Is Every Major Going To Plunge Into The MP3 Waters?
In news that should give you a pretty solid idea of the music industry’s control over the way its products are distributed, Billboard reports that three titans of American culture that really don’t have a lot to do with music at all–Wal-Mart, Pepsi, and the Super Bowl–may be what finally pushes all four major labels out of their digitally rights-managed cocoon and into the world of MP3s.
First, the Pepsi/Super Bowl promotion, which also represents an alliance with the MP3-slinging Amazon:
Pepsi’s track record with download giveaways may be motivating labels. According to sources, Pepsi will feature a download promotion on the inside of 5 billion of its soda bottlecaps. Sources say Pepsi customers will need to collect five caps in order to exchange them for a download; this yields the potential for 1 billion redeemable tracks. A Pepsi spokesperson declined to comment. …
In the new Pepsi promotion, sources say, Amazon will serve as the supplier for the downloads, and customers will need to visit a specific redemption store on the Amazon site to access music from participating labels. While all majors have been approached about participating in the offer, the price that Amazon is willing to pay appears to still be a sticking point for some labels.
Sources say that Amazon will pay labels in the area of 40 cents per track. This compares to the 65 cents-70 cents labels currently receive from Amazon for digital track sales and the 70 cents they get from Apple.
Hmm, wonder how Doug Morris will feel about that? Oh, right, he’s not dealing with Steve Jobs, so all should be well.
And then there’s the rumor that Wal-Mart is getting out of the Windows Media game:
Another factor driving the labels’ decisions, sources say, involves mass merchant Wal-Mart alerting WMG and Sony BMG that it will pull their music files in the Windows Media Audio format from walmart.com some time between mid-December and mid-January, if the labels haven’t yet provided the music in MP3 format.
Wal-Mart declined comment. “It’s a matter of policy that we don’t publicly comment on speculation,” walmart.com spokeswoman Amy Colella says. “We know digital music is important to our customers, and we’re very pleased with the recent performance and customer response to our digital music offering.”
The Billboard article goes on to note that executives are worried about Wal-Mart retailiating to any resistance via diminished shelf space for its titles in its physical stores–especially given that cutting shelf space–strong-arm tactics that eerily resemble those that certain executives have been attempting against those that might cross them. Oh, ironies!
A Tipping Point For MP3s [Billboard]
