Comment Re:how does Apple do it? (Score 1) 368
I'd have to see the artist's contracts but it is pretty scary if the label has all the power to negotiate something like that. The songwriters, artists etc are supposed to get royalties having the label decide to give away free samples is insane. I want the movie industry to do the same thing: I'll pay them the second time I watch their movie.
The power that the labels have is very strong. It's hardly scary to know that they hold all the cards - why do you think the rise of indie labels has been greeted with such enthusiasm by artists.
In this case, what Apple did was exchange a longer free period for higher per-song royalties after the free period ends, but it does this on a per-label basis and clearly hammers out these sorts of deals with the biggest ones first. The smaller labels and indies can negotiate different deals if they like, but do you think they'll be able to do better than Sony, for example, will be able to manage (making the assumption that Sony will press Apple for the best deal that is good for Sony)? They can't deal directly with the artists even if they want to because the rights to the music aren't owned by the artists themselves.
The fact that the music labels hold all the cards is separate issue - artists have been getting the short end of the stick since long before Apple was even allowed to compete in the music business by law (hello Apple Records vs Apple Inc lawsuit).