More Artists Steer Clear of iTunes

More Artists Steer Clear of iTunes
Apple's Online Music Store Sells Lots of Singles,
But Labels Seek Higher Profits of Full Album Sales

ITunes has been the runaway hit of the music business, selling more than five billion song downloads since it started five years ago. But a growing number of record companies are trying to steer clear of Apple Inc.'s behemoth music store, because they say selling single songs on iTunes in some cases is crimping overall music sales.

Kid Rock's "Rock 'n Roll Jesus" album was kept off iTunes' virtual shelves. It has nonetheless sold 1.7 million copies in the U.S. since its release last year -- a sizable number for the depressed music industry. Sales of the album have increased in 19 of the past 22 weeks, according to Nielsen SoundScan, vaulting it to No. 3 on the Billboard 200 sales chart. After witnessing the album's performance, his label, Warner Music Group Corp.'s Atlantic Records, last week yanked an album by R&B singer Estelle from the iTunes Store, four months after it went on sale there -- and the same week that one of its songs entered the top-10-selling tracks on Apple's download service.

Avoiding iTunes runs against the conventional logic of the music industry, where it's now taken as an article of faith that digital downloads will eventually replace CDs. But there is growing discomfort with the dominant role iTunes already plays: The store sells 90% or more of digital downloads in the U.S., according to people in the music industry. At the start of this year, iTunes become the largest retailer of music in the U.S., surpassing Wal-Mart Stores Inc., according to research firm NPD Group Inc.

Label executives, managers and artists chafe against the iTunes policy that prevents them from selling an album only. ITunes, with few exceptions, requires that songs be made available separately. Consumers strongly prefer that, though Apple also typically offers a special price for buyers who purchase all the songs on an album.

Some artists see their albums as one piece of work, and don't want them dismantled. Their handlers believe they can make more by selling complete albums for $10 to $15 than by selling individual songs.

"In so many ways it's turned our business back into a singles business," says Ken Levitan, Kid Rock's manager. Mr. Levitan says the rise of iTunes is far from being a boon to the industry; instead, he calls it "part of the death knell of the music business."
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An Apple spokesman declined to comment.