Originally published December 7 2005
Software companies battle record labels over song pricing
by Mike Adams, the Health Ranger, NaturalNews Editor
Microsoft and Apple have united to keep the price of legal song downloading down, as the major record companies, including EMI and Warner, look to increase their royalties.
IT'S rare to see Apple's Steve Jobs and Microsoft's Steve Ballmer united on anything, but both billionaires are out there fighting tooth and nail to protect your right to buy cheap music over the internet.
Both Apple - whose iPod players and iTunes online store dominate the market for digital music - and Microsoft are in dispute with the major music companies over the pricing of downloads, which the latter say is too low for them to make a profit.
Microsoft two weeks ago walked away from a plan to offer subscription-based access to unlimited songs per month, after the major music labels demanded what the software firm considered to be unreasonably high royalty rates during licensing negotiations.
Of course, Apple, with around 80 per cent of the digital music market, has both the most leverage and the most to lose in the current tussle.
Heartwarming though it is to see these magnates fighting for the rest of us, a rise in prices for some songs may actually be in the best interests of consumers.
The major labels - EMI, Warner, Sony BMG and Universal - want to move away from that "one price fits all" model to an approach where new songs from major artists are priced at $US1.49.
It derives directly from a popular argument that has emerged over the past few years about the impact of the internet and other new production and distribution technologies on the economics of consumer markets: the so-called "long tail" theory.
Since the rise of mass production, most companies trying to make money from consumers have focused on "hits" - the cars, laundry soap, movies, songs or breakfast cereals that generated huge profits by allowing the costs of production and promotion to be amortised over millions of sales.
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