Apple pressures music labels to abandon Amazon MP3 Daily Deal
According to an executive who spoke with Billboard, the Daily Deal has been around since mid-2008, but it was in 2009, when Amazon asked labels to provide a one-day exclusive before an album's street date in order to be featured in the promotion, that Apple became unhappy. Granting 24-hour exclusivity gave the album promotion across the Web, on various Web sites and social networking feeds.
The labels reportedly paid nothing for the promotion, but simply exchanged the temporary exclusivity for increased exposure. With the deal potentially taking customers away from Apple's own iTunes Music Store, the report said that the iPod maker decided to intervene.
"Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals," the report said.
Apple's alleged approach has apparently worked: Major labels decided not to include high-profile releases such as "Need You Now" by Lady Antebellum and "Animal" by Ke$ha in Amazon's Daily Deal.
The first participant in the Amazon promotion, which started Apple's displeasure, was reportedly Mariah Carey's "Memoirs of an Imperfect Angel," which sold for $5.99 a day before its Sept. 29 street date last year.
Amazon, however, has not been idle as Apple has allegedly become more aggressive with publishers. Bloomberg reported that Amazon has been "fine-tuning its Daily Deal pitch" for new titles, "agreeing, for instance, to forgo the one-day exclusive window on certain ones." Apple, however, allegedly remains upset with the Daily Deal promotion.
A week ago, Apple's iTunes sold its 10 billionth song, achieving the milestone nearly seven years after the online download destination was introduced. Recent figures have found iTunes to represent a quarter of all U.S. music sales, making the service the largest single music retailer in the nation. Digital downloads make up an estimated 35 percent of total music sales, and iTunes accounts for 69 percent of those.
Apple, in the past, has had heated negotiations with music labels over content on iTunes. In early 2009, Apple convinced record labels to remove digital rights management from its music downloads, but in the process it conceded price flexibility. Starting last April, some popular tracks saw a 30 percent increase in price, from 99 cents to $1.29.
As prices were increased in the midst of a recession, annual growth of digital music sales has slowed, but remains a net positive for the major labels. However, one label executive recently conceded that a 30 percent price increase during an economic slump was not the best move.
55 Comments
So let me get this straight. Apple wants me to pay more for e-books, and not get any daily deals on music from Amazon? Careful Apple, eventually it might set in you're trying to screw me.
Very interesting. For now its Amazon and Apple bullying the music industry, but what if the industry pits them against each other and starts bullying them. Saying things like whoever offers the best deal (takes the least in terms of revenues) will get exclusive content AND an early release. This will start a race to the bottom and will hurt both. Thus increasing prices for us (cause the price of tunes is not gonna go down obviously).
I'm not saying Apple shouldn't be mad, but they should make deals with Amazon not trying to pressure the music industry into compliance, cause as I said it could turn out bad.
Is this thinking BIG as in being the new bully on the block?
1.) Flash
2.) eBooks
3.) Music
and Apple wonders why Hollywood wants no part of their cloud?
So let me get this straight. Apple wants me to pay more for e-books, and not get any daily deals on music from Amazon? Careful Apple, eventually it might set in you're trying to screw me.
I agree entirely. Apple is becoming just like every other large corporation. Climbing in bed with AT&T tells me they are also becoming more political too. (Who knows what lobbyists Apple is hiring these days?) Having been an Apple user for twenty-six years I am keeping my eye out for the new players in tech. I am sure the Apple shills will jump in here shortly and try to convince us that increased prices are a good thing...remember when the record industry transitioned to CDs and how they told us the prices would go down? Apple is effective increasing all the pricing and becoming one of the oligopoly players in the scheme of things.