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Summary:

This has become the equivalent of first snowfall stories that local TV news stations do every year: this gripe against Apple (NSDQ: AAPL) iT…

This has become the equivalent of first snowfall stories that local TV news stations do every year: this gripe against Apple (NSDQ: AAPL) iTunes has been trotted out every year for the last five years or so, and now WSJ spends tons of words to rehash it again, though with some new twists. This time, like before, the argument is that labels would like to sell the albums as a unit instead of singles, and the new part is that some of them are beginning to bypass the iTunes behemoth distribution machine. Apple insists that labels can’t sell the whole album as a unit, and has also stuck, for the most part, to its 99 cent-per-song philosophy, which labels have fought against. Another gripe: Apple often asks for exclusive sales rights for songs in exchange for prominent placement on its home page.

Now, a new example has emerged that runs counter to the Apple monopoly: Kid Rock’s Rock ‘n Roll Jesus album was kept off iTunes, but managed to sell 1.6 million copies in the U.S. since its release last year, a sizable number in these times for the record industry. Seeing that example, his label Atlantic Records (owned by Warner Music) last week yanked an album by R&B singer Estelle from the iTunes Store, four months after it went on sale there. Warner’s rationale? It called the removal part of a broad range of digital-release strategies “uniquely tailored to each artist and their fan base in an effort to optimize revenues and promote long-term artist development,” the WSJ story quotes.

More after the jump

But this is risky — first, by dissing Apple, and secondly by keeping songs off the biggest music service, users may go off looking for illegal downloads instead. Then there’s the little matter of consumer preference: the majority have shown preference for buying singles than albums.

In any case, trying to develop alternatives to monopoly distribution is always admirable, and indeed, desirable in the long run, but the more pertinent question is: if not iTunes, then what? Wal-Mart (NYSE: WMT) is not feasible for every artist or label, and retail sales is on a declining curve. Amazon+Rhapsody+*Napster* can maybe have the reach, someday, but not the awareness or promotional value. On the mobile side, operators and Nokia (NYSE: NOK) can put up their hands, but the reality is it is not happening on any scale in U.S., yet. The only other alternative left is working through scaled social networks like MySpace. Maybe MySpace Music, when it launches next month, will be able to become that other big alternative the music industry wants…

These and other more nuanced topics will be discussed at our EconMusic conference in London on Sept 23.

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  1. What always strikes me at these times is that I don't remember record labels freaking out like this about the big chains. When Walmart suddenly became the biggest seller of CD's they didn't suddenly freak out about it and start selling certain CD's only at other stores.

    And Walmart was can't have been paying the same amount for CD stock as other stores all this time. Walmart is known for pushing it's product supliers around to the point of ridiculousness.

    The real issue is that record labels don't like the freedom that a digital copy of music gives you. They repaint it a variety of ways, but it really always amounts to the same thing.

    Their actions seem designed to try and show how really digital music isn't "all that" when its been repeatedly shown that it IS all that.

    And yes, when I can't find a song I want on iTunes I often just don't buy it until it shows up there. I'm too busy to try and figure out where a song IS available.

  2. Monita De Varge Thursday, August 28, 2008

    This is crazy!

    Labels are crazy

    People should be given the opportunity for choice, so what happens if a band has a one hit wonder on an album and people only want one song, they'd be pissed that they had to download the rest as well.

    I have my Album selling in iTunes & I'm happy to let people buy my songs separately. The music is sitting in one of the largest music databases in the world.

    If I wanted to download only one song from an album, then it should provide the freedom for me to do so.

  3. I wonder if the artist/musician has any say in these decisions? Probably not, but you would think the artists would perhaps like to have a say in how their music is made available — in terms of single songs or album-only.

  4. I agree with Teamost. I'm also curious as to how the artists would prefer to have their music distributed. I would think it would be cool to have it done on a case by case basis for artists. I know certain bands look at their whole albums as a story that is meant to be listened to from begeinning to end…But, what if I don't want to hear all of the parts of the story? It's really an interesting battle between what artists want, what labels want, and most importantly, what consumers are going to BUY. Because if you're not making your consumers happy they'll find a way to get it with out taking legal channels.

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