Universal Threatens to Pull Songs From Apple’s iTunes Music Store
From Freedom to Tinker:Â
News that Universal Music, the world’s largest record company, was threatening to pull its music from Apple’s iTunes Music Store. Why would Universal do this?
The obvious answer is that the companies are renegotiating their contract and Universal wants to get the best deal they can. Threatening to walk is one way to pressure Apple.
But where digital music is concerned, there is no such thing as a simple negotiation anymore. For one thing, negotiations like this have political ramifications. The major record companies have managed, remarkably, to convince policymakers that protecting their profits should be a goal of public policy; so now any deal that affects the majors’ bottom lines must affect the policy process.
(As I’ve written before, copyright policy should be trying to foster the creation and distribution of varied, high-quality music — which is not the same as trying to ensure anyone’s profits.)
The political implications of Universal’s threat are pretty interesting. For years the major record companies have been arguing that the Internet is hurting them and that policymakers should therefore intervene to protect the majors’ business. iTunes’ success has supplied the major counterargument, suggesting that it’s possible to sell lots of music online.
Walking away from iTunes would cause a big political problem for Universal. How could Universal keep asking government to prop up its online business, when it was walking away from the biggest and most lucrative distribution channel for digital music?
And it’s not just Universal whose political pull would diminish. The other majors would suffer as well; so to the extent that the majors act as a cartel, there would have to be pressure on Universal not to pull out of iTunes.
Most likely, Universal was just bluffing and had no real plan to cut its iTunes ties. If this was a bluff, then it was most likely Apple who leaked the story, as a way of raising the stakes. Its bluff having failed, Universal is stuck doing business on Apple’s terms.
One can’t help wondering what the world would be like had the majors moved early and aggressively to build an online business that customers liked. Having failed to do so, they seem doomed to be followers rather than leaders.
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