According to multiple sources to Digital Music News, Apple is considering penalizing any iTunes Radio holdouts (music publishers/labels) by removing them from the iTunes Store.
Apple is reportedly pondering the strong-arm tactic, according to multiple executives at digital distribution companies speaking in confidence to Digital Music News: “At this stage, we’re chasing down the chatter: earlier, one whisper pointed us to a letter from The Orchard stating that Apple would be removing the content of iTunes Radio holdouts. The Orchard executive Jaclyn Ranere subsequently told Digital Music News that those reports were erroneous. “I oversee all client communications and this is not something we ever wrote about,” Ranere said. The Orchard is among the largest digital distributors in the space.”
Separately, UK-based distributor AWAL Digital may also be alerting clients. “According to my label’s distributor (KOBALT/AWAL), from what they have managed to learn from Apple so far, it seems like you won’t be able to have releases in the iTunes Store if you don’t accept iRadio as well,” commenter “Tony” posted in a DMN earlier story about Merlin’s complete absence at the iTunes Radio negotiation table.
Other distributors are apparently aware of the possibility, though Apple has not confirmed any decisions. Another source actively reviewing the iTunes Radio contracts (and sharing ample details with DMN) admitted to the tying possibility, but could not confirm anything at this stage. “Seems as if AWAL made a similar comment as The Orchard,” the source noted. “I’m not willing to confirm that as yet…But it feels entirely plausible that iTunes will decide to make it an ‘all-or-nothing’ deal. That would be consistent with their gestalt.”
RBR-TVBR observation: We’ve checked with Apple to see if there’s any truth to this, but haven’t heard back yet. If it’s true, this is just plain stupid. Perhaps the interest in iTunes Radio’s upcoming launch is so low that Apple figures a make or break/hail Mary run is its only option here. But talk about putting one of your core businesses and industry relationships in jeopardy!