When Apple announced at Macworld that iTunes music would be DRM-free the company also collapsed to demands from the industry to introduce a variable pricing model. Many saw the move as a sign that Apple and the music industry members were getting on better but a recent article by the New York Times reveals that this is not the case.
According to the report Apple offered the music labels a variable pricing deal in Spring of 2008 that would go into effect April this year, in return Apple would be able to deliver music downloads over-the-air via the iPhone and all files be DRM-free.
The only label that didn't agree to these terms was Sony Music whose chairman Rolf Schmidt-Holtz wanted variable pricing to go into effect immediately upon the announcement of over-the-air song downloads
Disagreements over the timing of the changes also resulted in a particularly tense conversation on Christmas Eve between Steven P. Jobs, the chairman and chief executive of Apple, and Rolf Schmidt-Holtz, the chairman of Sony Music.
According to a person briefed on the telephone call, Mr. Schmidt-Holtz and Mr. Jobs had a heated exchange by phone on Christmas Eve. Eventually, Sony gave in and agreed to a longer waiting period.
The article also goes onto to cover Apple's ability to stronghold the industry, in particular Apple's control over the iTunes front page.
"Whether the industry likes it or not, the iTunes chart showing the most popular songs in America is a major influencer of how kids today discover and communicate with their friends what kind of music they like," said Charlie Walk, the former president of Epic Records, a unit of Sony Music. "It's a very powerful thing right now in American pop culture and immediately validates a hit song."