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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.
Ok... I understand why the RIAA wants to make more money off each track. There are only two or three good tracks on each CD. But to jack some prices up over what most new CDs are sold for in stores? How does that make any sense at all?
It's so fucking stupid that I want to rip my nuts off, cook them, and then eat them. Note to RIAA: YOU ARE A BUNCH OF FUCKING IDIOTS. God... I just can't stand it. They're begging for us to pay for music. Some people do. Now they want more money from those people while giving them less than they would by buying the CD in the store.
Casual Games/Downloads
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.
This does NOT mean anything of the sort. It means that if Apple wants to sell these songs on its online store it has to bow to the wishes of the music cartels. It's their music afterall.
You know, I have downloaded less than 10 songs since the height of the Napster/Kazaa days (2000/2001?) and the rest have been songs that are legally available for free. Why the hell are we bothering to support the cartel's music? You realize that they are going to keep pushing and pushing (with bait-and-switch if necessary) to keep online downloads out so that they can reign supreme in the sales of music.
Support only the artists that allow the free taping and distribution of their music! Do NOT let the cartels continue to dictate to you and your favorite artists how the music you love will be distributed and at what cost.
Every time I hear about record labels these days I'm forced to think about the indies, who create the best music and get paid the least. My only hope is that a site like mp3.com will learn from the mistakes of mp3.com and come up with a solution for indies to profit and truly compete against big labels with more even footing. Nobody likes a grudge match like I do. :-)
Bait and switch concepts always fail business, and it looks like Apple will have to cave to the pressure from groups like the RIAA (who happen to be in love with shady business practices). Drug dealers do the same thing; $0.99 for the first hit and then you get gouged when you're hooked! Maybe taco was right after all?!?
The dangers of knowledge trigger emotional distress in human beings.
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)
If i *knew* that money was going to the artists, i'd be okay with it. Since i know it's not, fuck 'em; i won't buy. Free streams are doing just fine for me.
Fine -- they can have it their way. The $.99 model was working fairly well, and a decent number of people were actually entertaining the notion of paying for music. This development will prove, yet again, that greed is running this show -- not fairness.
Until there is a "fair" alternative, meaning it's accepted as fair to the majority of open-minded and reasonable people, we will continue to see a well-defined, concerted effort to make music available for free.
iTunes was a step forward, and this represents 3 steps backward. It's a slap in the face to those who were actually paying for what was available for free. Expect them to be punished severely, in the form of greatly increased P2P activity.
dmiessler.com -- grep understanding knowledge
When are the record labels going to understand that their product isn't worth what they want to charge?
It's like the NBA - a big marketing scheme where the underlying product does not have the appeal nor the value their pushers would like us to assign...
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
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
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.
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.
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.
"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.
And it's not just dumb because they're making the price higher, but they're making the EASILY COPYABLE audio CD format competetive again!
I mean what the crap? On one hand they're trying to secure their intellectual property, and on the other they're deterring people from a format that secures their intellectual property with out-of-whack pricing?
Dumbasses! This is a strategic blunder, how do they not see it? In a weird turn of the tables, I'm mad about it because they're so obviously proliferating a problem they're trying to solve.
I should be happy, because it means the long life of easily "shareable" audio CDs, but somehow I'm not..
-- The unsig...
Tell them how you feel.
http://www.apple.com/feedback/itunes.html
Keep the Classic Slashdot.
Basically destroys the whole purpose of the service, doesn't it?
What makes you so sure that isn't the RIAA's goal? The brick-and-mortar model is easier for the RIAA to exert control over, and the iTMS is exposing people to independent music that maybe they would have had a difficult time finding otherwise. Maybe the RIAA thinks its in their best interest to kill off online music and then go "see, online music doesn't work".
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
Well, I certainly won't be. I've spent a bit over $100 at the iTMS since it opened and, generally, have been pretty happy. At $0.99 per track, I've even been willing to experiment and give new artists a chance.
If it goes to $1.25 per track, that's going to cause my purchasing to drop off considerable. Once again, greed's running the show at the RIAA, and once again, they're executing Operation: Footbullet faster and better than anyone.
Want to complain to the top? Try dropping an email to sjobs@apple.com.
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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 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?
The RIAA loves the new Napster, or at least, part of it. For those who aren't quite familiar with how the service works, users pay a monthly fee to subscribe to Napster. Then, based on the preferences of the copyright holder, users can either stream or download tracks for a one-time fee. Once the fee is paid, the user can listen to the song as many times as they want, but only downloaded songs can be loaded onto mp3 players, etc. for use away from the computer.
The rub, of course, is that if a subscriber stop paying Napster a monthly subscription fee, she loses access to the music streams she's already paid for. It's brilliant, because in the end, the consumer gets nothing for their dollar but instant gratification. No file, no archived recording, just the experience of having heard Outkast encouraging them to "shake it like a Polaroid picture" to file away in their memory.
The RIAA adores this. It makes them happy like dogs rolling in some particularly nasty filth. They look out and see the incredible use statistics counting the users of p2p and iTunes, and they start multiplying subscription fees on top of those numbers. It's the best deal possible for them, because they manage to make money by selling us no real assets.
But iTunes style stores, where users are given individual copies of songs to keep and own, and use in perpetuity for a one-time fee? The RIAA hates this. It makes them sad, like a pet owner discovering that his dog has rolled in some particularly nasty filth. Instead of a recurring revenue stream that's locked into continuing to pay for the RIAA's existing products for life, each consumer instead is a fair deal. They get songs for a low one-time fee, they're able to get their music a la carte without having to buy dozens of filler tracks, and they're still offered the instant gratification that is the only real selling point the streaming model has to offer. The RIAA, in turn, is forced to continue producing new product at a high enough quality that they can continue to sell it to customers.
Once you understand this, it's easy to see what the RIAA is doing: They're trying to shut down iTunes.
By raising the cost of songs to $1.25, they're breaking the magic $1 price point. Anything under a buck, well hell, that's just a candy bar. Why not buy it? But $1.25, that's a 20oz. bottle of soda, a purchase that must be considered a little more carefully. They've broken the psychological barrier to impulse purchases that $.99 magically hovers below.
By raising the price of full albums on iTunes to be equivalent to the cost of a physical CD bought in the store, the RIAA looks on the surface like they're creating a financial incentive to go and buy the album at a music store. But we all know that's not how this will work out.
What will happen is that iTunes' sales will drop, but they won't be met with a commeasurate increase in sales at music stores. The RIAA knows that people accustomed to the iTunes Music Store will return to illegal acquisition of music via filesharing before they'll go to the store and buy it.
In fact, they're counting on it, because once the iTunes music store is dead, they can say, "See? We tried, we put our best foot forward, but it just didn't work. These pirates aren't interested in paying." Then the lawyers can go to town, until there is no technological nor legal recourse available to escape their stranglehold on recorded music.
It's not only evil, it's fucking brilliant.
Even Jesus hates listening to Creed.
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.
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
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!
And so, laughing maniacally, the music industry snatches the gun from Apple and begins frantically shooting the stumps at the ends of its legs.
You take 0.99 and subtract the line items:
0.99-(0.70 + 0.20 + 0.10) = -0.01
That mean that the artist OWES someone $0.01 for each song sold.
Dogma - "let's just say we'd like to avoid any empirical entanglements."
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.
...is because non-RIAA bands can get "shelf space" right next to theirs, with previews so you can listen to, not only see an unknown name. I think they've started to see what iTMS would become, should it become successful (i.e. make a dent in physical CD sales, not biggest online shop).
The RIAA is working very hard to keep their customers "in the dark" about other bands. Sure, the odd person may go "indie" but they don't want a mass of people to make something "indie" into "mainstream". I.e. take the "impressionable teenager that listens to what other teenagers listen to" market.
After all, I'm sure there's more than enough music out there for me to listen to it 24/7 for the rest of my life without hearing anything twice, most of them non-RIAA (a lot of crappy ones too, but many good I'm sure). The iTMS could show it all.
It's not the distribution channel they fear. It's the exposure to all sorts of music you can get through the iTMS. Imagine word-of-mouth going around "Check you band X on iTMS, they're really good". With instant previews, instant satisfaction, instant spreading the word, instant fame.
Suddenly a band that never would have reached "critical mass" without the RIAA before, could make it big. Get your music up on iTMS, hit the "hip" people, the trendsetters, and you don't need a huge record contract, retail stores or a media blitz to make people hear and buy your song.
You've got no problem with a million people suddenly wanting your song, no scale-up problems, no production delays, no distribution bottlenecks. Nothing. World-wide (well, not yet but iTMS will get there).
That is why the RIAA will hold the online stores in a chokehold. Killing them would make them seem bad "they won't deliver what the customers want", too loose could shatter their hold on the market. Expect the DRM to become more and more anal.
Then blame the consumer for not wanting it. "We tried to sell it online". It's perfect. They get to keep their profitable CD sales, the consumers look like the bad guys and Apple the "friendly" that really only wants to sell iPods. Which btw is quite happy as long as they're the biggest *online* shop, making most people buy iPods.
Kjella
Live today, because you never know what tomorrow brings
Wait a fucking minute here. We've got 5 big media conglomerates coming together to discuss how to artificially increase the cost of their products. Exactly how is this not conspiracy and extortion? How does these actions allow for competitive market forces to drive the cost of their product to the peak price points according to the law of supply and demand? Why the fuck aren't these criminals in fucking jail where they fucking belong? Fucking anti-competitive un-American terrorist bastard dickheads. These scumbag assholes can fucking rot in hell.
Sig (appended to the end of comments you post, 120 chars)
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.
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.
They're trying to get people used to paying CD prices for downloaded music so they can phase out CD sales all together, thereby significantly curtailing the trade in mp3s, reducing their distribution costs to nil, and gradually moving people to a pay-per-use model for content consumption. It's the Entertainment Industry's Holy Grail. The IRS taught us long ago you don't hit people up for a ton of money up front, you take it from them bit by bit.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
RIAA members make money by casting nets throughout the distribution networks they control utterly through means of their cartel.
New methods of distribution are a grave threat (literally) to their necessity, which in both business and nature is a swift road to extinction - unless those streams either emerge under strict controls, or are addressable through business or legal tactics.
Internet music distribution is a bear of a problem to these people. There is no specific competitor to be bought out or sued, or specific technology to buy into; the fight against Napster underscored this point clearly.
Furthermore, their entire livelihood - marketing and distribution of music - has morphed over the past decade into obsolesence. "Push" marketing - the only kind RIAA members know about - never fails to fail on the net, and "distribution management" is something that software can handle with far less overhead than RIAA is demanding from artists in meatspace.
RIAA supporting music downloads is like Bush campaigning for Kerry. If legal music downloads take off, RIAA dies. It isn't any more complex than that. The net undermines all of their profit schemes.
Notice how popular legal music downloads are getting? If they get too popular, who'll need RIAA? RIAA has been pushing against illegal alternatives, so they can't very well opt out without validating most every argument put against them as to their motive. So what other option do they have to curb the burgeoning frenzy? If legal downloads make overall music sales go up, what reason will they have to petition Congress or judges?
IMO they're trying to make downloads so unattractive an option that most people either go back to illegal downloads or CD buying. In the case that it fails to stop legal downloads or increase CD sales, they still make a lot of money. It's a no-lose plan.
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.
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
Read the EFF's Fair Use FAQ
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)
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?