And here I thought everybody liked me

Despite the fact that it’s sold billions of songs and temporarily resuscitated the flagging, change-phobic music industry, not everyone is a fan of iTunes, particularly veteran rockers AC/DC. The band is among the few major acts whose music is not available on iTunes (the Beatles are among that select group), and that isn’t changing with the release of the band’s new album, Black Ice, next month. So why do Angus and the boys hate iTunes so much?

“We don’t make singles, we make albums,” says guitarist Angus Young. “Way back in the Seventies, we drew these figures on the back of an envelope for our record company.

“We showed them how much they earned from us if we sold one million singles and how much they earned if we sold one million albums. The difference was staggering.

“That was to get them off our back because we only very grudgingly release singles. Our real reason is that we honestly believe the songs on any of our albums belong together.

“If we were on iTunes, we know a certain percentage of people would only download two or three songs from the album – and we don’t think that represents us musically.”

He’s got a point. Since launching in 2003, iTunes has sold over 5 billion songs, but that’s the key word – songs. Most people now tend to buy singles on iTunes and not the actual album, if only because the single they heard on the radio is really all they want. This leads to eye-popping figures, like Katy Perry selling 2.2 million downloads of “I Kissed A Girl” while only moving 282,000 albums. That sort of massive disparity didn’t used to happen with singles and albums until iTunes came around.

And sure enough, of the current top-selling back catalogs, AC/DC and the Beatles are at the top of the list despite neither being available on iTunes. Depending on how successful Black Ice ends up being, this could have an effect on how the record companies view iTunes. Some could choose to pull material off of iTunes altogether in the hope that people will go out and buy the album in a store, translating to more money in the record companies’ pockets, as selling a $12 album in a store is a much larger profit margin than one to three 99 cent songs. And when people have a choice between buying a single song and a full album on iTunes, they seem to overwhelmingly favor singles. If people didn’t have a choice, however, that would put a whole lot more money in the record companies’ pockets.

On the flip side, companies that want to stick with iTunes may demand that their albums be “locked.” That is, people would no longer be able to buy single tracks and would be forced to buy full albums, once again translating to increased profit margins.

It’s a catch-22 for the record companies. On one hand, they’re still selling tons of singles, but on the other, they could be making more if they forced people to (once again) buy full albums. Obviously, they need to make as much money as they can, if only to stay afloat, though I’m not sure how well a backward strategy like this would work. I think it could certainly pay dividends for a big act like U2 or Coldplay that is already well-established.

But when smaller, less-established acts are involved, there’s the possibility of this strategy backfiring terribly. Take the case of Estelle’s hit single “American Boy” earlier this year. According to the Telegraph, Warner Bros. decided to experiment with how influential iTunes was and pulled Estelle’s album, Shine, off of the online store.  Therefore, the only way to get the album and, more importantly, the single, was to buy the album in an actual store. It didn’t exactly work out.

The predictable happened: Estelle’s US sales figures plummeted, and hilariously (if you weren’t Estelle or Warners) a limp cover version of American Boy by an act called Studio All-Stars soared up the iTunes download charts in Estelle’s absence.

People were more inclined to spend 99 cents on a shitty cover song rather than go out and pay $10-12 on an album they didn’t really want just to get the legitimate version. If there’s any clearer evidence of the effect iTunes has had on the buying habits of music consumers, I’d like to see it.

If the record companies do decide to throw caution to the wind, they need to do it on a case by case basis. It’s clear that there’s more money to be made by forcing people to buy entire albums, but they’re asking for trouble by doing this with less-established acts. Sure, “I Kissed A Girl” sold 2.2 million singles and about one-tenth that number of albums, but if this were ten years ago those numbers all would have been album sales – people just didn’t buy singles the way they do now. Newer acts need the ability to push a hit single, because the way the market has changed, that’s what everybody really wants.

To a large degree, iTunes killed the album, but there’s one thing about death: once something is dead, you can’t bring it back. Try as they might, the old business model is worm food. Without the ability to push singles and, more importantly, ring tones (the true cash cow of the music industry), new acts would have even more difficulty breaking through.

Then again, the record companies are all about making things difficult for themselves, so it wouldn’t be the first time.

iTunes under threat as bands take their business elsewhere [telegraph.co.uk]