It would appear to be a small thing. The band AC/DC will bypass selling songs [subscription required] on Apple's (NASDAQ: AAPL) iTunes and has cut a deal with Verizon (NYSE: VZ) to market its music on the cell service's handsets.
The band's label, Columbia Music said that the deal offered "a fantastic new high-tech platform" for music according to The Wall Street Journal. That is code talk for saying that the record companies are sick of Apple beating them up and taking their lunch money. They want alternative digital outlets so that they can eventually get better deals to sell their music through iTunes.
While the music companies are unlikely to loosen Apple's grip on digital music downloads, it is the one vulnerability that Apple's iPod profit structure has. The iPod sells because it is cool, well-priced, and is so easy to use that it can be operated by a chimp. But, the company hegemony has allowed it to dictate prices to an industry that is already in trouble because CD sales are dropping every day.
AC/DC may be nothing other than an aberration. Or, it could be the beginning of a little trend.
Douglas A. McIntyre is a partner at 24/7 Wall St.











Reader Comments (Page 1 of 1)
8-01-2007 @ 9:41AM
starwxrwx said...
I don't see why they want to do this - surely Verizon's user base is not only smaller than iTunes' (especially internationally) but the music will no doubt be MORE expensive (hence less people will buy it - surely that has to be true) and more difficult to transfer to other mediums (if you can even get it off your phone! Will it require Windows? Can you burn a CD from it? What is the quality?)
I'm sure more bands (that is, their labels, who make the money) will pursue higher priced services, but why would they want to offer to LESS people? If they offered music on Verizon as well as in iTunes, then they would also get the few people who pay for the convenience of one-off mobile downloads, but I doubt anyone who wants the whole album needs it RIGHT NOW before they can get to a computer and get it cheaper.
8-01-2007 @ 10:29AM
Jeff said...
starwxrwx, in your reasoning you say you doubt that "doubt anyone who wants the whole album needs it RIGHT NOW" (referring to needlessness of purchasing on a mobile phone)
so if they can wait, why can't they just buy the physical album at a store?
8-01-2007 @ 11:03AM
george said...
On the heels of Emenem's announcement yesterday comes this bombshell.
I surmise we'll be hearing from all of the "career over and out" types with similar announcements, look for Vanilla Ice's announcement tomorrow.
8-01-2007 @ 3:35PM
mongul said...
"I'm sure more bands (that is, their labels, who make the money) will pursue higher priced services, but why would they want to offer to LESS people?"
Because if the catalog was on iTunes, nobody in their right mind would buy those songs on Verizon Wireless for a higher price. Apple is reluctant to raise the iTunes prices, except for DRM-free songs, and record labels must find other music stores to do so, even if Verizon is less popular than iTunes, the 3rd largest music retailer in the US. Columbia Music has signed an exclusive 8-month deal. If their sales aren’t strong on Verizon the price increase will not prove profitable.
8-01-2007 @ 3:38PM
Veronica said...
Lemmee see if I got this right... I want to download songs from Verizon into my regular cellphone (with very little memory), instead of into my computer.
So now they're a real pain to make mixes from, or store in any quantity... AND I get to do all this for a higher price.
Somebody is for sure on drugs.
Veronica
8-01-2007 @ 4:15PM
mongul said...
http://weblogs.jupiterresearch.com/analysts/card/archives/2007/08/whos_advising_a.html
Wow, according to Jupiter Research:
"Who's Advising AC/DC?
- Albums are overpriced - $11.99
- Only one single is available, everything else is album only"
8-01-2007 @ 5:02PM
Richard Driver said...
Douglas, you are certainly on to something about this being an aberration. If the band signing with Verizon was a more current (and ultimately more profitable at the moment) it might have a better chance at succeeding. As it is, it seems that a band like AC/DC is not churning out hits lately and any success would be limited due to a set fanbase rather than a growing one. It could become a trend, but it would require an artist not relying on a 25 year old catalog.
8-01-2007 @ 9:40PM
starwxrwx said...
Jeff - sure, that's a good argument (waiting to buy from a store), but downloading at home can still be quicker (or more convenient, eg in your pjs) than finding a store (but doesn't have quite the same "I'm on the road and want it now" fix mobiles provide).
Looking into the situation in more detail though, it seems you CAN buy from your computer, in fact it almost seems as though you can't buy the albums from your phone (one article says 'buy on your comp and sync to your phone'). Since you can only get whole albums (apart from one promo) downloading over the cellular networks (without 3G) will take forever!