Sony: We Aren’t Leaving iTunes

| News

Sony Network Entertainment’s COO Shawn Layden countered hints from earlier this month that the company was considering pulling its music library from Apple’s iTunes Store.

“Sony Music as I understand it has no intention of withdrawing from iTunes, they’re one of our biggest partners in the digital domain,” Mr. Layden said, according to Business Insider. “I think those words were either taken out of context or the person who spoke them was unclear on the circumstances.”

Sony still loves the iTunes Store

Earlier this month, Sony Computer Entertainment CEO hinted that if the company’s Music Unlimited service takes off it might not need to offer content through Apple’s online music store. “If we do [get mass take up] then does Sony Music need to provide content to iTunes?” he said.

Mr. Ephram went on to say “Publishers are being held to ransom by Apple and they are looking for other delivery systems, and we are waiting to see what the next three to five years will hold.”

Considering both Mr. Ephram and Mr. Layden are high enough up Sony’s corporate ladder to be privy to their company’s plans. Considering the popularity of Apple’s iTunes Store with consumers, however, it seems more likely that Mr. Layden’s comments are more accurate.

Comments

mhikl

Where heads the creative world? (This should be in verse but business demands its time.)
Dickens and others, 200 years ago, self-published. It was tricky and iffy. The venue for self publishing in music and text through iTunes is cracking that door open. The winds this time may tear the door from its hinges. Where will the likes of Sony be if that happens?

Revolutions, like the one in Egypt, spanned years and decades to yield success. Egypt’s foray into revolution took weeks. Changing times.

Be healthy, Steve; but rest if you must, knowing your footprint began the 21st C.

Tiger

Sony is in a prime position to bargain with Apple on this. Just because the policy is 30% doesn’t mean that Apple can’t bargain with individual companies on different rates. Kind of the way the do to garner more than half of Samsung’s production run, the BULK of the NAND Flash production yearly, etc.

Still, with all the moves and “adjustments” to their policies lately, even the most ardent supporter has got to be feeling it’s time to slow down, take stock, and think about long term effects on short term policies.

Bosco (Brad Hutchings)

Tiger, I am truly humbled by your sentiment. It’s all I’ve ever hoped that the Apple/Mac user community would do. War footings are fun and lovely when you’re the underdog. They are menacing and dangerous when you are a real player.

But I don’t see Apple being able to “cut deals” unless it sets explicit dollar tiers and they get very close to the marginal rate for credit card processing at the highest tier.

RonMacGuy

Tiger, I think you made Bosco’s day. Is that a tear in his eye?

I don’t see Apple as being the “cut deals” or “dollar tiers” kind of company. Not how they operate typically. There was a ton of grumbling in the music industry initially, but I think things are pretty consistent and flat as far as iTunes cost structure. Same with movies, TV shows, etc. It will be the same in the publishing arena too, given time. Maybe I am just being naive (or ignorant) and maybe there are deals cut under-the-table between Apple and the “big guys” where they don’t pay what the smaller music companies do.

Bosco (Brad Hutchings)

Ron, the main difference between music and periodicals/books/etc. then and now is that back then, Apple offered a secure way for music publishers to sell directly to customers with standard DRM, usage rights, pricing, and an inexpensive device. There was an easily understood value proposition there.*

If they offered periodicals that way through iBooks, and positioned iBooks so that it had to compete on its own merits against individual publishers rolling their own apps, I’d be totally fine with their percentage and even their terms.

The problem is that Apple has seen that the publishers currently want to roll their own apps and Apple is just too lazy to try to make iBooks into the electronic magazine equivalent of the iPod. So they have applied the “squeegee boy” business model. If you’re too young to know what that is, in NYC early 90s, there were a whole bunch of “squeegee boys” who would walk up to cars stopped in horrendous traffic, wash the front windows, then try to collect a buck from drivers who didn’t even ask them to perform the service. The nasty ones, if they didn’t get their buck, would then undo their work in all sorts of impolite ways. That’s what frosts people’s collective arse about Apple’s approach.


(*) And if you really want some perspective, dig up Bryan Chaffin railing against DRM back in the day. It took me about a year of reading his rants and knowing that he’s a really good guy to come around on that.

RonMacGuy

Bosco, I appreciate your comments until you start with your typical editorials. Apple being “just too lazy”. “That’s what frosts people’s collective arse.”

I posted some comments yesterday from those who see value in Apple’s approach now. ?We are not in the payment processing business. We?re happy to concentrate on our core strength of producing great content.? From Ted Nadeau, general manager of the Elle Digital Group. Regardless, times are different now, and Apple is different now. More powerful. Stronger bargaining position than they used to be in. Some may have their arses frosted, but as I have said before, ANY company takes advantage of their size, strength, and bargaining position. Any company that doubles in size uses the higher volumes to push on their parts suppliers to get better pricing. This is no different, except that Apple bargaining position is incredibly higher in a relatively short amount of time.

Not quite sure about your opinion on the similarity to the “squeegee boys” but it made for some humorous reading. Apple is not forcing their products on people. But in that 150 million people use their products, they are better positioned to sell their services to those who want exposure to 150 million customers who are more willing to spend money on the latest fancy gadgets than the average person.

I guess I just don’t understand why anyone would have their arses frosted over capitalism.

Bosco (Brad Hutchings)

Ron, there are plenty of comments from recognizable companies that aren’t happy with what Apple is doing. Your companies and my companies should meet for a pissing match, pizza, and root beer followed by an awards banquet.

The difference between your companies and my companies probably boils down to size, existing channels, and focus. If you’re a publisher of anything without a serious channel, and without serious payment processing, 30% to play in the App Store is probably a reasonable deal. If you’re Sony or Amazon or Netflix, it’s frigging robbery. In fact, anything above the average credit card clearing rate is frigging robbery, and that’s ignoring the value of actually knowing your customer and being an equal in that relationship. If you’re Rhapsody, the Apple model is suicide. The margins are too thin, and they would have no way to pin the Apple tax on Apple customers.

Above all, none of them wanted or asked for Apple’s help. Their presence in the App Store isn’t costing Apple anything, isn’t hurting Apple’s sales, and isn’t reflecting badly on Apple. In fact, it has helped and is helping, marginally but positively.

Apple’s 200 gazillion iOS customers do not all expect to only buy from Apple. They aren’t so stupid as to be unable to deal with multiple vendors. The scale of Apple’s customer base puts it past the point where it could be that 2% who have a Costco membership and only buy from Costco. When the local grocery stores here totally sucked back in the 90s, I was that guy, so I know what I’m talking about.

As for the “lazy” editorializing. It’s all good when the world’s biggest a-hole does that cuz he’s your guy, but it hurts when anyone directs it at your favorite company. You posted Apple v. Amazon market share in music. Kindle v. iBooks is much more dramatic, and it’s no surprise why. File that under the pissing match and awards banquet above…

RonMacGuy

You are exhausting to “listen” to, Bosco. Well, sorry that Apple is in the business to make money.  If Sony, Amazon, Netflix, and Rhapsody don’t like it, they can do their own thing and compete against Apple.  If Rhapsody’s margins are too thin, then maybe they don’t deserve to survive.  But whatever.  If Apple goes a few months and everyone is boycotting them, then they will change their terms to be more competitive.  but if everyone keeps complaining but grudgingly signs up, then it demonstrates that Apple once again knows how to make a boatload of money by creating the market.  Time will tell.

Bosco (Brad Hutchings)

Except they created nothing new and nothing that anyone wanted. All these apps have ways to bring in content and ways to purchase it, ways that seem to be doing well enough for the app developers.

But Ron, it’s funny in a way to see Apple fans waving their wallets. The Mac and the Apple brand used to be about being simpler and more elegant. Now it’s about paying for everything with an iTunes account. Can’t imagine why anyone who ever appreciated elegance would get behind that.

RonMacGuy

Whatever you say, Bosco.  I guess elegance and simplicity don’t come cheap.  Luckily, I can afford to be elegant and simple!!  Makes my life easier, and makes me happy.

Log-in to comment