labels on their knees begging for help; why would Apple change course?
investigtors signaled that a probe into stock backdating was essentially over leaving a few execs scarred but the mighty Steve Jobs unscathed.
These victories only strengthens Apple’s hand just as they sit down with major labels for a round of important renegotiations. Labels had hoped for concessions from Jobs including variable pricing and better track and product bundling. Some execs had even boasted that they were going to demand a royalty on iPod sales similar to one they receive from Zune. Now, none of what labels sought – or at least none that Jobs wasn’t planning anyway – is likely to happen according to sources. And why would Jobs give in when he controls an 80%
share of the digital music market?Apple is in such a strong position that he can publicly berate important content providers for not dropping DRM while in actuality doing little to drop copy protection from his own iTunes store. As Hypebot pointed out earlier this week; there are more than a million indie music tracks available for DRM downloads on other services today. Why doesn’t Jobs offer those tracks DRM free? (Two posts in our comments section of the earlier Apple article claim that iTunes is asking for tracks to be re-delivered DRM free at higher bit-rates hinting at a pending move. But we could not find a single provider who had been asked by Apple to also take the essential and time consuming step of revising their contracts to allow DRM free sales on
iTunes.) Jobs also sits on the board of Disney which controls Hollywood and Disney records. If he cared about a DRM free music world, those tracks could be unleashed in days.But Jobs and Apple don’t really want DRM free music. Unprotected tracks means that downloads bought at other stores would finally play on iPods; thus opening the closed iPod/iTunes loop which Jobs so masterfully created. With sales souring and record labels on their knees begging for help; why would Apple change course?
