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iTunes Music Store Japan negotiations fall flat


Nearly a year and a half after the inception of Apple's iTunes online music store, negotiations for a Japanese version of the service reportedly remain at "square one."

Like its would be American cousin, Apple would like its Japanese iTunes music store to sell music tracks for the the equivalent of US $0.99 (about 110 yen). But with similar Japanese music services now charging double that rate, and average cost of an audio CD hovering around US $30, local major music labels are telling the iPod maker to go fish.

According to industry sources, Apple began meeting with Japan's major music labels over a year ago, but have seen negotiations progress at a minimal pace, at best. "They are betting on their dominance to overthrow the resistance, but the record labels are not yet ready to surrender to a 50% cutback on their music sales," one insider said.

But price discrepancies are not the only factor threatening to prolong the negotiations, Japan's Asahi Shimbun newspaper is reporting this week. The music labels claim that Apple's copy protection measures are inadequate and are demanding that the company impose additional limitations to prevent illegal copying of digital music.

Unlike Apple's iTunes service, whose FairPlay DRM software allows music downloads to be burned onto CD-Rs, most downloads from present Japanese services are copy-protected and cannot be copied onto CD-Rs. The services also offer different file formats, each requiring specific devices to play them.

In an August 2004 interview, Apple Japan vice president, Yoshiaki Sakito, said to expect a Japanese version of its iTunes music service within a year. However, Sakito this week told the Asahi Shimbun that he is betting on the popularity of the company's iPod digital audio player to eventually help pry the market open— suggesting that the company's game plan may amount to nothing more than a waiting game.

"The record companies won't be able to swim against the tide forever,'' Sakito said.