Apple's Digital Album Effort Irks Labels

This story was written by CNET's Greg Sandoval.

When news broke late Sunday that Apple has plans to create the next-generation music album, some in the record industry were steamed.

The Financial Times reported that Apple was working on a plan code-named "Cocktail" that involves the creation of "new type of interactive album material, including photos, lyric sheets and liner notes that allow users to click through to items that they find most interesting." That's nearly identical to a plan that executives from some of the four largest music labels pitched Apple about 18 months ago, said a music industry source who requested anonymity.

Even as the music industry cooperates with Apple's efforts, what has some insiders upset is that Apple rejected the labels' plan. By seizing credit, Apple is being "disingenuous," said the source. He added that Apple's attempt to develop a proprietary technology around the new interactive album is an example of the company once again falling back on "the walled garden approach."

What he was referring to was how users of Apple's iPod were prevented from playing songs wrapped in digital rights management made by competitors. That effectively blocked anybody but Apple's iTunes from selling music files to iPod owners. Now, most download stores sell songs in the MP3 format and these DRM-free tunes can play on iPods and iPhones.

Apple representatives did not respond to an interview request.

But Apple's refusal to participate in the labels' plan didn't mean they gave up. The largest recording companies have continued to develop software that will help them release their own version of a new interactive album. Apple will have Cocktail, but Amazon and all the other competing services will get access to the labels' version, which will offer more content than Apple's, said the music industry source.

Apple plans to have Cocktail ready to launch by September, according to the Financial Times, and that's when the labels hope to have their version ready as well, said the source.

Both Apple and the top recording companies appear to be pursuing the same goal: rejuvenating the album, which was the benchmark sales unit that helped the music business generate billions of dollars over the past half-century. Up until the digital download turned the music industry on its head, the album was the standard means for music distribution. Even after the switch from vinyl to the CD, the album format was preserved, as most CDs featured about a dozen tracks.

Record industry execs have long said that there's no way to grow the business by selling single-song tracks. But the big labels have an uphill fight--many consumers may well resent any attempt to force them into paying a premium for packages that include unwanted tracks.
By Greg Sandoval
By Greg Sandoval
?2009 CBS Interactive Inc. All rights reserved

[dylan214u]

Lets see Mr. Sandoval, Apple should do all the heavy lifting of putting this together and give it away. Right? Sounds like a real business plan, now doesn't it. Making it something that everyone wants, and letting them use it without thoughts of making money on their investment. Think you should stick with reporting and not business tinkering.

[Samuel-HiLL]

Since the record companies no longer control all avenues of distribution, their business model of the past 50 years is no longer viable.

Trying to re-invent the album format is just another futile attempt by a dinosaur industry to maintain the status quo.

Musicians no longer need the labels to make quality recordings. They no longer need record stores to sell their music globally. They no longer need the record companies to promote their music, and most of all, they no longer have to play the label's games to have a chance at success. The recording industry is well known for ripping off artists, while claiming to protect them, but the jig is up, and we don't need them anymore.

The public no longer has to buy an album full of filler just to get the two good songs on it. They no longer need the labels to tell them what is a hit, and what isn't, and we certainly don't need the record companies, or Apple dictating what we can do with music we have bought and paid for.

What's new about the "new type of interactive album material"? All of those things were included on albums almost from the git-go. Supplying them in digital format does not make it "new" by any stretch. Anyone that knows how to use a search engine can probably find at least as much "newness" with a few clicks.

[SlothropRedux]

Just a couple of corrections. The biggest online seller of music, Apple's iTunes music store, sells music in the DRM-free AAC format, although other sellers use MP3. And when the iTunes music store started, there were NO other online sellers who were legitimately selling DRM-free music. Finally, the decision to put DRM onto music files was made by the music industry, not Apple. When the iTunes music store got started, there were several other online music sellers, and all sellers working with the major labels were REQUIRED to have DRM.

[wtw9]

That's not entirely true. Underground Records was selling DRM-free music files of it's own artists and of some of it's distributed labels in the late 90's. The same label developed something similar to what Apple is now proposing with the digital album back in the early 90's using Apple's Hypercard; the multimedia album was in a zine format with edited music tracks built into the zine/album format.