The labels are getting greedy and are threatening to "cut off" the iTunes Music Store if it doesn't increase the pricing of the songs.
Digital strategy chief Michael Nash said during a discussion at a wireless telecoms conference that the music industry has let Apple get too much power in the digital downloads market.
'What if Jobs says 39 cents or 29 cents per download - what then?,' he said. 'The industry can say, OK we'll cut him off - very few people buy music from digital downloads.'
He added that he is sure that the Apple CEO would find another way to sell iPods.
Nash's comments echoes those made last week by Warner CEO Edgar Bronfman, who called for Apple to adopt variable pricing and share out revenues from iPod sales.
The record companies' position is based on the dubious argument that digital downloads sell iPods. In fact all the evidence points to the opposite: that iPod sales have driven demand for downloads. The vast majority of digital music sales are made by iPod owners. Cut off Apple and the labels digital sales will slump.
Note that there is not a single reference to what the consumers want.
This is an industry that has seriously lost touch with its customers. I'm sure if iTunes Music Store were to offer 39 or 29 cents song downloads the customers would be ecstatic.
The iPod was already a best-seller before iTunes started offering songs for download, so even if iTMS were to stop operations, unlikely as it is, things shouldn't alter significantly.
The labels also don't seem to understand that they're dealing with His Steveness. This is someone who has a singular focus and a lot of balls; axing his best selling product, the iPod Mini, which is barely a year old, with the iPod nano.
So if things really spiral into a legal battle, I'm resolutely in His Steveness's corner.
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