According to the New York Times, Apple, led of course by Steve Jobs, is now pushing its weight around in negotiations with the record labels. They admittedly are a bit afraid of Apple
In interviews, several high-level music executives, who spoke on the condition that they not be named to avoid angering Apple, said they operated in fear of Apple’s removing a label’s products from the iTunes store over a disagreement, even though that has never happened. The labels do not have much leverage in negotiating with Apple.
Of course even in vacation mode, Steve Jobs is still running the show.
…All the labels agreed except Sony Music. Its chairman, Mr. Schmidt-Holtz, wanted the pricing to go into effect right after the announcement, while Mr. Jobs wanted a longer time horizon. According to a person briefed on the telephone call, Mr. Schmidt-Holtz and Mr. Jobs had a heated exchange by phone on Christmas Eve. Eventually, Sony gave in and agreed to a longer waiting period. (So much for spending the holidays relaxing with the fam?)
Even without Jobs, in the negotiating, Apple still holds the upper hand and plays their cards well.
Even if Mr. Jobs does not get personally involved in future negotiations, music executives still fear dealing with Apple. One chit the company holds is the power of the iTunes home page, where it promotes music. They also say that the entire Apple staff, including Eddie Cue, the vice president in charge of iTunes who handles the relationships with the record labels, do their best to follow Mr. Jobs’s style in their own negotiating.
The final results seem to be pretty good for consumers. Higher quality songs without DRM.
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