Engadget tells us “Labels ask for share of iPod Revenues”.
High level issues:
- Labels cite the flat-rate is unfair; some songs should cost more than 99 cents.
- Apple is keeping the price of downloads low “artificially”; allowing customers to only purchase the songs they want instead of an entire album. This doesn't contribute as much revenue to the labels as they'd like.
Interesting stuff; check out the Red Herring article.