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The record companies now see their one-time savior as a clear and present danger.
I.B. BAD ON THE BIG FOUR’S CHANGING TUNE
Majors Consider Playing Hardball With Steve Jobs to Lessen Apple’s Domination of Online Music Retail
As renegotiations between the labels and Apple continue, rumors are flying about some potentially dramatic moves on the part of the Big Four, who now view Steve Jobs as having too much power resulting from iTunes’ marketshare dominance in the digital arena. The majors want to control availability and pricing, but Jobs appears to have all the leverage. Consequently, the record companies now see their one-time savior as a clear and present danger.

In their shared desire to lessen this stranglehold, label executives have been weighing strategic options to employ in the renegotiations. The most radical move being contemplated, say inside sources, is a boycott of iTunes, with the majors choosing to no longer license their music to the dominant online music retailer. Alternately, they could use the threat of pulling their catalogs as a bargaining chip in seizing back some control from Apple. But at this point, it’s impossible to predict whether the Apple boss will make concessions to the majors or simply let them walk, secure in the knowledge that consumers will find other ways to fill their iPods.

Should the majors go through with this bold strategy, it would eliminate a substantial part of their bottom line, obviously. But some label heads, convinced that it’s unhealthy to have one individual holding all the marbles, are said to be willing to suffer this short-term hit in order to achieve the long-term benefit of opening up the digital marketplace out of the realization that this is clearly where the music business is heading. They envision a competitive online retail environment in which numerous players battle for marketshare, paralleling the brick-and-mortar arena of the good old days.

More and more label executives now believe that such an outcome is possible only with the universal adoption of the DRM-free MP3. Ironists note that any label staffer endorsing the unprotected MP3 five years ago would’ve been tarred and feathered…

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