Indie labels reject iTunes

But AOL is backing Apple

By Tony Smith • Get more from this author

Posted in Financial News, 15th June 2004 14:40 GMT

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Apple's European iTunes launch went ahead today without the support of some of the UK's biggest independent labels.

A spokesman for the Association of Independent Music (AIM) confirmed this morning that talks between Apple and the organisation, which represents key UK indie labels, including Beggars Banquet and XL, had broken down.

"A lot of labels haven't been approached but where Apple has spoken to labels the terms on offer have been commercial suicide," he told The Guardian newspaper.

At the iTunes Music Store (ITMS) launch, Apple CEO Steve Jobs said the store's 700,000-strong catalogue features tracks from "dozens" of indies.

Independent labels account for around a quarter of the UK music market. They claim Apple has tried to enforce too strict a licensing regime. Financial terms are part of the problem, it seems, as are Apple's demand for three-year licences.

"This is just another example of a monopolistic American company trying to dictate terms," a source at one leading independent label told the paper.

"Most independents have similar concerns. None of the key UK labels have signed and the situation is similar in France."

AIM has licensed some of its members' content to Apple rival Napster and to UK digital music provider Wippit. That level of exposure to downloaders willing to pay for songs may be enough to satisfy some labels, but with Apple claiming a 70 per cent market share in the fledgling online music arena, others may feel the need to reach an agreement.

Apple is understood to have secured global licensing deals with writers and publishers who operate under the auspices of MCPS-PRS alliance in the UK, SACEM/SDRM in France and GEMA in Germany.

Meanwhile, AOL Europe announced today that it has agreed to connect its AOL Music channels in the UK, France and Germany to Apple's national iTunes stores. AOL members can log into ITMS using their own screenname and password, and music-related links within AOL's music channels take user straigth to ITMS.

AOL claims to be the UK's most visited music-related site, attracting over 1m unique vistors a month.

In the US, AOL provides downloads of its own, through digital music distributor MusicNet. That deal is not exclusive, and neither is the European arrangement. ®