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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.
With the service agreement that they have for the iTMS, it seems already they can change the rules for the DRM (number of burns per playlist, number of computers, kinds of applications that will be allowed depending on available quicktime APIs, etc.
It wouldn't surprise me in the least if they start charging you to "upgrade" the privileges you have for the music you've already bought.... perhaps even charging you just to continue your rental - even though it was never part of the original deal, it seems the contract allows them to change whatever they want at any time, and their copy protection, backed by law, gives them the tools to do it. Retroactive price hikes... now possible under the DMCA!
For that price I'd rather go and buy the album and rip it myself. At least then I can choose the format I want. If an Audio CD is marked with a label that it might not play on anything else than my stereo, I won't buy it either. If this means I can't buy music anymore, well, fine with me, I'll keep listening to the CD's I already have.
Ahhh...the great dumpster continuum. Many a free computer will be found there. -- sowth (748135)
It was always a boggle as to why the Post Office didn't just go right up to 20 cents a stamp instead of the weird 19 cents. It would have increased revenues and forestalled, at a very small price to the consumer, the next price hike to 22 cents (22???).
Same thing here. Instead of going up to a nice round number like 1.50, they choose a number right smack dab in the middle. While the price may be temporarily lower now, we can expect that the next price increase will happen faster than if they just brought the cost up to a nice round number.
Something tells me that the marketing department is at work here. Nothing else could be so evil.
I have been pwned because my
Apple created a service where people that people would be happy to pay for because it finally offered music at a decent price.
So what does the RIAA do? They try to kill it by forcing Apple to increase the price until it is as expensive as a CD.
Basically destroys the whole purpose of the service, doesn't it?
"You spoony bard!" -Tellah
On a somewhat related side note, I am running for Congress in Nebraska. Conservative? Yes, I am. But, pro-technology, anti-RIAA/MPAA/DMCA? Darn right! Want real change? Vote Ringsmuth for Congress May 11 in Nebraska. That is the only way things will happen. If elected, I will do everything in my power to bring down these cartels.
"Support only the artists that allow the free taping and distribution of their music!"
Should how do I stop liking good music? It's not all crap in the industry, and the independents have a long way to go (even those with talent usually don't have decent production). Should I boycott Led Zeppelin now? I only buy used CDs, but since I actually like good music I can't just pretend that everything I own is "bad" because the execs are greedy.
G
Yes I am, you smug little turd. I pay for my music, my videos, my software, my books, whathave you. I know that the artists involved are often getting ripped off by their record labels. But that doesn't mean I am going to screw them even furter.
Boobies never hurt anyone. - Sherry Glaser.
The industry execs truly need to be slammed in the head repeatedly with a clue-by-four. They haven't just shot themselves in the foot, they've dived onto a landmine.
Let's face it, the RIAA member companies are approaching if not already at redundancy. They are the ones depriving artists of their fair share of what they created, they are little more than middlemen. If they got out of the way artists could make more money while selling their music considerably cheaper than it is now.
Somehow their massive FUD campaigns have convinced people that the RIAA is the artist, and that the labels should be compensated for "their" creations. I'm not saying that the true creators shouldn't be compensated, but the RIAA member labels sure as hell aren't the creators of the music, it's the artists who do that.
They should be breathing a sigh of relief that artists still want them, they should be thanking $diety that the public still have few other choices than to pay them for music and they should be grateful that people still think it acceptable to pay them for other people's creations. Finally a reasonable compromise with not-too-bad (although not too good either) DRM is implimented and becomes popular. The RIAA tries to destroy it rather than embracing what could be their last chance - if the RIAA take on Apple, they may win. If the RIAA take on online music, the artists will soon learn to bypass them and get a better deal.
RIAA wants to hike prices? Fine. Let them.
It's real simple. iTMS just had a record sales week with 3.3M songs sold. They are averaging something like 2.5M songs per week. Let the RIAA hike the price. Let's watch the numbers.
If consumers don't have a problem with the price hike, sales will be unaffected. If consumers don't like it, sales will drop. If sales drop by more than 26%, the RIAA starts loosing money. If that happens, they'll be forced to restore the $0.99 pricing.
You can't blame them for hiking their prices, if the market will yield a profit by doing so. As buyers of music, we all get to vote on whether the price increase is reasonable. If we collectively say we won't pay $1.25/song, they will be forced to either drop prices or lose money.
I would like to see a business justification for raising the prices 26 per cent, showing increased short-term costs in allowing apple to rip and post these things, or increased costs in referring the appropriate royalties to the artists involved.
I bet I don't see one.
Becaue I bet that this is just another fscking ripoff of the public, and they are trying to take control again by shutting down the economic benefits of online sales.
I do not at this time maintain that they are trying to get some quick cash to pay off a court order that they start paying long-term old back royalties to artists exceeding 50 million dollars, royalty money owed by contract to artists, that was conveniently held back because they "could not find" artists of the demure stature of madonna.
these bastards lie with every breath, have no direct impetus to reward the artist community that makes and fills their rice bowl, and doesn't give one half a shit about the public they sell to.
RIAA, in short, is a band of thugs.
if this is supposed to be a new economy, how come they still want my old fashioned money?
From Mac News Network:
Jobs today said that Apple has the largest online music catalog in the world, touting over 700,000 songs from over 450 independent labels as well as the big Five.
I've also read that Apple offered the SAME EXACT TERMS to indies that the Big Five get.
Full article here:
http://www.macnn.com/news.php?id=24469
Life is short: void the warranty.
I work for a DRM company who talks to some of these giants (and Apple), and TimeWarner execs say that they aren't making any money off of selling songs at 99cents a pop because the credit card transaction fees eat up a lot of this.
What they need to do is sell tokens to make this really work.
It's one of those sounds-too-good-to-be-true deals:
Pay only for bandwidth (resonable $$ too)
Choose your encoding format
Choose your encoding bitrate
I think the unlisted "feature" here is likely 'Fund the Russian mafia' but it's hard to tell from the site alone how legitimate it is, what their real distribution rights are, and if artists are even recieving money from them.
Any slashdotters have experiences or insight on this service? I know someone must because we /.'d it in about 10 minutes after the article went up.
-- I'm not a pessimist, I'm a realist. It's not my fault that life sucks so much. --
Dear Apple,
I am writing you due to the story that I read at the New York Post that you are considering raising the price for songs and albums at the iTunes Music Store (http://www.nypost.com/business/20309.htm). Let me first explain that I am what I would consider your average or target user. I own both a 10 gig and 40 gig iPod, both multiple pcs with iTunes and a G4 running OS/X. I bought my original 10 gig iPod *because* of the music store. I bought my 40 gig iPod yesterday because I ran out of room on the 10 gig and frankly iTunes doesn't make dealing with deselecting large amounts of music to be copied to the iPod easy. I have also purchased somewhere between five and ten albums at the music store, and even purchased an EP today. Granted that's not a huge amount but by my tally, I've spent over $1,000 on your music related offerings all together. I am also an Apple stock holder.
My point in this email is to let you know that I will discontinue use of the Music Store should you raise the rates. The 0.99 price point and the $10 or under album prices is *what is appealing* despite the numerous disadvantages including only being able to download once. If I'm going to pay more than $10 for an album I will go to the store and buy it. That way I get the original artwork, album notes, and something tangible that I don't have to burn to cd to have a backup of. I also expect your sales volume to decrease steadily if you should raise the rates.
From my perspective the music industry wants it both ways, a steady price for the consumption of music, regardless of production costs. Lets just assume that the price of CD's in the market today is not a product of collusion and price fixing. There are tangible costs beyond that of the artists, producers, and engineers. There is the cost to duplicate the media, provide the jewel case, the artwork, inserts, packaging, shipping, and distribution. Ideally iTunes Music Store provides a way for the fans to get what they want cheaper, and for the Music Industry to get more return on their money because of the lack of cost associated with the distribution of the content. Apple conceivably wins in this scenario also because of the overall brand imagine enhancement which entices iTunes Music Store users to buy iPods, macs, and OS/X upgrades.
I hope that my letter is not falling on deaf ears, and Apple doesn't forget what made the iPod and iTunes Music store offering popular in the first place.
Respectfully,
Gavin M. Roy
It's all about greed. How is it that RIAA wants $1.25 a compressed DRM song in the US but you can legally download an uncompressed no-DRM song from Russian for just $0.01 per MB?!? That means ~$0.35 per song. And if you decide to go for the compressed equivalent of what you find on the iTMS, you're talking about $0.04!! The same thing happens with the movie industry and DVD region codes. A legally purchased DVD that costs $20 in the US typically costs $2 elsewhere.
If markets are going to normalize across borders in this new globalized "Internet age" where big businesses send our jobs overseas, they better accept that we are also going to send our dollars overseas too. That's if their lucky. I'm willing to bet that a lot of people are going to feel cheated by this new development and are going to go right back to the P2Ps that RIAA has worked so hard to get us to stop using.
Don't be stupid. It comes out of the 70c. Or do you think that all artists command the same royalty?
The CC thing seems a bit odd. Are they implying that if you buy 2 songs at once they get 20c per song? I suspect not, in which case Apple's cut now becomes 10 for 1 song, and 30 for multiple. Quite a difference.
Buy music at .99 cents, then when it goes up to a $1, stop. Cold. Use the feedback form on the iTMS and let them know you no longer feel the value from the 26 cent price increase or whatever. Encourage your friends to do the same. To any sane company (pretend...) this would send the message that the prices have gone above the value, and people aren't willing to pay it. Of course to the RIAA it means people have just gone back to file trading or whatnot, and this whole online music thing doesn't work.
Apple is the most successful of the online retailers. Without Apple, essentially ALL downloading would be free P2P. If Apple says, "We will pay what we choose to pay. If you don't like it, we won't distribute your product.", what can the recording companies do about it? Their only real alternative is to lose even more money. Somehow I doubt the I-Tunes users are going to flock to competitors, certainly not the competitors who pay royalties.
Apple must have known about the sleazy tactics of the recording industry before going into this business, surely they would have had a plan to deal with problems like this.
The reason why iTunes has been so successful is because of Jobs's ability to cajole all of the labels to participate. As soon as he indicated that he wanted to compete with them, this cooperation would instantly disappear, and iTunes would become yet another service with a tiny library. Too tiny to be interesting.
A much better solution would be for Apple to drop the one-price fits all aspect of the store. Simplicity is good, but frankly, some songs are simply worth more than others.
In fact, if he wanted to subtly discourage overcharging by the labels, he could increase his margins on the higher end stuff. In other words: 99 cents a regular song, 4 dollars for a "premium" song. And if Labels found that these "premium" songs tended to get pirated in the P2Ps more, well, they always have the option to price them at the more reasonable lower tier.
I agree somewhat. If the record companies jack up prices, Apple should promote the independent artists already on iTMS through CDbaby. Getting into the record business directly may not be the best move for Apple. However, I could see them partnering with lesser-known labels. I've also wished there was a regional function to iTMS; buy local bands music from your city or whatever area strikes your fancy. If the latest Britney or Santana or whatever is too expensive, push the great music promoted by labels that aren't dicks.
harmonious design
You're making the assumption that because an artist is on an independent label, I'm going to like their music. While I do like a lot of independent music, like most people for better or worse my listening habits have been built around music distributed by major labels.
Using a collection of smaller download services is time-consuming, because you have to go from one service to the next in order to find what you're looking for, and it still doesn't expose you to the breadth of music that iTunes does.
Unfortunately for the indies, consumers like a very broad selection all in one place. There are thousands and thousands of Windows apps, most of them very crappy, but consumers like the fact that they can find any type of application under the sun for Windows. Apple has been fighting an uphill battle against this perception for years with the Macintosh, and they've learned a lot from it.
It's also important to remember that most people aren't even aware of independent music. For every person who thinks Rhino Records is a bunch of sell-outs, there are 9 people who don't even know who Rhino is, much less No Idea Records.
Don't get me wrong - supporting indie music is definitely a way to keep good music alive. But don't expect that the majority of people will ever get into indie music. Even in the heyday of punk, only a miniscule percentage of the population had even heard of the biggest names in the punk scene.
Nibbling at the edges won't get the RIAA to mend its ways. It'll take an outfit with big-time commercial clout and a lot of money to get them to clue in, unfortunately.
Read the EFF's Fair Use FAQ
Yeah, actually. It means I can legally purchase music per-cut, rather than spending money on tracks I don't want. It's fun and convenient. I'm filling the holes in my library, and I don't worry about a Dear John from the RIAA.
That doesn't mean I like the idea of a rate hike. But pricing is a separate issue from the bigger question of whether or not labels and artists have the right to expect payment for their work.
I'd possibly pay $1.25 a cut, but it would likely cut down on the number of transactions I make. I buy few albums through iTunes. $16.99 is too much, given that one might find a new CD cheaper than that price. Better to shop around and be able to rip a superior copy if I want the whole album.
It would be great if Apple begins to offer iTunes downloads in their new lossless codec. Would make me feel better about a price increase.
This is my post. There are many others like it. If you don't like what you read here, go try one of the others.
Personally, I just don't buy single-CD albums for $16.99. And I'm sure as hell not going to buy a single-CD's worth of MP3s for that much.
With the popularity of stores like Best Buys and Walmart, where the new CDs are something more like $11.99 to $13.99, is anyone actually paying that high of a price?
So, it seems to me like this is more of a move to kill off or injure iTunes.
Aside, I often see older, back-catalog CDs selling for those prices. I always figured it was because the record industry thought that anyone who was going to buy them was diong so because they really wanted to get that album, and therefore they could milk the customer for more. As compared to the "new hit" CD, which I suspect people buy en mass because it's cool, hip, and now.
That's actually a really good idea. Charge $2.50 per song for the newest tracks and gradually scale it back to $0.25 if it's more than 5 years old (or some other arbitrary number) or less popular. Then the newest, most hyped garbage bears the cost of the system which is how it really works these days anyway. I'd be fine with sticking to 15 year old music legally downloaded for a quarter a piece while dumbass teenagers get their newest pop boy band sensation crap with their mom's credit card for $2.50 per track.
The real reason is because a $16.99 album download is not properly compared to a $16.99 cd. The *real* comparison is between a $16.99 cd and a $.99 download of the single track that is worth a damn.
People might be willing to jump straight to full cd price if the single track costs $2.50.
Personally, I'm liking the radio more and more. Go WRR!
t
1. There is already lots of pirating because people think that the store prices for CDs are too high.
2. My guess is that the slope of the demand curve for purchased online music is really high and quite nonlinear; my guess is that any price increase will dramatically lower the demand for purchased music (because it's just as simple to download a clandestine copy) while lowering prices will increase demand at some more measured pace. (This is opposed to gasoline, where huge changes in price have little effect on demand, at least in the current range of prices. In the US.)
These observations lead me to believe that folks need to do some updated thinking about economic theory and products/services which have basically no implementation cost. There has to be a reason for someone to pay for something, and when you have (effectively) instantaneously delivery of digital content at potentially zero price, it's quite difficult to build a business distributing music (I would argue there is still a lot of room to create music - the RIAA has never been in the business of creating music though, which is why they are upset. Their entire business model of music distribution is falling apart).
Anyway, I suppose that if they raised prices they would quickly find out that demand would plummet. In this instance, what would happen is that they would probably kill iTunes rather than rake in more money; my guess is that even if they forced *every* provider to raise prices they'd just lose volume. (This is because if there is any one provider with a lower cost, the lack of barriers on the internet would quickly shift all business to the lowest-cost source. The one hiccup here is, of course, the iPod, which definitely complicates the analysis.)
That's about all for today on this, I think...I'm sure I didn't cover every facet, but we're still in the early stages of the Intellectual Property Revolution.
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
Loans for marketing if you want to make it "big" are a reason to go through the RIAA. Even now you can make a living without the RIAA (ie Fugazi).
The labels will still be able to make a band big. It will just mean the little guys have totally even footing. But if you want to be a successful little guy now it is possible.
In my area it is relatively easy for a band to pull 1200 a week in shows (4 shows at 300). thats 300 a person there, then you sell your CDs at 10 dollars a piece for a 7 dollar profit. Thats 370 dollars a person a week, not big money but more then minimum wage. and it still allows for a part time job. Also some creative tax work, like only reporting 300, or 250 (which is minimum wage here) a week and keeping all those receipts for equipment and you are doing Al right. If you try at all you can get a couple shows bigger then that without going too far away too. Cost of living here is not that high either, 20,000 a year is not good money but it is survivable.
For somebody with talent playing anything that people will listen too (main stream punk, country, blues, bluegrass, heavy metal, rock, covers) there is definite potential to survive without the record company.
Much harder is finding like minded people who don't want to make big money with their music, but want to do it for a living.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
Pricing for new music should be high, older stuff could be much lower. If older stuff would be priced less (in any format), I'd buy a ton of music, but right now I don't bother.
This is a great idea. Something that would work great is something I saw in a video arcade once. The games were modified coin-ops so that you swiped a card, which you could put money on at the counter. Each game varied in price, in such a way that the price was based upon the frequency of play. So the older games were cheaper because people didn't play them as often, but if you started playing it a lot, the price might increase 1 or 2 cents per play. It made sure the price was right for every game.
Apple should do something similar. The price of a track would start at a predetermined amount. As more people purchased the track, the price would slowly increase based on some formula. The price would eventually level off at a fair price. The other great thing is that lesser known tracks would drop in price and more people would be willing to buy them. So how about it Steve? Are you going to hire me now?