iTunes Close To Indie Deal

By | July 13, 2004 at 12:00 AM

Independent record labels are on the verge of striking an agreement with Apple Computer that will allow its iTunes music service to sell tracks by artists such as the White Stripes and Basement Jaxx across Europe.

A pact could be announced as early as today, sources close to the talks have told The Times, ending a feud that has kept independent labels off iTunes since its launch in the UK, France and Germany last month.

The new deal is expected to ease the concerns of independent record labels that they would be locked into long-term contracts at fixed prices.

The percentage cut that they receive from songs sold over iTunes is also expected to be closer to the rates received by multinational record companies such as EMI and Sony Music.

The royalty that Apple pays record companies from sales of songs over iTunes is a closely guarded secret, but is understood to range between 45 per cent and 60 per cent of the retail price.

Independent labels originally chose not to release artists on to iTunes because of what they thought were terms inferior to deals offered to major record firms.

The dispute triggered a brief war of words, with the independent companies accusing Apple of being two-faced, and Steve Jobs, Apple’s billionaire chief executive, calling the labels “mean and nasty”.

The absence of independent music from iTunes in Europe, where smaller labels account for almost a quarter of music sales, left iTunes a step behind rivals including Napster, OD2 and SonyConnect.

But iTunes, which this week sold its 100-millionth song, has far more momentum than its competitors. More than 800,000 songs were downloaded from iTunes in its first week of operations in Europe.

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