14 DAY TRIAL // Next month, is going to be sitting down with the major record companies to negotiate again. However, unlike previous times, it is not going to be a head-on clash. Apple's deal with the EMI Group, the third-largest record company, has created a precedent, which the other companies cannot simply ignore. Furthermore, Jobs no longer faces a united front when coming forward with ideas such as DRM free music.
Undoubtedly, Universal, Sony BMG and Warner will want to steer the negotiations towards variable pricing for songs, a subscription service for iTunes, and more bundling of tracks and other features into digital packages. Jobs has had to face this before, and so far has proved that all these things that the labels want so dearly simply do not work from the customer's point of view. But Jobs won't have such a hard time now, as EMI undoubtedly sees things the way he does. This leaves the others in a tough spot. Since they can't just let EMI run ahead with Apple for fear of being left behind, but they don't like what they are getting dragged into one bit.
Undoubtedly, with the iPhone on the horizon, the labels will be trying to worm their way in. Previously, they were after a cut of the iPod sales, as well as a bigger margin on the sale of digital songs. The iPhone promises to be just as big as the iPod, but it seems unlikely that Jobs will cave.
At the end of the day, Apple really holds all of the cards. The subscription model, that the record companies like so much because of the promise for recurring revenue is one giant flop, as proven by the market share of Napster, Yahoo, and every other such service combined. Not even the services that operate similar to Apple's iTunes are having any real success, as proven by Microsoft's Zune Marketplace. With the dominance of iPod, iTunes, and soon iPhones, the labels need Apple just as much as Apple needs their content.