The price is right

AT THEIR annual bunfight at the Midem conference in Cannes, reps from the music industry are training their sights on Apple's iTunes Music Store. Sales of all recorded music fell slightly last year, but online revenues - in particular from iTunes - increased threefold.

For the last few years, industry chiefs have been giving it the "piracy is bankrupting us" line, but that's just not sticking any more. With the pirates (sort of) under control, the industry is now more cognizant of its own failings. Certainly, mobile phone/ DVD/computer sales eat into their pie and there's nothing they can do about that except buy up the relevant companies.

It's no wonder that industry accountants are worried: iTunes now outsells some of the biggest traditional retailers. In figures just published in the US, iTunes was ranked No 7 in the top 10 list of music retailers. This is above Tower Records but below Amazon and Wal-Mart, and the gap is closing.

ITunes is responsible for about seven out of 10 of all global digital musical sales. The majors are looking at these figures and trying to renegotiate their contracts with Apple - as in they sell their catalogues to Apple to put up on iTunes at a certain price. Both sides are getting all macho about it: last year, after handbags about pricing, Apple launched its new Japanese iTunes site without the Sony/BMG catalogue.

At Midem there's been a bit of a putsch, with all the industry delegates singing from the same copyrighted hymn sheet. Warner chief executive Edgar Bronfman opened the assault by noting, as only CEOs can, that "not all songs are created equal and not all albums are created equal".

Warner and the other majors want Apple to allow some pricing flexibility on iTunes. Decode the word flexibility and you get "we want to charge more".

According to Bronfman, "There's no content in the world that doesn't have some price flexibility." Well, yes there is, Mr Bronfman. It's called iTunes, which operates a popular flat rate: all singles and most albums are the same price. "This is not to say," he went on to say, "we want to raise prices across the board. But there are some songs for which consumers would be willing to pay more - and some we'd be willing to sell for less".

Apple has already called the majors "greedy" and, in a significant PR coup, vowed to resist price increases. The power struggle will continue.

What's really remarkable about the attitude of the majors is how they spent years lecturing us on downloading legally and then, when a hugely popular legal download site comes along, they want to mess around with it. The majors already make a tidy sum from iTunes, mainly because their manufacturing costs have been removed from the equation.

To be fair to the majors, they say they're under pressure from their artists and, crucially, the artists' publishing companies to press for a price rise.

If iTunes does bring in variable pricing, it's predicted that people - exasperated by being punished for following the letter of the law on legal down- loading - will scurry back to the pirate sites.

Whatever your own opinions about Apple and their provision of legal digital music, there's no arguing that iTunes has played a significant part in halting the growth of piracy. To jeopardise that now would be retrogressive and damaging for most everyone in the industry. A ship of fools? Wait and see.

bboyd@irish-times.ie