Has Steve Jobs dropped the iTunes ball?

Has Steve Jobs dropped the iTunes ball?

Summary: Has Steve Jobs been too focused on the iPhone over the past six months and allowed problems to develop over in an established part of Apple's business - iTunes. The New York Times reports today that Universal Music Group has notified Apple that it will not renew its annual contract to sell music through iTunes.


Has Steve Jobs been too focused on the iPhone over the past six months and allowed problems to develop over in an established part of Apple's business - iTunes.  The New York Times reports today that Universal Music Group has notified Apple that it will not renew its annual contract to sell music through iTunes. 

Rather than have a contract, Universal wants to be able to sell music to Apple at will, which would give it the right to remove songs from iTunes if pricing became an issue.  Universal hopes that by not entering into a long-term contract with Apple that it might be able to negotiate better terms. 

There are two sides to this story. 

On the one hand Apple wants a single pricing scheme for music sold through iTunes (or at least it did until it introduced iTunes Plus).  Apple believes that this simplifies the buying process for customers and helps to reduce piracy.

Universal, on the other hand, has a different view.  It sees Apple as a company which, while jealously guarding its own business, is willing to meddle and interfere in other business models.  Universal doesn't like the fact that Apple is using low-priced music to sell (and profit) from iPod sales.

Is there a chance that Universal might pull its catalog of songs from iTunes?  Yes.  It would be a hugely moronic move, but the music industry has been known to make some really bad calls over the years.  Universal would like nothing more than to hurt Apple, even if that meant hurting itself in the process.  If Universal does pull the plug on iTunes, I'd expect it to have an iTunes clone up and running first, possibly selling music for the same price as Apple currently does, but cutting out the middle man.  Apple's weakness in the music industry is that it's several steps removed from the business of making music and that puts the company in a potentially dangerous position.  If Universal pulls out of iTunes, other studios could follow suit.  That could leave iTunes with a store but nothing to sell.


Topic: Apple

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  • Calling all Pirates

    Well, maybe not.
    Apple sells enough primo audio recording software that an iStudio does not seem
    to be a reach. Sign with us and we will produce and promote you.
    That would really bite Universal's butt.
  • Adrian, is this your new mission...

    To only write negative articles about Apple !!!!!
    • When they drop the ball

      They should get called on it. Why is that a problem?
      • The issue isnt whether Apple dropped the ball ...

        All of his latest artilces deal with Apples problems (correct or not). Adrian has dropped the ball on all the other gadgets (since he claims to be the Gadget Geek) to just report on Apple, also iTunes is not really a Gadget.
  • Only if you subscribe to the myth that Jobs is Apple

    ZDNet is going to have to make an effort to quit writing simplistic and reactionary articles
    about Apple. Apple is so much more complex a company than you portray in your simple
    columns. Maybe it's time that ZDNet mature into something more respectable as well. Soon
    its writers will have nothing relavent to say otherwise.
  • Apple Tourism


    I'm in agreement with my fellow posters. The Apple tourism has to end. If this
    blog is going to focus on Apple products to the extent that it does, a 2 week stint
    with a loaner MacBook is not going to cut it. Sniping at Apple has kept you from
    gods work and it is making you look like a troll. Either pony up for your first real
    computer or return to the safety of the PC walled city. Vote with your own money
    and qualify yourself, for the first time, to levy criticism on the Mac platform. Either
    that, or please go back to blogs about building and repairing PCs. The world is
    being left without white papers on Darth Vader mods, or an updates on the new
    Vista driver issues. We await your decision with baited breath.
    Harry Bardal
    • I would say that Adrian ....

      ... is as qualified to blog on Apple as you are to respond to every Windows article with your inane dribble about Apple being the only truly open platform. Blogging is about offering your opinion. There are no entry requirements. Not owning a PC does not stop you from complaining about them.
      • ShadeTree...

        To use your own words, he is offering an opinion whether you agree with it or not. Just as I am now.
        "Blogging is about offering your opinion.
        • As did I.

          You notice I did not ask him to buy a PC before he offers opinion. It was he that suggest Adrian buy a Mac before blogging about them.
          • Crapware from Redmond

            If he, and many others at ZDNet, has so many problems with the flawed Windows PC
            then why just complain about it? Why not buy something else instead?

            The loudest complaint of them all, and the most effective, is voting with your wallet.
            (Yes I know you work for a PC OEM)
      • Assumptions

        You assume I don't own a PC. I have, and do now. A fairly new one in fact. It's
        running daily. Why would I offer input without having any personal experience? As I
        said opinions are like noses, everyone has one. Informed opinion however is more
        valuable. Perhaps you'd like to lobby on behalf of uninformed opinion over an
        informed one, but based on your posts, my guess is, you'd be taking an uninformed
        position in that argument as well.
        Harry Bardal
        • We believe you too Harry!

          Of course you have a PC. I mean your contempt for them has nothing to disuade us from believeing you do. The question is why you do. Is it that your vaunted Mac doesn't do everything you need it too or do you run a PC as penance for some past transgression? As to the rest of your post - sticks and stones Harry, sticks and stones!
          • Contempt?

            Clearly I'm darned if I do own a PC and darned if I don't. I'll let you come to the
            conclusion for yourself, as to which is the lesser of two evils. Years may have to
            pass before you are made to understand why my criticism of a PC and my
            ownership of a PC are (and should be) aligned, rather than being mutually

            What I've lobbied for is balance in the marketplace. To imply that I want Apple to
            dominate is ridiculous, and a sign that you have not understood any of my posts.
            It's also the kind of comment that comes from someone working within the yoke
            of a monopoly. You are probably in a massive rut. Your predictions are
            commensurate with your experience.

            I admire machine logic, and the things that carry them. To say that I have
            contempt for the PC is incorrect. I'm very disappointed in an unrealized potential.
            What comes closer to contempt for me is attitudes like your own. Attitudes that
            will reject the potential of any given logic gate to make a political and economic
            issue out of a technical one. My worst criticism of the PC has been that it's second
            rate. I reserve the more pointed criticism to obedience to flawed logic.

            For the first time, Adrian Kingsley Hughes made himself familiar with a viable
            alternative to the PC platform and the PC platform economy on which he's built a
            10 year career. To switch to another platform is to betray his current platform and
            the job around which it's based. For yourself, even platform tourism may
            constitute betrayal. How exactly did we allow it to get this far? We are still in a
            place where viable and merited technical options are marginalized by the political
            and economic conventional wisdoms. In the arena of computing, the open market
            has been subverted by a surrogate economy based on a single platform. A single
            platform in which all tribute is payed back to a single landlord.

            You are not required to believe that I own a PC. I'm not going to work to convince
            you. If however, you can wrap your head around such an incongruity, and you do
            know what I do with it, that's simple. I do what everyone does with computers. I
            try to realize it's potential.
            Harry Bardal
    • Will the Apple fanaticism end also Harry?

      Will you agree that the fanatical garbage coming from "your fellow posters" should also end?

      Maybe a two week stint where the blinkered cultists stop trying to put a positive spin on everything that doesn't conform to the Apple party line is in order?

      First real computer? What, exactly, defines a [b]real[/b] computer in the Harry Bardal Wonderland?

      You've been sniping (albeit pathetically) at PC's for what seems like an eternity. Does this keep you from "Gods" work, because it certainly has made you into one of the biggest trolls on ZDNet.

      We don't await your "decision", because we know that it won't happen until you receive a direct command from Cupertino.

      Back under the bridge for you Harry...
      • Bridges of Understanding

        It's usually better, when calling someone out, to use your own words rather than the
        adversaries words back at him. "Know you are but what am I" tends to look lame to
        the adult eye.

        Now that you've established that I'm a jerk, perhaps you could get back to the
        subject at hand, informed vs uninformed opinion. Care to weigh in?
        Harry Bardal
  • Direct sales from the production companies would fail.

    People like iTunes because it has the best selection of music, and a unified user
    experience. The pricing structure is part of that, and that is what Apple is trying to
    protect. If the music production companies want to start their own online stores,
    they will see a dramatic drop in sales, because no one is going to want to go to five
    or six different online sites, each with their own interfaces and user experience, to
    buy music. It is just too much trouble.

    Apple is not dropping the ball, they are protecting exactly what makes their
    download service popular.
    • People will go where the song they want is.

      iTunes without it's content is not exactly a compelling solution either.
      • It's posturing

        Apple has not licensed their DRM, and Universal (still rabidly, stupidly DRM centric) is NOT going to sell DRM free MP3s, which basically excludes 80-90% of all players out there. I think Universal is about to learn that they don't really run the show anymore (none of the bigs really do, they still just think they do) and this realization is going to take a long time to sink in as CD sales continue to fall and they keep trying useless DRM to enforce sales.

        If Apple did not currently rule the hardware market, you would be spot on, but they do. Universal has the choice, sell through iTunes or simply stop being a part of any meaningful online market.

        • agreed - I YAWN

          Adrian should take a lesson from his own headlines
        • Misinformed and wrong headed.

          Apple is not the only company offering DRM although they do hold the record for the "Fastest Broken". We shall see if it is posturing or real soon enough but make no mistake about it Apple needs content providers more then content providers need Apple. Remember you read it here when the day comes.