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Article

Title: Labels Push for Subscription to Use iTunes Store

Author: Chaffin, Joshua Article Type: Product Analysis
Source: Financial Times, p15(1) Publication Date: Apr 13, 2007
URL of Publication: http://www.ft.com

The world's biggest music labels will probably ask Apple to provide a music subscription service as part of Apple's iTunes digital media store. The request will be part of negotiations to renew their agreements with the computer company. Apple will soon begin talks with Universal Music, the largest record company, and competitors to Universal (which are Sony-BMG, Warner Music and EMI) have either begun talks with Apple already or are ready to do so, according to people close to the matter. Universal and other labels say a subscription service could make Apples iTunes be more revenue-generating for the labels than the current iTunes model for charging consumers per track. The subscription service would increase consumption of music and could also allow the labels to get a share of monthly payments, as well as small licensing fees each time their songs are played. Record companies could also renew a request for variable pricing on iTunes as they attempt to increase digital profits. Music companies have in general had to accept Apple's terns because iTunes makes up about 75 percent of online music sales in the U.S., even though it has competition from Microsoft Zune and other services.

Companies:
Apple Computer Inc

Products:
iTunes

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