TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Macworld: A year after iTunes Plus, Apple faces stepped-up competition

But for all that they appear to have embraced DRM-free music, Sony, Universal, and Warner continue to withhold the unencumbered tracks from Apple, choosing instead to back iTunes’s rivals. It would seem that Steve Jobs’s proposed future of DRM-free music has quickly become a reality—if not in quite the way he envisioned.

Interesting point, and the article ends with precisely the question I think is most pertinent: who can last longer, Apple or the labels? Apple’s iTunes Music Store, despite the rise of competitors, is still, without peer, the dominant online music store.

It is also important to remember why the music labels are attempting to build up iTunes competitors. They aren’t doing it out of some idealistic belief in competition; they are doing this because iTune’s dominance gives Apple strong negotiating power, whereas if there were many outlets for music, the labels could set their own terms. If one music outlet refused to accept their terms, they would simply say, “Well, that’s too bad. I suppose we will have to do business with music outlet x, then, because they’ll sit there and take our abusive demands…”

And with that, labels would be back where they were before: in a position to dictate to whoever the hell they want.