From BusinessWeek.com : In June, three of the five major music labels — Universal, Sony, and Warner Music — announced that they would make thousands of songs available for download over the Internet at the discount price of 99 cents each. Better yet, in a major about-face Warner Music agreed to let buyers of many of the songs, by both new artists and established acts such as the Red Hot Chili Peppers and Alanis Morissette, copy or transfer them to portable MP3 players. Sony and Universal’s music was released in copy-protected format.
Industry analysts hailed those moves as a giant step forward — a sign, at last, that the music establishment is beginning to “get it” when it comes to cashing in on the Internet as a distribution vehicle for music.
But…
It turns out that major retailers — the companies that actually sell music to the public — haven’t yet signed up to promote the 99-cent downloads, either in-store or online. The reason, according to sources close to the negotiations between music companies and retailers, is the labels’ onerous demands. In exchange for offering up popular songs cheap, the music companies want retailers and resellers to hand over valuable customer data — or even let the labels handle the online transaction in its entirety.
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