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Record Labels Push for iTunes Price Hike
csteinle writes "Looks like the major labels are getting their own way again. The New York Post reports that the price per track may be going up to $1.25, while the per album price for some albums could go as high as $16.99. The Register has its own take on this, too. Aren't you glad you starting paying for downloaded music?" Update: 05/07 19:15 GMT by M : Apple says their prices won't increase.
It's a pretty cheap service, but some doubts were brought up whether Americans could legally use the service.
It charges 1 cent per MB of downloading, and it works out to about 5-8 cents per song. You can choose your encoding (mp3, ogg etc.) and bitrate. Allofmp3.com
I'd recommend reading the Register's take on the story rather than the Post's: it has more facts right and doesn't have a flashing Howard Stern advert. Anyway, Steve Jobs also mentioned the issue in a recent iTunes conference call- here's what he said (credit goes to www.macrumors.com):
"But in any event, most of the albums on iTunes are priced at $9.99 and below and, no, they're not creeping up. There's always a few that are a little higher than you can go in and pull out, but they're very, very competitive and we see in the future the prices of the albums coming down, not going up, because that's what it's going to take to sell more albums and it's in everybody's best interest to do so."
So, it's definitely a label vs apple thing. Anyone know who would get the extra money from the price hike, and in what proportions?
p.s. The journalism in the Washington Post is just "great". I quote,
"Apple's willingness to allow some singles to be priced higher than 99 cents indicates the company feels empowered by its current success in the download market and sees a chance to boost profits from the sales of digital music."
Where'd they get this information, you may ask? Did they perhaps pull it out of thin air? Immediately preceeding this, "Spokespersons for the major record companies declined to comment. A spokesperson for iTunes was not available for comment."
Nice.
So instead of whining about how some big major-label Universal album (where the artist hardly gets paid anyway) is DRM'd or expensive, be an independent thinker and go try some of the smaller services.
Emusic
Website for Mac, Windows, Linux where members can download up to 40 tracks per month of high-quality MP3 files. Has been around for YEARS doing both 99-cent downloads, and all-you-can-eat downloads for paid members. Has great catalog of indie label music - company is currently reforming.
AudioLunchbox
One of the first all-independent music download sites. Tracks retail for 99 and albums retail for $9.99. ALB pays out 59 per song and $5.90 per album.
NetMusic
Digital download and streaming service. We get 65 cents per downloaded song. Entire-album downloads usually retail at $9.99.
Emepe3.com
Website that primarily targets Latin America, USA and Spain. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.
Etherstream
Website that offers a la carte downloads. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.
Music4Cents
Retails independent music at very reasonable prices. Pays 55 cents per download. Sells independent music - they will sell CD Baby songs at $.69.
QTRnote
Artist gets about $.64.
TriaSite
TriaSite retails independent music downloads. Pays $.65 per download
Puretracks
Canada-only service that offers $.99 downloads. Website is currently available to Candian residents only. Puretracks is acting both as an online download retailer and a back-end service provider for other retailers. Downloads cost $.99 per track - artist gets about $.59 per track.
CatchMusic
Download site focusing on independent music. CatchMusic sells a la carte downloads at $1 each. Songs retail at $1 - artist gets about $.55 per song.
Viztas Digital Marketplace
Viztas Digital Marketplace will sell all kinds of digital media - not just music. Tracks retail for 99 and albums retail for $9.99. Vistaz pays out 60 per song and $6.10 per album. Viztas has not yet launched.
DiscLogic
A la carte downloads. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.
"Retroactive price hikes... now possible under the DMCA!"
The DMCA may be a terrible, terrible thing, but it doesn't legalize *everything* a geek hates. Anything resembling a retroactive price hike would bring lawsuits and are not obviously legal under the DMCA.
Yes, it's horrendous, but no, it doesn't make things normally illegal, legal. It 'just' makes certain normally legal things illegal.
RD
You mean, like these guys?
Tell them how you feel.
http://www.apple.com/feedback/itunes.html
Keep the Classic Slashdot.
Just to provide some solid numbers:
"Major label artists will end up with only 8 to 14 cents per song."
For more data on how the money from ITunes is distributes, see this page from Downhillbattle.org.
EVERYDAY IS CATURDAY
I have found Magnatune to be very good. Not a massive selection, but at least they are all of good quality. No "dork-in-the-basement-with-a-keyboard" like some other free music sites have. Some of these are really good. "Brad Sucks" is interesting, "Rocket City Riot" and "The Napolean Blown Aparts" are good ol' rock-n-roll. I am sure there is more there, I just haven't gotten through it all yet.
Check it out.
My beliefs do not require that you agree with them.
Sony's (one of the Big 5 record labels) Sony Connect music download service launched 5/5/2004. The price point is $.99 for singles and $9.99 for albums.
The same week we get reports that the Big 5 has successfully managed to pressure Apple to raise their prices.
Coincidence? I don't think so.
Proletariat of the world, unite to kill RIAA
In Soviet Russia, I ruled you
I think Apple is in the driver's seat on this, so I bet the price will not be going up...
Solution:
a: Check the local library for your CD. If it's not there...go to step B.
b: Buy used CD's
c: When you are done "listening" to your used CD(s), donate them to their local library.
Pretty soon the Library will have a decent collection for everybody!
Yes, CDBaby is an a great company. My group, Dancing Baptists, is with them and they've distributed us to Itunes, Napster, Tower Records, and many others. We get a full half of our sales. For every 99 cent song we sell on Itunes, we get about 50 cents. Moreover, we sell 7.99 CDs on CD Baby's store, and we get $4.99 each. A wonderful service. Soundclick.com is also a great neo-MP3 like site, probably the most active, and does not steal the rights to our music.
Typically, artists get $1/CD, or about 1/16th of the selling price (after the labels recoup all sorts of insane costs). Assuming the same distribution of money, the artists *should* be getting somewhere between 99/16 and 70/16 or between 6 and 4 cents per song (depending on their contract).
Actually, IIRC, it should be higher. Artists contract for a royalty on the price _as sold by the company_.
So, if a CD has a 50% markup and the artist gets a dollar from a $16 CD, they're getting a 12.5% royalty. Which, when applied to the $.70 label cut, means that they get 8 3/4 cents per song sold.
All in all, 12.5% royalty doesn't seem that bad--unless the record companies do what some claim they do, and attempt to recoup their initial expenditures from the royalty, rather than the gross profit from each individual sale.
And our first question today will come from Steven Levy with Newsweek.
Steven Levy: Hi, Steve.
Steve Jobs: Hi, Steven. How are you doing?
Steven Levy: Good. How are you? Congratulations for the year. A couple questions, related questions, about the negotiations with the labels there. One, was there any discussion from their point of view of changing the price? We've been hearing about how the labels might want to get more for online songs. And second, did they ask you to make the songs purchased on the iTunes store playable from other devices? In other words, ask you to license FairPlay to other third parties?
Steve Jobs: Great. Let me answer those two things. First one is the price for songs in the iTunes store is remaining 99 cents per song, and we think that's what customers want and that's what we're delivering. So the prices will remain 99 cents per song and any rumors to the contrary are simply not true.
And secondly, no, it never came up in our discussions with the labels that they would like songs purchased on the iTunes Music Store played on other portable music players other than the iPod. Possibly that's because the iPod is the most popular portable digital music player in the world with close to a 50 percent market share of all MP3 players on the market, including even $50 Flash based players. So, as you know, the iPod has grown into a billion dollar business in a little over two years and we ship more than three million iPods to date with more than 800,000 iPods sold last quarter alone. So you know, it's hard to even say who number two would be.
Steven Levy: And the 99 cents, that didn't come up either? Basically that was something that was assumed it would not change?
Steve Jobs: Well, I'm not going to go into details about our negotiations with music companies except to say that Apple and the music companies are offering these songs on the iTunes Music Store for 99 cents a piece, same as always.
Steven Levy: OK. Thanks, Steve.
Burn Hollywood Burn
Apple on Friday denied a report that the computer maker was planning to raise prices for songs bought on its popular iTunes online music store, according to Reuters. "'These rumors aren't true," said Apple spokeswoman Natalie Sequeira. 'We have multiyear agreements with the labels and our prices remain 99 cents a track.' Apple's statement came after the New York Post reported on Friday, citing one unnamed source, that music fans may have to start paying more for some songs on Apple's music store following contract renegotiations with the record labels ahead of the one-year anniversary of the store.
- MacNN
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