Apple looks to OTA downloads for 3G iPhone, record labels look for cash

According to a churning rumor-mill, Apple desperately wants to make over-the-air downloads of iTunes content a reality on the 3G iPhone. Apparently, a record label executive "familiar with the discussions" states that the Cupertino gang is hoping for a "big launch in June" which includes OTA music downloads, ringtone sales, and ringback tones (the substitute music you hear instead of a ring when calling someone). There's only one problem: the labels want a higher premium for those services than a typical MP3 download. Of course, Apple's iTunes pricing has been a point of contention for some time, though its recent rule-bending for HBO could lead to upped charges for the new services. Something tells us Apple has the tenacity and bullheadedness to make this work -- let's just hope they can temper the labels' greed with the end user's economic realities.

[Via AppleInsider]

[w00t @ May 19th 2008 1:46PM]

Seriously, why would the type of internet connection factor into the record labels profits?!
It has absolutely nothing to do with them, and has absolutely no effect on their costs whatsoever!

This calibre of greed should be illegal.

[Vidit Bhargava @ May 19th 2008 1:51PM]

yup...correct...this is actually a money-churning mill for Apple...and people will blindingly pay...How do you think apple came out of losses since the ipods and now profits in millions??
another money-making technique...ringback tones...age old concept but will seem to be "new" as apple bringing this to the US and "only available on the iphone"

[Allan @ May 19th 2008 2:12PM]

The record labels want people to pay more for the convenience of not having to be at your computer.

[fanman @ May 19th 2008 2:13PM]

Why are the record labels even being asked? When you go to a real record shop, you don't pay more if you arrived by a certain method of transport, so why is how you get to the iTunes store important?

[swpoison @ May 19th 2008 2:22PM]

Lol you got that right music is already overly expensive, you pay the same amount for a digital product with not freaking online backup (not to mention nothing you can hold in your hand, no case, and no cover), and they want to increase that so you can buy the same digital product over a different internet service which you are paying for.

These levels are greed is of course legal because people will use the service. It would take customers not using the service for the price to drop and come sense when has an American actually fought for lower prices sense like the 50’s. SO SUCK IT UP AND BEND OVER APPLE HAS A BIG ONE FOR YA THIS TIME.

On a personal note I'm glad this got reported my decision on buying the 3G iphone will be related based on this.

[Vidit Bhargava @ May 19th 2008 2:26PM]

now may be...3G services for the iphone will be costlier....right now it is $20 for the data plan etc...for 3G it might be $30

[ssuk @ May 19th 2008 2:49PM]

Fuck the RIAA!

[Ryan Karolak @ May 19th 2008 2:52PM]

Because the labels will take any opportunity to make great profits they can. If it's different, it's another opportunity for them. What they don't realize though is that simply adding another method for people to get their content easily can only help them and implementing more fees and trouble both for the provider (Apple) and the customer is going to only hurt them.

[w00t @ May 19th 2008 3:03PM]

Seriously if they wanted to maximize their profits they should drop their legal team (and it's budget) and concentrate on making the music highly available, highly affordable (cheaper than physical media) and highly convenient (no DRM or stupid restrictions, works with every device, every platform).

If the entire catalog of every label was available on digital download including brand new releases and the entire back catalog, in perfect quality with no DRM, works on every device, available at all major download stores, and at a reasonable price, I'd be buying a hell of a lot more music and P2P would have far less appeal!

Even if it was only at their store so they don't have to share the profits with anyone but the artist, it would be perfect :)

Hell, P2P would be worthless to me if that happened!

[James Cameron @ May 19th 2008 3:18PM]

Carrie Underwood? What crapassjunks are the Americans listening to?

[gabe @ May 19th 2008 3:53PM]

i only pay $5.99 for tmobile internet.

$30 is way too much when we also pay for broadband

[Trent @ May 19th 2008 7:52PM]

I am probably getting the new iPhone but will not download CRAP from iTunes nor will I after I get my new toy.

Major record labels = assholes who put out crap music to begin with just to make a buck. They are trying hard to stay above water as the industry has moved to digital.

No one should be paying $10 for an album or a buck for a song that has been decompressed to 10 times he normal size.

Thank god for emusic who fights for the people.

[loosely_coupled @ May 20th 2008 2:27AM]

@Vidit Bhargava

You are a damn moron. You are seriously stating that over-the-air music downloads are a 'money-churning mill' for Apple? do you have any idea how much of that $0.99 per song on iTunes they receive? a few cents. Or that they actually LOSE MONEY on every video purchase from the iTunes store.
After factoring in costs, the entire iTunes store is a LOSS LEADER to make their iPods more attractive.

You can feel however you want about Apple, but when you criticize them, you better know the facts or you look like an idiot.

[Josh @ May 19th 2008 1:48PM]

This really would be a good thing. Then instead of pulling over in a residential area and stealing someone's wireless to buy a sing I can use my 3G service instead!

[sorensilk @ May 19th 2008 1:48PM]

That's just idiotic. Why would an mp3 downloaded over 3G be worth more than an mp3 downloaded over wifi. That's just pure and simple greed.

[Zak @ May 19th 2008 2:17PM]

"Pure and simple greed" very accurately describes the big record labels. This isn't really surprising.

[Striker @ May 20th 2008 12:55AM]

Pure and simple greed also describes Apple.

[Engadgetluvsappl @ May 19th 2008 1:48PM]

Meh, why don't people just pirate the MP3s using the iPhone's browser?

[Vidit Bhargava @ May 19th 2008 1:52PM]

coz people just like paying apple :)

[wehooo @ May 19th 2008 1:58PM]

or use www.seekpod.com/iphone

[Zak @ May 19th 2008 2:11PM]

Have you ever considered that stealing music hurts the artist? It hurts the artist a lot more than it hurts the record labels. I'd say people who pay for music simply have some morals. Now if the labels would get a clue and stop demanding DRM for everything, that would be a much better solution.

[telepheedian @ May 19th 2008 2:22PM]

Stealing the music may hurt the artist more than the label, but buying the music helps the label a lot more than the artist. Because of the greedy middleman, its a lose-lose situation.

[Zak @ May 19th 2008 2:25PM]

Oh I agree completely. I just choose what I see as the lesser of two evils by at least giving the artist something, despite giving the labels a lot more.

[packetsniffer @ May 19th 2008 3:02PM]

Because you can't download files with the iPhone's browser, I'd say.

[Brad @ May 19th 2008 3:08PM]

@zak: When you chose the lesser of two evils, you're still choosing evil.

On a side note, not purchasing a downloaded track does very little to hurt the artist. Typically, an artist receives fractions of a percent per-track, and even with millions of purchases that still ends up in low thousands of dollars. If you made YOUR employer $2M, would you expect to only be paid $1k?

For artists (and the reason so many are starting to give their music away) album sales, radio spots, and mp3s are really just advertising for their live shows, where they make their real money. The pittance that their label gives them for generating tens of millions of dollars in retail sales just isn't a motivating factor, and certainly doesn't constitute "stealing from the artist" (an odd concept, since theft implies you've deprived someone of a material good of which there are limited quantities. Copy and theft are very different).

Really, if you like an artist, you're only "stealing" form them if you don't go to their shows. You're certainly not paying THEM anything when you download their music from iTunes.

[Zak @ May 19th 2008 3:49PM]

Brad - Actually, you are. I know it's not very much. And I'm well aware of how little artists receive from the labels. However, downloading music without somebody paying for it = stealing. Period. No justification.

I agree that it's a crappy situation and that artists deserve a lot more. I just don't think that stealing the music is the answer, even if it is shafting the labels. And yes, I agree that the labels all need a good shafting.

[generally @ May 19th 2008 5:00PM]

Just download the music you want, then donate directly to the artist. This way you get the content you want, and more money goes to the artist than if you had paid for a CD, or downloaded through an internet service.

[Brad @ May 19th 2008 5:22PM]

@Zak - It must be fun to live in your RIAA-constructed world, but when you DOWNLOAD a song, or a movie, you are NOT stealing, you are committing copyright infringement. The two are very different. This would be similar to going to a library, picking up a book, taking it over to the copy machine and coping the entire contents (or better yet, just the chapter you need). Is it the same as grabbing the book out of a book store and heading for the exit? Of course not.

Theft is when a physical property is taken without consent of the owner. Theft is NOT 'not paying for something and having it' and it is NOT 'duplication of a piece of a larger work for personal use'. Even copyright infringement only gets bad when you're profiting off of the distribution of protected works - not possessing them.

So, I'm sorry, but "downloading music without somebody paying for it" != stealing. Period. Just because a commercial or a sticker on a CD or a movie preview tells you something doesn't make it true, and CERTAINLY doesn't make it law. Think for yourself.

[craig @ May 19th 2008 6:19PM]

Brad, give the tired argument over copyright versus stealing a rest. It's important in the courtroom but meaningless otherwise. When you download a song, you are taking something that doesn't belong to you. Those of us who speak English call that theft even if the legal system calls it something else. Law doesn't define the language we speak.

Don't think, either, that by committing copyright infringement you haven't deprived the owner of property. The owner of the work possesses the right to control duplication and distribution and that is his "property". By duplicating without permission, you've taken that from him.

Regardless of your petty objections to words, a crime is a crime and arguing senselessly what the name of the crime is doesn't make it any less so. Don't think for an instant that copyright infringement is of any less consequence than theft.

[CB17 @ May 19th 2008 7:44PM]

I agree with Brad 100%. Well said.

And yes, the music labels are greedy assholes that need to get a reality check. They're not gonna make more money by charging more since they're going to lose a lot more customers by doing it.

Charge less = more sales, more customers and more people willing to test the waters.

[CB17 @ May 19th 2008 7:53PM]

@Craig

You're so wrong.

You clearly didn't read the excellent example given:

"This would be similar to going to a library, picking up a book, taking it over to the copy machine and coping the entire contents (or better yet, just the chapter you need). Is it the same as grabbing the book out of a book store and heading for the exit? Of course not."

In the first part, the total amount available to the store hasn't changed. The store hasn't lost anything at all and no matter how many books that person copies, that same original book will still be available to the store to give to other people. The only thing lost is ONE potential customer (and you could EASILY argue that said person wasn't even a potential customer to begin with).

In the second part, the person is actually taking the PHYSICAL object. The library, therefore, would actually have to purchase a NEW one, otherwise the library could lose THOUSANDS of potential customers.

While I'm not saying scenario 1 isn't bad (my personal preferences not withstanding), it doesn't even fall into the same universe as scenario 2.

[Ed @ May 19th 2008 1:48PM]

I thought you could buy songs on the iPhone, or is that just over WiFi?

[Zak @ May 19th 2008 1:49PM]

Yeah just over WiFi.

[Ellianth @ May 19th 2008 1:53PM]

Oh yeah, cuz Apple isn't greedy too... People seem to have no problem paying for ring tones made from songs they've already bought, so they won't mind an additional fee.

[w00t @ May 19th 2008 1:59PM]

If I remember a lot of people were upset about that! So much so it wasn't long before there were loads of third party methods to avoid this senseless charge, and after that an Apple supported method with GarageBand.

[wehooo @ May 19th 2008 2:01PM]

It was the record companies that forced the ring tones to be sold separately because they make more money on them since they don't have to pay the artist for the sold ring tones.

[happy_penguin @ May 19th 2008 4:48PM]

How is what Apple does any different from any other way of legally buying ringtones? With any other service you still have to pay for the ringtone even if you own the CD or music file.

[Joppa @ May 20th 2008 12:14AM]

Not true. Apple does not allow you to add free ringtones unlike tons of other phones. I have owned several phones that allow me to use any mp3 as a ringtone. It worked by either drag and drop the file to the phone while synched, or i would mail the file to my phone. All free.

[happy_penguin @ May 20th 2008 2:25AM]

Drag and drop my own music in would be fine with me. I have never used anything but the included ringtones in my phones. But I am certainly not interested in the so called free ringtone sites. I don't trust them. Next question: Is it legal to use your own mp3s as ringtones? As far as I'm concerned I don't see anything wrong with it but I bet the RIAA has something to say about it.

[Rob P @ May 19th 2008 1:54PM]

Certainly, because Apple's main focus is saving us money. If it doesn't hurt Apple's own profits, they don't care.

Case in point: The iPod in the picture for this "story." Is that a first-gen iPod Touch or a second-gen. The difference being that the first-gen, loyal early adopters were the ones who got reamed for $20 for the mail, weather, notes, etc. apps which came standard for people who got on the train a bit late.

And as for the prices... someone will be dumb enough to pay them no matter what they are... they need that new incoherent Ying Yang Twins song NOW rather than waiting 3 weeks and spending 5 minutes once someone finds an alternate way of getting it on there for free with your own copy of that song.

[The New Guy @ May 19th 2008 1:56PM]

And you wonder why Piracy is rampant!?!?!

Why does the artist need to make $25 million an album?? Why are they not content with $5 million??

Why do the record labels need to register $100 million in profits?? Why are they not content with $15 million??

It's all the damn greed!!

[yeah yeah @ May 19th 2008 2:03PM]

what artist makes $25 mil an album...?

[Cash @ May 19th 2008 2:05PM]

Artists don't make 25 mil per album... what hole did you pull that number out of? Artists make most of their money off merchandise or direct album sales, which is why their damn cheap shirts cost 40 bucks at their concerts.

Labels, on the other hand...

[The New Guy @ May 19th 2008 2:42PM]

It was figurative....
Don't take it so literally... i don't have profit numbers etc etc...

It was just an example....

Did arnold swarchenegger need to make $30 million for T3?!?! I felt ripped off paying $15 for it at the movie theatre!

[PDubNYC @ May 19th 2008 4:30PM]

"i don't have profit numbers etc etc..."

Well then don't talk like you do. Without hard numbers, you have no argument. Nice try switching to movies, which has a very different business model, and how talent is compensated. What are you, 12?

[The New Guy @ May 19th 2008 4:45PM]

If the money is made on T-Shirts and what not, why don't they just give the music away?

Paul McCartney did that just over this weekend.

You number people are the ones that stay in the box....

[Joppa @ May 20th 2008 12:28AM]

The Fail Guy

[Ethan @ May 19th 2008 1:59PM]

They're not the ones adding extra value.

[Apreche @ May 19th 2008 2:05PM]

Let us download audio and video podcasts directly to the phone please. I shouldn't have to sync with iTunes if the iPhone/iTouch has its own Internet connection. Why is there still not a device in existence that has this obvious and awesome feature?

[martin @ May 19th 2008 2:08PM]

theres a podcast app for the N95, it's not perfect but its pretty damn cool