Why record companies fear Apple

Stan Beer
Thursday, 15 February 2007 03:16

Opinion and Analysis

The news that the powerful Coral Consortium, an elite group comprising the world's largest recording and movie studios, has issued an open letter to Steve Jobs asking Apple to join its ranks shows how scared the music companies are of his anti DRM statements.

"We have been wrestling with the issues around interoperability for some years and have concluded that it is not so much a technology problem as a business problem," wrote the consortium to Jobs. No kidding? And all along the world at large thought downloading DRM-free MP3 files presented huge technical issues.

Seriously though, late last year Apple itself gave a few of us media folk a glimpse of why record companies fear the computer turned consumer electronics company.

At the Apple Australia Christmas party in Sydney, a young band treated us all to a couple of songs. They were pretty good and in between songs the lead singer gave the obligatory Apple plug. However, what he said was actually pretty interesting.

It turns out that the band was unable to get a contract with a record label but was able to sell its music through iTunes. "We want to thank Apple and iTunes for enabling us to get our music heard," he said - or words to that effect.

And there in a nutshell is why record companies fear, or should fear, Apple, Microsoft or anything other company with the resources to put up an online music store with global reach.