NYT: Apple Wants More Mobile Music From Labels
May 20, 2008 at 5:40 AM (PT)
As part of APPLE’s efforts to improve on the shortcomings of its popular iPHONE, the company has approached some of the major music labels to try to expand the variety of ringtones and other musical features available on the device, several label executives told THE NEW YORK TIMES' SAUL HANSELL. The negotiations are very active right now and a final deal has not been set, said the executives, who requested anonymity so as not to disrupt the ongoing talks.
"They want a big launch in JUNE," said one label executive familiar with the discussions. That executive said that a deal may come after JUNE 9th, when APPLE CEO STEVE JOBS speaks to the company’s developers conference, a logical date for the introduction of the next generation of iPHONE. An APPLE spokesman declined to comment on the company’s plans.
Ringtones are a very profitable corner of the music business these days, as the price for a short segment of a song is higher than for the full song. Right now, APPLE offers ringtones as a 99-cent upgrade to its regular 99-cent music tracks, but not all tracks can be converted into ringtones. APPLE is looking to expand its inventory, the executives said.
A label executive told HANSELL that the current negotiations, which only began a few weeks ago, may be the opportunity for the music companies to press APPLE on some of their other longstanding requests. Top among them is the flexibility to set different prices on individual tracks. Right now, APPLE sells all tracks for 99 cents. (APPLE does allow for variable prices for full album downloads as well as various bundles. The labels love to add extra artwork, bonus cuts or other features that add a few bucks to the price of a digital album.)
Meanwhile UNIVERSAL MUSIC GROUP is still pressing to get APPLE to consider bundling a monthly music subscription with some of its iPHONE and iPOD models. Under this idea, an iPHONE might come with the right to download and listen to any song from the major labels for a period of a year or two. Two executives said this was still under discussion, but it is unlikely to be part of whatever mobile music deals are announced in JUNE. The gap between what APPLE wants to pay and what the labels think such a service is worth is still far too high, the executives said.