November 26, 2004 4:00 AM PST

For Net music, exclusives are king

U2 singer Bono strode onto stage at Apple Computer's iPod release party last month with his trademark swagger and sunglasses, along with words of praise for the company and its music products.

In the online music business, where top artist exclusives are the subject of bitter competition, this was a singular coup. On the eve of a major record release, U2 was freely giving Apple the rights to use its first single in an iPod commercial, was lending its brand to a new version of the music player, and giving the company first crack at selling its new single and album online. Bono and guitarist David "The Edge" Evans even played a few tunes together at the release event.

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What's new:
A combination of idealism, fear and hunger for publicity is driving a cozy new relationship between the music business and young online music services.

Bottom line:
If any one online music service becomes the Amazon.com of downloadable tunes, the online world could well find its way to the "pay for placement" model that has periodically marked the radio and retail music businesses.

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Onstage, the understated Edge gave his take on why musicians increasingly are providing Apple and its online music rivals with unprecedented access to their work.

"When Napster first got up and running, I was immediately very excited, and appalled at where it might lead us," he said, praising Apple for finding the right response with its iTunes store. "People are using computers to store and listen to music. As long as we find a way for us to get paid, that is ultimately going to be a good thing."

This combination of idealism, fear and hunger for publicity is driving a cozy new relationship between the music business and young online music services, which insiders say is likely to define the online music industry for years to come.

For now, it stops short of money changing hands. The online services need exclusive content too badly to risk losing it by charging advertising or promotion fees for prime placement. Moreover, they control too little of the overall music market to have much leverage.

Nevertheless, the winners of today's competition for eyeballs and online customers may ultimately have a very different role. If any one service becomes the Amazon.com of downloadable music, the online world could well find its way to the "pay for placement" model that has periodically marked the radio and retail music businesses.

"It's as certain as fleas on a yard dog," said Phil Leigh, an analyst at Inside Digital Media. "It's probably years away, because the industry is not yet highly dependent on the online distributors...But brand recognition in cyberspace is going to become important, and the labels themselves are going to be influenced by wanting to deal with the brands that get the most traffic and recognition."

Other mediums have slipped quickly into money-for-placement models. The commercial radio business was rocked by payola scandals in the late 1950s and early 1960s, after it became widely known that record labels were paying disc jockeys, ostensibly to play their music. One prominent DJ, Allan Freed, was indicted.

Nevertheless, insiders said pay-for-play arrangements using independent record promoters as middlemen continued long

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interesting...
Isn't interesting that this article only mentions apple's exclusive content when MSN and others did it first with artist such as AC/DC and The Monterey Jazz Festival?

Bring it on trolling zealots!
Posted by (30 comments )
Reply Link Flag
your precious pentium has a ways to go
yeah... no one's responding cause no one cares. iTunes is still a better and slicker service than any of the other off-brand excuses for a music store. i'm happy with apple's iTunes and if you don't like it, thats fine. i don't care if you use it or not. but don't march around pretending that you've got something on them that you don't.
Posted by Dibbs (158 comments )
Link Flag
interesting...
Isn't interesting that this article only mentions apple's exclusive content when MSN and others did it first with artist such as AC/DC and The Monterey Jazz Festival?

Bring it on trolling zealots!
Posted by (30 comments )
Reply Link Flag
your precious pentium has a ways to go
yeah... no one's responding cause no one cares. iTunes is still a better and slicker service than any of the other off-brand excuses for a music store. i'm happy with apple's iTunes and if you don't like it, thats fine. i don't care if you use it or not. but don't march around pretending that you've got something on them that you don't.
Posted by Dibbs (158 comments )
Link Flag
"Vertigo" Sucks!
What the hell. Sorry, but Apple is not the first to do the "exculsive" thing. In case no one remembers, Sony Connect did the exclusive with Macy Gray's remake of "Walk this way", and they used it in their commercial too. I'm sure "Walk this way" has outsold "Vertigo", since "Vertigo" has got to be the SH!++!EST song of 2004! Get over yourself Apple...
Posted by PCCRomeo (432 comments )
Reply Link Flag
"Vertigo" Sucks!
What the hell. Sorry, but Apple is not the first to do the "exculsive" thing. In case no one remembers, Sony Connect did the exclusive with Macy Gray's remake of "Walk this way", and they used it in their commercial too. I'm sure "Walk this way" has outsold "Vertigo", since "Vertigo" has got to be the SH!++!EST song of 2004! Get over yourself Apple...
Posted by PCCRomeo (432 comments )
Reply Link Flag
 

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