MP3 Download Prices to Rise?

OBeardedOne writes "The major music labels are in talks with music download services attempting to get them to increase the price of music downloads. " Sounds like there is division in the ranks of the music companies, but something to watch.

Comments

www.allofmp3.com

[zackrentwood]

All of MP3 http://www.allofmp3.com/ already went from $0.01/MB to $0.02. This is old news.

Re:www.allofmp3.com

[Tony Hoyle]

*sigh* here we go again.

It's legal in russia. You do the transaction in russia, in rubles. They've paid a license... the RIAA has absolutely *nothing* to say about this as they aren't involved.

When will americans learn that their own screwed up system does not apply in the rest of the world?

Re:www.allofmp3.com

[MyLongNickName]

I agree with the two anonymous coward posters who got modded into oblivion. No one forces you to buy anthing, so I can't see how they "ripped you off enough". You are simply rationalizing your theft. Much like an employee who "suplements his unfair pay" by stealing from his company.

Re:www.allofmp3.com

[harlows_monkeys]

You know what? I'm all for it... if it means they are willing to discount the less-popular stuff in exchange. Then people who want to pay four bucks a song for the latest "boy band" can do so, and I can get all my favorite fucked-up indie stuff on the cheap. It's win-win!

Not in the long run. Paul Goldstein, a noted professor of copyright law from Stanford, pointed out something very interesting in a lecture I attended around 10 years ago. When music (or other copyrighted material, for that matter) is sold electronically (he was envisioning some kind of satellite on-demand streaming service, but the idea still applies), in a way that allows the sellers to keep track of the purchase history of individual buyers, then they could go to variable pricing that is variable per person, rather than just per song like you are imagining.

That is, they could figure out that you like that "fucked-up indie" stuff, and so charge you $4 for it, whereas if I think it is merely OK they might only ask $0.50 from me.

Note: Goldstein didn't say this would be a good thing. He was just pointing out the possibility that it might happen.

There was also some speculation as to how consumers could deal with this. I don't remember if Goldstein suggested this, or if it was something that me and my friends came up with while discussing the lecture later. Consumers could purposefully purchase stuff they don't like, in order to try to screw up the profile data, to keep the music companies from knowing what their favorites are. If buying a couple $0.50 songs from a genre you hate will keep them from raising one of your favorites from $2 to $4, it would be worth it. The music companies would probably tie in the purchase prices to the data from streaming services, so heavy music buyers could subscribe to streaming services, and have their computers listen to crappy music all day to skew the data.

Or maybe people could group together. Find someone who gets a low price on what you like, and for whom you have a low price on what he likes, and purchase for each other.

Re:www.allofmp3.com

[agraupe]

Ummm... no, they ripped me off by charging more than they should have for a product that I bought. Furthermore, they are ripping off artists, who, in all fairness, should get at least half of the royalties from a CD sale. Given that CDs are so cheap to produce, I think is it fair to say that the average CD-buyer *does* get ripped off, mainly because most of the money goes straight to the pockets of people who don't deserve it.

Re:www.allofmp3.com

[Golias]

That is, they could figure out that you like that "fucked-up indie" stuff, and so charge you $4 for it, whereas if I think it is merely OK they might only ask $0.50 from me.

Not a problem. Before I even read the rest of your post it occurred to me that I just form a co-op with about 50 other people of diverse tastes (including their teenaged star-obsessed kids), and we buy music for each other based on who gets the best deal.

Also, I could go out of my way to buy a balanced mix of genres, and then share my personal pricing data with a small group of black teens who happen specialized tastes, and find that they have to pay eight times as much for their favorite songs as I do. Then I can sit back and watch the discrimination lawsuits shred the industry to ribbons.

Pricing tweaked to the customer has not been accomplished in any other industry, what makes your prof so sure they could pull it off?

Re:www.allofmp3.com

[ttldkns]

Seriously how much more do they think that they would get anyway?

here in the UK we are charged $20-$25 for a new album, $30 or more if the album is older.

You yanks get everything cheap but still its too expensive for you...

Re:www.allofmp3.com

[sp3tt]

In Soviet Russia, mp3 downloads you!
(Well someone had to say it)
In Soviet Russia, prices raise you!

Re:www.allofmp3.com

[EggyToast]

No, it's not theft. It's copyright infringement. Many people liken it to theft because it's the closest tangible thing that most people deal with, in a legal sense.

Essentially copyright, as stated in numerous places, simply gives those who control the copyright the "right to copy," or produce those works in question. It started with books and, surprisingly, US booksellers reprinting British books without permission, meaning that british authors received no money from their work while the US booksellers profited. It was akin to piracy, and it's simply a form of piracy control.

Does this mean that it's equivalent to theft? No. That doesn't make it "ok," though.

So many artists essentially get something akin to a mortgage in order to produce music nowadays (and it's been this way for a long time) that I no longer feel that these 'artists who sell gold records living in poverty' should be held to higher standards than the labels that gave them the ability to do so. Labels pay for studio time, instruments, session musicians, mastering, distribution and more all up front, before an artist sells a single record or goes on tour, that I feel yes, the artist does owe the label something for giving them the chance to express their creativity to a wider audience. Some of it sucks and some of it's good. That doesn't absolve consumers of responsibility to purchase goods that are released for sale simply because they feel it's "unfair to the artists." Many of those same artists are poor with handling money and fame and fall on hard times on their own accord. Plenty more do quite well, releasing an album every few years without ever having to work a regular job. Boo hoo.

There's a great deal of indie music with fair record labels and well-paid musicians that are waiting for your money, if you feel the major labels are doing something wrong. You don't exercise civil disobedience by illegally downloading music -- you exercise it by boycotting those labels and enjoying independent music.

And FYI, if you have the vinyl record, you're allowed to make copies for personal use. You could download that album via P2P and RIAA wouldn't have a leg to stand on against you, if you already owned the release.

Re:www.allofmp3.com

[EggyToast]

Same here. My girlfriend still buys CDs at best buy, whereas I tend to look at the iTMS. For me, it's because I like more obscure music, but her stuff is a little more mainstream, or available in the classical or folk sections.

She still buys the CDs because at Best Buy, everything is under $13 again. She just bought the Garden State CD for $9.99. So it cost the same for her to buy the actual CD as it would have to buy the AAC version of it online.

I saw $16-18 CDs a few years ago, but after the price-fixing lawsuits went down, everything started dropping, and now I regularly see CDs in the $10-13 range.

Re:www.allofmp3.com

[igny]

According to the Russian news, allofmp3 has found a loophole in the Russian laws, which equated the music downloads to a (radio) broadcast as long as they pay the license fees. Allofmp3 is currently under investigation by the Russian Police because of a (local) conflict between two Russian licensing agencies, not because RIAA is after them.

Re:www.allofmp3.com

[ray-auch]

You took a copy in russia that you paid for in russia. No probs there.

You transferred it to the US and copied it there.

Whether or not that second copying is illegal depends on whether or not copying for personal use is permitted under your laws - some places it is some it isn't.

If it would be legal for you to buy a cd in russia, bring it back to the US and then copy it to your HDD, then allofmp3 should be legal too, since it is the same thing. Alternatively both actions could be illegal - depends on your local laws.

Re:www.allofmp3.com

[dryeo]

If you believe that record companies make unfair profits, the way to combat that is to boycott their products, not to steal them. You can always look for indie bands.

This doesn't work. The record companies just blame the lost sales to piracy and get laws passed guaranteeing them money. Here in Canada now I'm paying the record companies everytime I backup my computer. And if I was a musician I would be paying them everytime I recorded a CD

Re:www.allofmp3.com

[PoopJuggler]

You poor dear. It must have been pretty scary when those big, bad record companies barged through the door, held a gun to your head, and forced you to buy those CDs.

I'm not sure I follow your argument here. How is illegal price-fixing not ripping people off? That's the whole reason it is illegal...

Re:www.allofmp3.com

[PoopJuggler]

How the fuck did the record companies 'rip you off'? Seriously? ...snip... Geezus, you are a fucking moron...

I would consider illegal price-fixing to be ripping people off. Seriously.

Re:www.allofmp3.com

[diablomonic]

if someone steals your identity, and DOESNT USE IT (ie doesnt affect you) then has he/she really stole your identity? because it is not at all proven that downloading music is detrimental (indeed , many people have suggested it is actually beneficial) to music sales. An identity theft analogy might be someone stealing your identity to DEPOSIT money into your account... I wouldn't complain, would you?>

Re:www.allofmp3.com

[cpt kangarooski]

There have been multiple cases in the US that have shown that the actual reporduction of digital copy occurs at the *server* not the client.

Aside from that such an argument is nonsense -- you say there are cases. Cite them.

I can cite mine:

The district court's grant of summary judgment on MAI's claims of copyright infringement reflects its conclusion that a "copying" for purposes of copyright law occurs when a computer program is transferred from a permanent storage device to a computer's RAM. This conclusion is consistent with its finding, in granting the preliminary injunction, that: "the loading of copyrighted computer software from a storage medium (hard disk, floppy disk, or read only memory) into the memory of a central processing unit ("CPU") causes a copy to be made. In the absence of ownership of the copyright or express permission by license, such acts constitute copyright infringement." We find that this conclusion is supported by the record and by the law.

MAI v. Peak, 991 F.2d 511 (9th Cir. 1993)

Unlike the defendants in MAI, the court reasoned, neither the operator nor the provider initiated the copying; their systems were merely used to create a copy by a third party. Id. at 1369-71. Similarly, the court found that only the subscriber should be liable for causing the display or distribution of the copyrighted work because the actions of the operator and the provider were "automatic and indiscriminate." Id. at 1371-72. Thus, Northwest argues it cannot be held liable for direct infringement because if any copying, distribution or display of plaintiff's work occurred, it was caused not by Northwest, but by Internet users.

Northwest's second argument is persuasive.

Marobie-FL v. NAFED, 983 F. Supp. 1167 (N.D. Ill. 1997)

The first question, then, is whether those who browse any of the three infringing websites are infringing plaintiff's copyright. Central to this inquiry is whether the persons browsing are merely viewing the Handbook (which is not a copyright infringement), or whether they are making a copy of the Handbook (which is a copyright infringement). See 17 U.S.C. 106.

"Copy" is defined in the Copyright Act as: "material objects . . . in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." 17 U.S.C. 101. "A work is fixed' . . . when its . . . sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." Id.

When a person browses a website, and by so doing displays the Handbook, a copy of the Handbook is made in the computer's random access memory (RAM), to permit viewing of the material. And in making a copy, even a temporary one, the person who browsed infringes the copyright.

Intellectual Reserve v. Utah Lighthouse Ministry, 75 F. Supp. 2d 1290 (D. Utah 1999).

We agree that plaintiffs have shown that Napster users infringe at least two of the copyright holders' exclusive rights: the rights of reproduction, 106(1); and distribution, 106(3). Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights. Napster users who download files containing copyrighted music violate plaintiffs' reproduction rights.

A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001).

So, they make a copy and send it over the wire to me.

Which is impossible.

A copy is defined by the law, at 17 USC 101, as being a tangible object. If you've figured out how to send tangible objects via wire, then please demonstrate this absolutely stunning new technology, by, e.g. emailing me a glass of water.

Of course, that's not what's going on here. What's actually

True Colors?

[scaltagi_the_pirate]

They are all rich, greedy bastards. Nothing to see here... move along.

Re:True Colors?

[kc0re]

I agree. and furthermore.. Can there be a statute of limitations on collecting money for music? Say anything over 10 years can be at a discounted or totally free price? like .10 cents. All the good music was produced more than 5-6 years ago anyway. (IMO)

Re:True Colors?

[geoffspear]

There is a "statute of limitations", of sorts. When copyright runs out, you can no longer force people to pay your for the music you own.

Of course, you'll probably be long dead before the copyright on any high-quality digital recordings runs out, so it doesn't help you much.

Re:True Colors?

[netwiz]

Can there be a statute of limitations on collecting money for music?

There already is. In the States, it's called the Copyright Act. It expires 95 or so years after the death of the artist, at which point the content becomes free for everyone (public domain).

However, since that time is totally arbitrary and determined by the U.S. Congress, whenever it's about to expire, various Vested Intrests will simply lobby their CongressCritter to have the Act extended.

Re:True Colors?

[maxwell demon]

However, once you buy a copy, you're free to make as many copies of that copy as you want. Because the person who sold you the copy doesn't hold the exclusive copyright, you see.

Unless, of course, it is protected with a copy protection mechanism. Then copying per se wouldn't be illegal, but breaking the copy protection (which is necessary in order to copy it) AFAIK still is (IANAL).

Re:True Colors?

[Leo McGarry]

But you're not free to distribute those copies as you see fit.

After the copyright expires? Of course you are.

Grandparent poster was advocating a limit to how long a company is allowed to sell music at a given price, after which it would be free, or cheaper.

No such limit exists, nor should it.

I don't see what "misconception" you're driving at

The misconception is that the price of a given work on the open market is related to whether that work is still protected by copyright or not. When the copyright expires, stuff does not suddenly become free for the taking.

Let's concoct a fictitious example because I'm too lazy to go look up a real one right now. Let's say there's a movie called "My Trip to France." This movie was made in 1920, and so is long out of copyright now. But the only existing master of this movie is a film negative sitting in a vault owned by Mister Louis B. Meyerstein.

The copyright has expired, you say, so you should be able to have a copy of "My Trip to France" for free. Louis B. Meyerstein is unimpressed by this reasoning, and offers to sell you a copy on DVD for $19. "Outrage!" you cry. "The copyright has lapsed!" Meyerstein replies, "All that means is that if you have a copy you are free to make a copy. It doesn't mean that I'm legally obligated to give you a copy of the copy I already have."

See the misconception? "Public domain" does not automatically equal "free." Or even "cheap." It just equals "no longer protected by law."

prices?

[MindDelay]

you mean we're supposed to pay for mp3s?

Re:prices?

[moofdaddy]

No, its just a funny joke.

working link

[saleenS281]

working link[clickability.com]

New record label?

[tommyth]

I've never heard of this "404" record label. Or are they a group representing record labels? And why is /. affiliated with them?

Hate to reply to my own post... LINK

[Mz6]

Here's the link -- http://www.theregister.co.uk/2005/02/28/downloads_ price_rises

Adding to the fire...

[TrippTDF]

From my standpoint, the piracy fire has not been put out yet. Increasing the cost of music is just going to push people away from paying for music.

illegal trust

[cooley]

If this isn't the very reason we have anti-trust laws here in the USA, then I don't know what is.

Wait...

[Avyakata]

I guess the music companies still think free music is taking away from their profits, even though it isn't free anymore...

Link to CNN article

[Tree131]

Here's a link to CNN article.

Re:Link to CNN article

[i_should_be_working]

The Financial Times, quoting unnamed music executives, said wholesale music prices, thought to be around 65 cents a song, were originally set artificially low in a bid to stimulate demand

lol!. I guess for them it costs more than 65 cents to make a copy of a 4MB file and upload it to servers? This is utter crap. They actually expect us to believe that a digital version of a song is more expensive than it's CD version? Not that it is for us now, but if they raise prices...

Re:Link to CNN article

[i_should_be_working]

Well then please explain this Mr. Economy. If I can buy music now on a physical CD and it only costs about a $1.50 per track and the recording industry makes a profit off of that even after accounting for the costs of the physical cd, printing, and shipping, how could they not make more of a profit off of me buying for $1 a digital file that has virtually no reproduction costs?

Also, I never said that tracks could be made for 65 cents. Of course an original track costs more than that to make. But since they can then reproduce it as much as they like the actual cost of one of those copies goes dramatically down. Obviously down to $1.50 at most for the physical copy since they make a profit at that price. Much less for the digital version.

Prices

[johndiii]

Given that I downloaded all of Ray Charles' Genius Loves Company for only $4, I'm not surprised. If there was something of value in the disc package besides the music, I would have been willing to buy it. But the extra $15 (to get to the recommeded retail price) just isn't worth it.

HERES THE LINK!

[keeleysam]

http://www.theregister.co.uk/2005/02/28/downloads_ price_rises/

Bunch o' Rocket Scientists on Slashdot

[corporatemutantninja]

I just clicked on "View Source" to find the missing link. As it were. http://www.theregister.co.uk/2005/02/28/downloads_ price_rises/

Re:Nice link....

[mikecito]

Sheesh - that sucks. Right when I was about to start using ITunes, too. It's too bad - they finally find a product the consumer wants, and they squander it. All in the name of keeping bad artists in business. Let's face it - the talented and popular don't need higher prices. This is to support the one-hit-wonders that never sell a cd because their only good song is mixed with 10 other crap songs, and no one will pay $15 for it. Instead, they just pay 99 cents for the one song that was good. Good job, RIAA. Good job.

Sing, fuckers, sing!

[Tackhead]

Gimme a simple backbeat. *thumpa, thumpa, thumpa* Aaw yeah, that's it.

> The requested URL (%3CA%20HREF=) was not found.
> > Nothing for you to see here. Please move along.

Percent three, with a Cee-Ayy percent,
Nothin' for you to see here.
Percent twenty, Aitch-Arr-Eee-Eff,
URL wasn't found.
Slashdot editors makin' no sense,
Nothin' for you to see here.
Least it wasn't a duplicate H-ref,
Time to move along.

(If the article was workin' I'd know how much to charge you for reading this. Sheesh.)

Well they have to raise prices

[the_skywise]

Because the cost of manufacturing has...

Er... Because they have to hire more employees to handle the purchasing load...

Er... Because the Britney Spears needs a new swimming pool for her poodle... yeah!

Isn't it time we just declare the RIAA a monopoly and start regulating it because, obviously, there is no competition.

Re:Well they have to raise prices

[TheRaven64]

Isn't it time we just declare the RIAA a monopoly and start regulating it because, obviously, there is no competition.

The RIAA is not a monopoly. They do not produce anything (although their members do), and so can not be a monopoly. They are a cartel. Not that that's any better...

Re:Well they have to raise prices

[Vicsun]

Er... because price collusion is perfectly legal and ethical.

Re:Well they have to raise prices

[Elwood P Dowd]

It's not a monopoly, it's price fixing/collusion/whatever. There are several different firms, so it can't be a monopoly.

Re:Well they have to raise prices

[khallow]

The correct terms are "oligopolistic collusion", "semantic games", and "oligopoly". "Monopoly" means the market is completely dominated by one supplier. In the music industry there are multiple competiting suppliers, but only a few have huge and cozy distribution chains. That's an oligopoly not a monopoly.

Re:Well they have to raise prices

[zev1983]

You're right, it's not a monopoly. It's a Trust. Think Anti-Trust...

Re:Well they have to raise prices

[Elwood P Dowd]

What is the trust, though? I just don't see how it's the RIAA that's doing the price fixing here. It's certainly all the members of the RIAA, but not via the RIAA. There is no one business entity doing this price hike. Not only that, the labels aren't all in agreement, so it's not even price fixing. Yet.

Honestly, I don't know what Jobs was expecting. Did he think that he was going to get these greedy bastards to heel forever? Even if it was in their best interest? Rather than grow their new market, and establish it as a permanent force, they want to hike prices and cash out.

If they cut prices, they might start to really demolish p2p. Thank god they don't. We've got them fighting the downhill battle for us. Fucking morons.

Re:Well they have to raise prices

[Golias]

Except iTMS is becoming a distribution chain that puts the little guys on nearly-equal footing.

A couple weeks ago, I downloaded an album by California artist Mari Iijima. She's a former J-Pop star who's currently living in the US and putting stuff out on her own tiny label (mostly in English.) IMHO, the music she makes these days are leaps and bounds better than the stuff she used to record as a Japanese teen idol years ago... and almost nobody outside of the SF bay area seems to know about her.

Skim through other people's "iMix" lists and you can discover all kinds of gems like this.

Re:Well they have to raise prices

[Kadmos]

Er... because price collusion is perfectly legal and ethical.

Is it really? I assume you are from the USA? In Australia price fixing is very much illegal (also in the UK I think).

Even if it is not illegal, could you please explain why you think it is ethical?

Incidentally, it always makes me laugh when suppliers try and make me price something at what *they* want (usually with the end result that they make big $$$ and I would make virtually nothing).

Maybe your being sarcastic but the "Insightful" mod makes me have my doubts.

price to rise, eh?

[panic911]

Well I'm glad I don't pay for my mp3's :)

I'm probably not alone in this:

[theparanoidcynic]

I wouldn't pay more for legal downloads than what they already cost. If it costs the same as a CD I'll buy the CD if I want to be legit. A CD is lossless and comes with the little booklet anyhow. Plus, no (non-laughable) DRM.

Re:I'm probably not alone in this:

[Kiryat Malachi]

16 bits per sample per channel, 2 channels, 44.1 kHz. This happens to work out to 1.411 Mbps (176.4 kBps). At which point the CD tacks on a Reed Solomon codec and some other crap for error correction, significantly upping the recorded data bitrate, but the audio bitrate for a Red Book CD is definitely not 320 kbps in any way, shape, or form. 2 channels. 16 bits (2 bytes) per channel per sample. 44,100 samples per second. 176,400 bytes per second. 1,411,200 bits per second.

I'm certain that's what you meant to say. In your pedantic "digital is always lossy" argument. But if you're going to be pedantic, please, please at least get your numbers right.

Re:I'm probably not alone in this:

[Michael Wardle]

No DRM? You must live in America.

Wow that's really gonna hurt

[vapid transit]

If they raise prices they'll be even less competitive with the price of $0.00 that I currently pay per song.

Guess we'll have to go somewhere else...

[ctl4u]

Like here for example. Not to mention you get your choice of formats: ogg,m4a,mp3,wma. And at about a dime a song you can't beat it.

mp3s?

[wvitXpert]

I don't know of any online music stores that sell mp3s. So let the prices rise as high as they want them. When they start raising the prices on Protected WMA and Protected AAC I'll start to care.

Illegal?

[phorm]

Wasn't the recording industry nailed for trying to force retailers to up the price for CD's. Wouldn't this be just as illegal for Mp3 downloads?

Re:Illegal?

[TopShelf]

A slap on the wrist could be considered an overly harsh assessment. As I recall, they got to make a "donation" of music CD's to schools and libraries to cover part of the damages. This only provided them an opportunity to empty their warehouses of the junk that would never have otherwise left their shelves.

Re:Illegal?

[shark72]

" Wasn't the recording industry nailed for trying to force retailers to up the price for CD's."

Kinda. They set up a MAP (minimum advertised price) program with Tower Records and TWE in which they helped pay for advertising if Tower and TWE agreed not to advertise the price of CDs for below a certain point. The MAP program started because Tower Records and TWE complained that Wal-Mart, Best Buy, etc. were putting them out of business by selling CDs at or below cost. When Wal-Mart and Best Buy found out about the MAP program, they went to the government.

As another poster put it, "nailed" isn't the best term. The MAP program didn't affect the distributor price of the CDs, so the record labels didn't lose any profits as a result of being ordered to stop MAPping. The big winners here were Wal-Mart and Best Buy. The losers are indie and specialty record stores like Tower (who subsequently filed for bankruptcy), as Wal-Mart and Best Buy will continue to drive them out of business. Also among the list of losers is music fans who might be willing to pay a buck or two extra per CD for the opportunity to shop in a cool indie store with great selection, rather than having to deal with the Wal-Mart or Best Buy shopping experience.

"Wouldn't this be just as illegal for Mp3 downloads?"

It's a different scenario here, as in this case, the record companies are actually trying to raise wholesale prices. An equivalent to the price-fixing case would be if the record companies were now offering to help fund Apple's advertising if they agreed to only advertise tracks that sell for, say, $1.29.

Re:Nice link....

[wpc4]

Sorry, but all your links are belong to the /. editors.

Contracts...

[somethinghollow]

I think it was Steve Jobs who said Apple has contracts with the record labels to sell songs at .99. These contracts, if I remember correctly, were for at least 5 years. The same rumors happened last year in may. But, I guess we'll see what happens.

Link

[mushupork]

Here's one at CNN International.

Labels are like OPEC...there's no competitive pricing among providers, just THE price for the product.

Bad title: does not involve MP3s

[AtariAmarok]

The files sold being referred to are mostly protected WMA, AAC, or Real files. Maybe some non-tech idiots think that all digital music files are MP3s, but these are the same idiots who think that all picture files are JPG's and GIF is a kind of peanut butter.

Profit Margins

[yetdog]

What REALLY pisses me off about this whole sham, is the fact that digital downloads are already pure profit for the labels. No packaging, distribution, or printing. Pure profit. And it's just not enough to fill their bloated CEO's coffers. Sue your customers for downloading illegally, but charge them an arm and a leg to do it the "right" way. Piss off, RIAA. You'll never see another dime from me.

Re:Profit Margins

[yetdog]

Not for the labels. They get 3rd parties (Apple, Real) to handle that aspect. They sell songs for the wholesale .65 according to the article, and that's what they pocket.

Re:Profit Margins

[Leo McGarry]

That same argument has been applied to the pharmaceutical companies. It was bogus then, and it's bogus now. Yes, it only costs the company twelve cents to produce each pill. But that's only for the second pill. The first pill costs four hundred million dollars.

When you say that "digital downloads are pure profit," you're assuming that the record company has already recovered its costs. This is practically never true. The only reason the record companies are able to stay in business at all is because a small number of blockbuster artists make them a fortune, which subsidizes all the music they sell that never breaks even.

If you want to irrationally hate somebody, knock yourself out. Of course, it's basically equivalent to irrationally hating Jews or black people, but hey, it's a free country. All I ask is that you base your irrational hate on things that are at least true.

Re:Profit Margins

[Twanfox]

The real problem is that when you sell the 3 billionth pill, they have recouped their costs to make that product. For a bottle of 30 pills, that's only about 111 million sales. Note, though, that even though they've recouped their costs, the price never quite seems to go down to the price of over-the-counter drugs.

And while that's a fair comparison, to the music industry, that just doesn't apply. See, they 'advance' some amount of money to a band wishing to get its music produced. The recording studio then charges the band for use of their studio, which takes a huge chunk of money out of that advanced money. Net effect to the music industry? They paid a band some trivial amount, and got a set of songs recorded. They didn't incur any costs for the band making the recording, they charged them for it.

While you can argue that there is money spent in manufacturing, sales, production, and getting the products on the shelves, often times 'early teasers' for up and coming bands are given for free to radio stations to give away and play on the air. How much does that cost, in terms of materials? Few thousand?

Quite a bit of the money goes to people who don't really deserve it, the recording studio. It would be one thing if it were going to directly support the band, but unless you're a Big Name(tm), you generally don't have the clout or backing to negotiate terms. This hate against the recording studios isn't irrational, it is in some ways very legitimate. Convicted of price fixing, seeking to subsidize their own failures with the success of a few bands rather than simply dump said failed projects, and destroying any kind of copyright that the band holds over the music by getting legislation passed making such things 'works for hire'. Ya. These are really people that we want to do business with.

Re:Profit Margins

[Welsh Dwarf]

And you're forgeting that 'production costs' are taken off the Artists 10%. Which means that by the time a record 'breaks even', the record company already has a 900% return on investement.

There's a link in the /. archives that explains this in detail, but I'm too lazy to go look it up again.

Re:Nope

[RobotRunAmok]

Never paid for it in my life, and I'm not about to start. I guess I can be proud of that.

Whaddya proud of? That you're 12 years old? Sure, great, here's a cookie...

Price Elasticity

[irhtfp]

If they raise prices, it will drive more people back into Kazaaland. At the margin, some people will be willing to pay $.99 but not $1.09. The curve that describes this behavior is by no means linear. I would think that Apple has done a fair bit of research to determine where the optimal price point on this curve is.

It will no doubt change as competition (i.e. Walmart, et. al.) enters the market. It's one of the most common fallacies in business to raise your prices to make more money (or conversely to have a sale). It takes careful research and testing to determine the correct price point to maximize profts. You can't just decide to raise more prices to get more money.

Re:How to eliminate MP3.

[Tree131]

Very few sites sell MP3s anymore. The one in russia just got shut down or in the process of.
Napster sells them in DRM protected WMA, so does Walmart (I think).
Apple sells their songs in AAC format, which also has some sort of DRM on it.

Hmph

[delta_avi_delta]

The prices of songs via mp3 are already maintained at an artificially high price. This ensures that the price of downloading an album via mp3 is roughly synonymous with the price of purchasing the album in a large retailer. Since the user is paying for "shipping", and packaging and materials are non-existant, it seems to me that even dividing the pie between the distributor, the record companies, and the artists, there's more than enough to go around as is. There's no justification for asking us to pay more for mp3s. Perhaps if they paid for our cable connection...

I was hoping...

[Quiet_Desperation]

I was hoping to see the end of the album format, with the exception of concept albums or soundtracks or long classical works and such. Artists would just release a new song when they had one worth peddling.

Wal-Mart to the rescue!

[Shivetya]

Actually I wonder what kind of contract Wal-Mart has with the major music labels? I would suspect that any increase in fee would first require voiding or extensive reworking of the contracts that are outstanding.

My concern, if the labels get an increase in their fee what is too stop these retailers silently increasing their "costs" behind the scene?

Frankly the labels get too much of a slice of the fee as it is. I would like to see how much is actually given to the artist per sale. I would suspect that a lot of older music gives less than a cent per sold song to the original artist.

Higher than 99 cents? Only if I can get it in the format and quality I want. Only if I have a permanent right to have the song at my disposal. Get near 1.99 and it they can kiss the business model good-bye - which may be what they are after so later down the road the can release their own services.

All this begs the question, if the per song fee increases what happens to the all-you-listen-to sites like Rhaposdy and Napster?

not MP3 - AAC

[Anonymous Coward]

Apple doesn't sell MP3 files, only AAC & Audible.

btw, the link doesn't work either

Can't be done

[redune45]

I don't know if people agree with me, but here's my rant.

Currently on iTunes a whole album costs $9.99, now I can walk into a music store and get the actual CD for $14.99.

Personally, if its only five bucks, I'd much rather have the CD. You get a pernament backup, the song lyrics and all of the other extras.

If you buy it on iTunes, you have to make sure to burn it yourself or lose it forever, and you don't get the liner notes etc.

Now, if the price per song increases, I'm guessing that the price of an album would increase as well. So that brings the price of buying the album online very close to the price of buying it from a brick and mortar store. So the arugment for buying online is even smaller.

It will be interesting to see what happens here.

Re:Can't be done

[WhatAmIDoingHere]

Do you go to Best Buy when you're shopping for hardware, or do you go to NewEgg/TigerDirect/PriceWatch? Do you run out to Barnes and Noble whenever you hear about a book you'd be interested in reading? Do you go to.. I can't think of any stores that sell DVDs other than Wal*Mart, but do you go there or do you hop on Amazon?

Getting stuff online is easier. It's faster. And, even if it's by a few cents, it's cheaper. I've spent over $300 in the iTMS and my iPod's got plenty of room left (for my "other" musics), to me it's a great deal and I can find stuff that's not at my local music stores without leaving my chair.

You mention "pernament backup" when you buy from the Brick and Mortar store, but how easily do CDs get destroyed?

Re:Can't be done

[sahonen]

Correction, that's $9.99 of compressed DRM. Or I can pay $15 and do whatever the hell I want with the music I legally purchased.

Re:Can't be done

[beanlover]

In the U.S.A. I believe you are correct. In Canada (I'm a U.S. citizen) they pay a tax on blank media that is "given" to the music companies so I think it's legal for them (Canadians please correct me if I'm wrong).

If I owned a shop in Canada I would set up for exactly that.

B

comparing to ringtones

[Jjeff1]

I read an article about this. It seems one of the reasons for the cost increase is to compete with ringtones. Ringtones are going for 2 or 3 dollars each, or you can get a subscription for 3$ a week.

This of course is insane. 2 or 3 dollars for a ringtone out of my tiny cel phone speaker is barely even something you can call a song.

Anyway, that's the logic behind it. Ringtones don't target people who want music. They target people who need to be hip and with the pop culture, so clearly people behind this are missing things.

Re:Nope

[FlopEJoe]

"Never paid for it in my life, and I'm not about to start. I guess I can be proud of that."

We're still talking about MP3s, right?

Hate to reply to my own post... LINK

[AvitarX]

Hate to reply to my own post... LINK

I hate to nitpick...

[PhotoBoy]

... but why title this "MP3 Download Prices to Rise"? Can you actually legally download MP3s these days? Allofmp3.com sounds decidedly illegal and everyone else offers various flavours of DRM restricted shite. Surely "online music stores to increase prices" or something would be more accurate?

Simple solution...

[Sebby]

Apple (or another store) should drop any labels that want to increase price.

Sure this could drastically decrease their count of their catalog, but the labels might get a clue: 20% more of no sales is $0. Then they'd be begging to be added back with the old price.

HIGHER? Wrong sign on that delta, guys...

[mad.frog]

IMHO, the prices are too high already, at least for me.

At a buck a track, I *might* consider buying 'em if they were losslessly encoded at at-least CD quality, and included metadata, "liner notes", etc... basically all the goods I can get at roughly the same price in a physical CD.

But in a lossy, DRM-infested mess... why the hell would I pay the same amount?

If they get the price down to 25 cents... or maybe even 50!... then I might consider it. Until then, it's back to the used-CD bins at Amoeba for me.

Re:HIGHER? Wrong sign on that delta, guys...

[mad.frog]

You seem to think they would WANT to sell a media-less product that has absolutely minimal costs to them... ;-)

Yep. IANAB (I am not a businessman), I am just a humble engineer, but I have this crazy idea that an industry that suddenly finds that its cost-of-goods has dropped to essentially zero (or reasonably close) should be dancing about, singing hallelujah. As someone pointed out, the music industry seems to think it's in the business of selling small, round, plastic discs.

Yeah, yeah, yeah, piracy and all that. It happens. Deal with it. The software industry has.

quick thoughts

[jdunlevy]

the article:

Universal and Sony BMG are less keen to put prices up

I can't imagine it will happen, but it would be interesting if Apple were to let TimeWarner and EMI (if they're the ones that want it) titles go up in price but keep Universal, Sony BMG, and independent titles at the current 99 cents retail. Watch TimeWarner and EMI online sales dry up -- to the benefit of the labels keeping retail prices at 99 cents!

the article:

The music industry is apparently unhappy with Apple's increasing share of the market

What? Thanks largely to Apple, the "music industry" now actuall has a market. Without iPods and iTunes, and the Apple Music Store, this money -- 65 cents/song wholesale times some HUGE number -- wouldn't be going to the "music industry" at all.

higher than 99-cents and i'm out

[SamSeaborn]

I can't remember the last time I downloaded a song "illegally".

Since iTMS came to Canada I just spend the 99-cents (that's about 82-cents US, by the way) -- it's much quicker, easier and instantly satisfying.

But if they bumped it up to, say $1.20 per song -- I'll probably go find me an eMule client -- not that much more money, but psychologically 99-cents seems negligable. Above a dollar? That's real money.

Sam

Exactly. And Jobs says...

[Anonymous Coward]

You charge people $.99, and you use the marketing research that says, when people see something ending in 99 or 95, they tend to round down. Take a tag that says $9.99, show it to enough people, and you'll get an amazing amount of "that costs $9", because lots of people won't round up when they read it.

Jobs knows that if you charge $.99 for a song, people who round up will say "A dollar for a song? And no lawsuits? Not bad..." People who round down will think "These things are almost free" and think they're getting $1.00 off every time they download.

You push that extra few cents, and people stop doing that magic rounding trick. Now, because it's $1.09, I'm gonna take a wild guess any say the same people who round .99 down probably round $1.09 up, and they'll think they're being overcharged by a dollar every time they download.

Re:Exactly. And Jobs says...

[Life2Short]

Am I the only cynical bastard who thinks the labels aren't fishing for any $.09 rise? I am thinking more along the lines of raising "selected" song prices to $5.00. Sure, you can still have the filler tracks for .99, but the "hits" would probably go up big time.

Re:Looking Better Every Day

[confidential]

Ok, ok, I'll bite..

Seriously, I get tired of hearing this "It'll cost you $10,000 to fill your iPod from the music store!" argument. Truth is, you can easily import your own cds... If you don't have enough CDs to fill your iPod, then you can go buy a used CD for $4 at a local record shop and work it out to about $0.20/song. I personally don't fill my iPod up on purpose, because I use it every day as a disk drive... but that's another subject...

The other great thing? If I import my music myself, there is no DRM... period... yes, even when using AAC or Apple Lossless. Perhaps it's just me, but I like knowing that I can always re-rip my music into the format of the moment (no putting up with a set bitrate by my provider) and still be able to listen to it on any (modern) machine... including sending it to as many friends as I want, if I so desired. Much better than renting my music that will only work on windows machines when it wants to let me.

Some questions...

[singularity]

The music industry is apparently unhappy with Apple's increasing share of the market - the firm sells about 65 per cent of songs sold online. The arrival of cheaper iPods is likely to give the firm an even larger share of the market.

I do not understand the music industry's complaint here. Someone (Apple) is selling their music online and they are unhappy about this? Were they complaining when Virgin, Best Buy, and Tower Records were gobbling up the physical CD market?

What complaint could the music industry have against Apple? As long as the music is being sold, what does the music industry care? They agreed to Apple's contract.

Cheaper iPods will also lead to Apple selling MORE songs. That is the reason that Apple will have more of the market. Yeah, the music industry definitely has a right to complain - one of their resellers will be selling a lot more of their product. Gotta hate it when that happens.

Meanwhile it was confirmed on Friday that the European Commission is investigating allegations that British consumers are being ripped off by Apple's iTunes service because it charges more for downloads from the UK site and does not allow punters to buy tracks from other country's iTunes sites.

I always thought that a Brit's inability to buy from another country's iTunes store is because of licensing restrictions. That is, that Apple is not allowed to sell a song to a Brit that Apple only has the French distribution rights to.

I suppose the EU is supposed to rectify a lot of these problems, but I daresay that the contracts between Apple and the music industry follow the older, country-specific licensing agreements.

How much of this could also be chalked up to England still using the Pound, and not going over to the Euro? Will the EC only be happy when it costs EXACTLY the same in England (with the pound) as it does in France, with the Euro? Would Apple have to change prices daily to keep up with the exchange rate?

(Yes, I realize that English iTunes is still way too expensive in comparison and should be brought down. I am just not so quick to blame Apple. Maybe the contract the music industry came up with in England just charges Apple more per song?)

Re:Some questions...

[DrSbaitso]

The RIAA doesn't want any one company, be it Apple or anyone else, to get too much of the market. That would give them too much bargaining power! With a bunch of weak market shares, the RIAA can dictate its wholesale price. Now, Apple can tell them it won't pay a higher price and have the muscle to back up its threat.

Re:My download music prices DOUBLED the last month

[enosys]

AllofMP3.com is under investigation by russian authorities. There's also Media Club in Ukraine and it charges .015 per meg now.

Anyways, I don't see what's the point of using places like that. You're not actually paying the artist or record lablel. You might as well get your music from usenet and P2P.

Rhapsody

[Everguide]

That's why we have Rhapsody. $10 a month for unlimited music streaming (and they just broke 1 million songs). Its an amazing service.

It's all in the wording...

[Jtheletter]

From the article (emphasis mine): One top label said it would not raise wholesale prices now because the market was not yet mature enough for an increase.

This statement right here says it all. One might initially read this as a bit of sane thinking from one of the labels re letting the industry grow, however when you think about what it means you see that the greater plan is more stifling prices.
The only current cost increase that the RIAA could justify is annual inflation. Their distribution costs are taken up by the online reseller (iTunes, etc), their printing costs are essentially zero, just convert a master song copy to digital format and deliver to online distributor once. And their advertising costs remain the same since they are not (to my knowledge) producing any advertisements that forward online music buying specifically.

The only explanation for the price increase is that they simply want more for the same or less service. And the wording of the one abstaining record label here says it all: not yet mature enough. i.e. They planned to milk consumers for all they possibly could once it caught on, but most of them have gotten tired waiting for the plan to come to fruition and have jumped the gun. In other words if they had waiting another X years/Y% user increase/[insert marketing threshold here] then everybody would have been on board for this as they'd planned it all along.

Could someone who is a lawyer or has the time to research the appropriate links please explain how the RIAA in doing this is NOT acting as a monopoly or cartel? As I understood it, price fixing by an industry that is not justified by some external cost increase is explicitly illegal, regardless of whether it's a smokey back-room deal or done in the public eye under the guise of an "association".

follow the bandwagon or miss the concert..

[klang]

Dear RIAA

For every artist you represent, there are 1.000 artists you don't. If we are not allowed to sell your music, we will start taking all unknown artists into our store and let word of mouth decide. We will do this after buying Apple Records and make deals with every lable we can get into this. See those white headsets aroud the city? Each one of those are connected to one of our customers.

Yours faithfully,
iTunes Music Store

PS: we are going to sell the music of unsigned and independend artists no matter what you do, so follow the bandwagon or miss the concert.

Funny, I thought prices should DROP...

[DarkEdgeX]

$1 per song sounds OK because it's at that magical price point where most people will just say to themselves "Ahh, it's just a buck". The thing is, $1 per song is a bad deal. Let's assume the average number of tracks (songs) per CD is 12. If you wanted to get the full CD, that's $12. Except now you're getting it in some lossy format (AAC/MP3/WMA) that may be DRM'd (I'm thinking of other online music retailers like Wal-Mart, which I think uses Windows Media Audio (not sure if it's DRM'd or not)).

I know that not everyone wants every track, but when you're getting it in a lower quality format and at your own expense/time (bandwidth/time taken to download) $1 is a bit of a rip off.

If anything, the price should be dropping to $0.50 or $0.75. That'd actually encourage people like me to use these online services. And you'd think the music industry would like it because it's less physical content they have to manufacture and ship out to stores.

Hiking the prices just goes to show people that they can't trust the music industry, and that any trust that was fostered was misplaced.

Re:Funny, I thought prices should DROP...

[IAmATuringMachine!]

Well, for some clarification, you can get a bit of a deal when you buy the whole album, usually $9.99, to make it cheaper than physical media. Similarly, if they were for some reason to have those strange sound effects CDs with 300 tracks on them, they'd still probably give you the whole set of tracks for 9.99.

Re:Funny, I thought prices should DROP...

[MarkedMan]

It seems to me that, from the point of view of the record labels, when most people buy a CD they are paying 15 bucks for the 1 or 2 songs they know and like. The others are just lagniappe. So, again, from the point of view of the labels, they are dropping the current per-puchase revenue from 15 bucks to a single buck.

BEFORE you shout "FLAME ON", Johnny, I'm not saying I think this is a GOOD THING, just that it may be how the record labels view it. It explains why they are so against music downloading.

Re:Sounds like OPEC

[anonicon]

Not a bad idea, but I think they already have an existing cartel name. The Music And Film Industries of America, or MAFIA for short.

Re:Nice link....

[Anonymous Coward]

Any time you are using a single source/vendor for all of your music needs, you are at the mercy of their management (directly for profit motive or indirectly through the negotiation skills with the RIAA). Oh well, all the fanbois will praise Apple and claim it is about time they raised the price! Now we can pay the same as a real cd in the store even though distribution, packaging, storage, and inventory costs are not required for the digital copy. My god man, think of the artists.

Milking the market

[a3217055]

The main idea is to milk the market. Have a bunch of recodrings for every major age group, from youngsters, teen, college students, 25+ , 35+ etc... and make them pay $15+ for them.

And then charge the group with the most demand inelasticity the highest price, this is even more than the $15 ammount. The RIAA does not understand that the the music industry is changing; or believes they can still stop the change and it is a matter of time before they change or be changed. They will fight tooth and nail so they can reap their profits.

After all record companies make money from borrowing money from financial institutions. And these institutions charge them interest rates, and these institutions want their money not matter what this includes the 10% interest etc...

Also due to the extreme large spectra of artists the quality of music has gone to the euthanasia clinic. Way too many young inexperinced people playing the tune of the music producer. Most people listen to this stuff because they have no alternative choice; for background music. Let the RIAA milk the market, it is time we put a cieling on the price of music. I say no less than 50cents and no more than 99c. And have certain protections for the consumer. I mean there are two ways to make money, charge a higher price or sell more units. Selling more units that is to create demand is hard when all you have to sell is crap so they do option number 1) ; which is to raise the price.

It is time most consumers got smarter and said hell with the current distribution. The RIAA is nothing but a conglomertation to give people the illusion of happiness, after which they will milk you for your money.

Let them raise prices and let's see what happens... there will be less songs sold.

adding insult to injury...

[Thud457]

"whenever it's about to expire, various Vested Intrests will simply lobby their CongressCritter to have the Act extended."

"Steamboat Willie" wasn't even that good a cartoon!

Listen guys, you've gotta stop!

[Sj0]

"Listen guys, we've been over this a thousand times before. We don't really want to sell music, we want to screw people, and you guys selling popular music at reasonable prices really cuts into the number of college kids we can sue for downloading music!"

I dont buy cd's..

[SlashDread]

because they are too expensive, and way to little goes to artists. MUCH too much seems to go to "distribution".
Yeah, Im gonna pay MORE on a digital download. Where "distribution" can be almost cost-less. Sure. Uh-huh.

I would love variable pricing...

[porcupine8]

IF it included paying slightly less for back catalog songs as well as slightly more for the top 40 or whatever. Hardly anything I buy is a recent hit, and I can easily wait til a single is off of the charts to buy it if I do want it. If I could get older songs for 10-20c less I'd certainly buy more of them.

Unfortunately, it sounds like what the record companies want is to just raise prices on the popular songs and keep the 99c price on the older songs... I don't think that would be a smart move. There are enough people who think 99c is *barely* an acceptable price for a single song, once you go over the dollar barrier I think they might see sales drop enough to balance out the extra few cents. If they lowered prices on older songs (even only ones, say 5 years or older), though, they'd probably make it up through increased sales on that music.

Re:Stealing MP3's?

[YrWrstNtmr]

It's along the lines of when someone 'steals' a db full of personal data from the bank. The bank still has the original copy, so nothing has been 'stolen', right?

It is not theft.

[AtariAmarok]

"When I use my printing press to print money, I am guilt of counterfeiting. However, I have stolen a microscopic amount of money from every person with that currency"

No you haven't. All you have done is commit the crime of counterfeiting. You are attempting to conflate the definition of theft beyond all meaning where any activity possible can be called theft.

"In the same way, when a portion of folks take someting they are not entitled to"

Now you are off-topic. Duplication and taking are very different things.

You are caught up in a fallacy that "if it is illegal, it is theft"

Re:I don't believe it

[glenstar]

No no no. Apple does not pay the artist... the label pays the artist.

Re:I don't believe it

[redivider]

Actually, it's more like $0.65 is given to the label, which then gives the artist a % based on what their contract/royalty rate is. That may be nothing, depending on if the label successfully ripped off the artist or not.

According to the deal we have with our (independent) label, iTunes pays out $0.67 per song download and then the distributor and label take their cuts and then we get the rest. With a major label, that "cut" is usually going to be a lot bigger than a indie label's cut.

Either way, the point is, Apple takes whatever's left over after they pay out the 65 or 67 cents or whatever it is. They don't split anything with the artist.

You raise a good point.

[AtariAmarok]

"It's along the lines of when someone 'steals' a db full of personal data from the bank. The bank still has the original copy, so nothing has been 'stolen', right?"

You raise a good point. However, to continue with the analogy: is it stealing when you get into someone's data files with permission and copy them? As in nabbing those Pantera files from "kewlKazUser4005"'s hard drive on a p2p service after he has shared them for your benefit?

Re: ringtones are free :)

[monophaze]

http://www.walmart.com/music

New to the world?

[Safety Cap]

> One suggestion is that labels want to introduce variable pricing - so they can charge more for top selling tracks.

You know what? I'm all for it... if it means they are willing to discount the less-popular stuff in exchange.

So, you think that the record companies, who are already in a frothy panic because they think they're losing all their profits to those "p2p pirates" are going to suddenly become magnanimous and cut you a break by lowering their profit margin?

*chuckle*

Let me guess: you also swallowed that line about how the government will restore those pesky civil liberties you used to have once the War on Terrah is won.

How do they justify it?

[macemoneta]

How can the music industry justify charging more than about $0.05/track?

I get my DVDs through Netflix, and pay about $1 per DVD (the whole thing, with any extras that may be on the disk). Netflix recently lowered their price (so now I pay about $0.90/DVD). Those are regular, effectively unprotected DVDs to watch anyway and on any device I choose (I sometimes rip them and watch them on my PDA).

Blockbuster and Walmart are competing for the same customers, and they charge even less.

CD music costs a lot of money to produce, but it doesn't cost 100th as much as a major movie (probably less than 1000th). Why are people paying so much for so little? Where is the perceived value?

I stopped buying major label CDs a few years ago, but increased my DVD rentals dramatically. There's no value in pirating DVDs at those prices. Studios are even moving the DVD release data closer to theatrical release (to reduce their costs).

While movie industry seems to be adapting, the music industry seems to be engineering their own demise. Not that anyone will miss them. Independent artists seem to be where the good music is these days, and they are much more reasonable in pricing their product.

Major labels dont get it.

[Datasage]

There is something wrong, when my musican friend in malaysia can produce an album for under $10,000 while its almost impossible for a major label to produce it for less than $150,000. Yes there are ecomonic diffrences, but last i checked, it was not that great.

Listening to his album, most of the songs are good. When is the last time you bought a major album with more than one or two good songs? I thought so.

Record labels go for quanity, not quality. If they can get an artist to make an album with a couple hits but mostly filler, they can save other hits for other albums. Then they get consumers to pruchase all albums when they were only going to listen to a couple tracks.

Single downloads kill this model. Because now its possible for consumers to download the hits, and just leave the rest of the tracks be. The idea of raising prices is to get the album revenue out of just the hits.

This may work if they take an adaptive pricing model. They charge alot for the hits, and less for the misses.

The music industry is changing. Label, relying on album sales and licencing revenue, are in a bad postion. Artists dont make much money off of album sales as it is, but it helps promote them and thus increases thier other revenue sources such as concerts and sponsorship.

Label will have to move from an album sales company, to a promotional/financing services company. If they dont, they will become insignificant. But on the other hand, if they still can keep getting musicans to sign stupid contracts and keep funding and create another revenue source by sueing pirates, they might be around longer than they should.

Not everyone wants CDs...

[ralinx]

Sure, a lot of people are like you and prefer to buy the actual CD. There are however also people like me... if i buy 10 albums in a store it costs me 150$ while it would only cost me 100$ on iTunes. But if i were to buy them in the store, i would also have to take the time go to the store to pick them up, and after that i'd have to rip the CDs so i can transfer them to my iPod. After that, the CD are put away and the next time i'll use them is if i want to rip them again. So for me, iTunes is not only cheaper, it is also more convenient than buying actual CDs because it takes me less time, and i don't have a bunch of CD's lying around. I also take weekly backups of my iTunes music library on a seperate harddrive so the possibility of losing my tracks is rather small.

oh and yes i know i can only listen to my iTunes tracks on 5 concurrent pcs... but seriously, i only have the songs on my iMac and on my iPod. So that only counts as one Authorized Computer because iPods don't count towards your authorized computer total. To me, the DRM is not an issue and if it was, i could remove it with Hymn

OT, but it's been bugging me for ages....

[SPYvSPY]

This story really shouldn't be filed under Apple at all, but it caused me to (once again) think that the headline was quoting Apple Computer Inc. I know Slashdot is determined to be the most asinine useful web resource on the net, but why do section stories under Apple have headlines that misleadingly attribute quotations to Apple?!

Supply and Demand?

[The-Perl-CD-Bookshel]

Clearly, simple supply and demand does not work here. Take a normal example: McDonalds could sell millions more Big Macs if they lower the price to $0.50, but they wouldn't want to because they are not equipped to deal with that demand and their current operating assumptions work at the $2.00 price.

However, in this case, there is almost unlimited capacity to scale the operation. Why not take advantage of this new market condition like Vanderbilt did when he revolutionized the steamship industry. He sold tickets for a lower cost and padded his slim margins by adding value and revenue to the trips by selling food and drink. The record labels wouldn't even have to sell other services because they easily cover their operating margins.

The record companies are in the unique position to lower the cost of a song to say, $0.75 and take advantage of almost costless scaling. Why wouldn't they?

The simple answer I can think of is that the quality of the product that they offer is so poor that exposure to this music will lead to less return business. Take a tip from the late, great Sam Walton and discover the power of discounting.

My Last DRM Experience

[CoderB]

My girlfriend downloaded a legal DRMed copy of a song recently so she could learn it for a karaoke party. She asked me to fill a CD with it so she could play it on her way to work.

Not knowing how many times she could copy it (she didn't know when I asked) I opened windows media player, created a playlist that filled the CD and clicked 'burn to CD'. The program began happily converting the tracks to the CD format until it reached the burn limit at which point I got an error message.

Here's the kicker:

I hadn't actually burned _anything_ - it just converted the format for the burn. When I adjusted the playlist, I couldn't burn anything. It had already marked all 10 burns that she paid for as done. DRM is _great_. :\

I ran a line out from the sound card out into the mic input and recorded an mp3 for her with a command line utility I have, then burned that to CD instead, but what a pain in the ass.

Now they want to charge her more money... omg.

99 cents is already too much

[melted]

You can buy a used CD on half.com for $8-10, delivered to your goddamn door. That's uncompressed, un-DRMd audio, and the booklet is included, too.

They should sell the stuff they're smoking instead, it's apparently very strong.

What a racket!

[Inaffect]

The precise reason that illegal file sharing of music has been so popular is because music has been overpriced for a long time. Once these labels recover the initial production costs of the album, it is nothing but profit. Most concerts are organized for the artist to make a buck, but even then the labels take the lion's share. The labels seem to enjoy profiting at the expense of both the listener and the artist. People who avoid buying music at all costs simply see through this. The others don't, which is why you see a bunch of crap on the Billboard charts and particularly the iTunes "Top Downloads". Who is buying this crap? Not anyone with a brain

Moral questions

[gidds]

Maybe technically so, but consider this.

Take a commodity: sugar, say. If I sell sugar, I can do so for any price I wish. I can also sell sugar of any type or condition, provided that a) it's safe for human consumption, and b) I'm honest about what's in it. I can choose to sell for a ludicrously high price, but that's okay because someone else down the road can sell for a lower price, and unless I can provide people with a genuine reason for preferring mine, they'll buy his. So it's a free market; it tends to regulate itself.

Music isn't like that, though. If I want to buy a track from an RIAA artist (legally, in my country), then I have to buy from an RIAA-approved source. I can't go and get the same track from another source. So it's not a free market in the same sense; it's more like a cartel. Under those conditions, maybe it's not quite so just for the cartel to choose whatever price it likes?

Music is also different in another major way, as discussed in other comments: if I steal some sugar, then not only do I get to have it, I'm depriving the original owner. But if I copy music, although I get the benefit, the original owner doesn't lose anything. So copying music is only like theft of physical objects in some ways; in others, it's different.

These two reasons make me think that although music copying is wrong according to the law, it's not a wrong of the same type as physical theft. And maybe it's a wrong we need to reconsider.

Re:Moral questions

[dubious9]

Under those conditions, maybe it's not quite so just for the cartel to choose whatever price it likes?

So don't buy it. There is plenty of good music from independant labels, and many smaller bands give their stuff away for free on the internet. You have no right to, say, a Metalica song no matter how unfairly they price their songs. If you want it, you pay their price. That's the law. Your argument is flawed. There are other producers of music.

But if I copy music, although I get the benefit, the original owner doesn't lose anything.

Flawed logic. You're assuming that a consumer wouldn't go out and buy it if they didn't have any other avenue. Theft isn't the right word, but copyright-infringement *does* cost major labels money. Yes, you may be an idealogue and never buy an RIAA record. But since you are standing up for ideals, why are you listening to the music that the RIAA funds ??. Does the RIAA lose as much as they say. Probably not. Has music-sharing cost them money? Yes, and I challenge anybody to argue that assertion.

So copying music is only like theft of physical objects in some ways; in others, it's different.

Correct, but an analogy to drug cartels doesn't make it right to steal drugs. Jesus, I wish freakin people would get it through their heads. Though it's not stealing, it potentially costs labels sales. It's the potentially part that makes it different then theft, but it makes it none-the-less wrong. Don't anybody kid yourself. You have no right to distribute or recieve other people's music. Nada. Zilch.

That the RIAA is evil doesn't make any difference. If you don't like the RIAA, don't listen to any of the music they provide. If you do, you're a fucking hypocrite.

Do I wish the RIAA go to hell and die? Yep. There's no need for them when individuals record, produce and distribute their own music at minimal cost. Promotion and investment can be handled by radio stations. Though this has the scary effect of Clear Channel running the music industry even more than it is.

However, that does nothing to the fact that, by and large, illicit music sharing costs millions of dollars. Billions? Maybe, I don't know. But don't try and make yourself feel good by justifying it.

Re:Moral questions

[gidds]

So don't buy it. There is plenty of good music from independant labels, and many smaller bands give their stuff away for free on the internet.

That's a great idea generally, but it's not a solution. Sugar is sugar; whether it's granulated or caster or whatever, and whoever supplied it, it has pretty much the same effect. You wouldn't complain because someone put the wrong sort of sugar in your tea, would you?

Music's different. People don't want some music, they want some specific music. Okay, much of the time their decisions are driven by marketing, familiarity, and comfort more than by quality, originality and skill, but either way music is not a commodity in that sense.

an analogy to drug cartels doesn't make it right to steal drugs.

Erm, I never mentioned drugs! I just mentioned sugar. (Though I'd be prepared to argue that processed sugar has drug-like qualities for many people living in the Western world...)

And I'm not advocating stealing. I just think that we might want to reconsider what we define as 'stealing' in this context. Until then, the law is the the law and breaking it is by definition illegal. But laws are not immutable...

Re:Moral questions

[AndyChrist]

"Does the RIAA lose as much as they say. Probably not. Has music-sharing cost them money? Yes, and I challenge anybody to argue that assertion. "

I don't know about everyone else, but I went YEARS without buying any music because I never heard anything I liked ANYWHERE. I started buying CDs after I started downloading music. Quite a few of them actually.

Without file sharing, that's hundreds of dollars the recording industry wouldn't have seen.

Re:Monopoly by artist?

[Macadamizer]

"If only one recording company owns the rights to the Beatles, then they can charge whatever they want for a copy of a CD."

Yep, that's the way the music industry works. You could say that whichever record company owns the rights to sell Beatles songs holds a "monopoly" on Beatles music -- and therefore there cannot be any price-fixing or other collusion, because there is no competition in the market for Beatles music -- there is only one supplier.

It's like Coke. There is only one supplier for Coke, and they can charge whatever they want for it. The fact that Coke basically costs the same as Pepsi is because of marketing and economics -- not collusion or other anticompetetive behavior. Pepsi and Coke compete in the same market space, but each is a monopoly.

Music, however, is different. If Coke prices got too high, people would start drinking Pepsi for the most part. However, if Britney's CD prices get too high, that doesn't mean that people are going to start buying Cannibal Corpse CD's instead, just because they are cheaper. The products just are that fungible (although it certainly seems that way...).

So yeah, these are monopolys. But monopolies are not illegal, in and of themselves. Misuse of monopoly power is where most monopolies get in trouble, and it is usually when a monopolosit uses its power to drive competetition out of the market in order to raise prices, or uses its power to keep others out of the market, that sort of thing.

But simply having a monopoly -- especially when the monopoly is a "natural" monopoly, like with exclusive recording contracts -- is not in and of itself illegal, or anything to be feared.

Right.

[Heisenbug]

It's along the lines of when someone 'steals' a db full of personal data from the bank. The bank still has the original copy, so nothing has been 'stolen', right?

What happens in that case is, someone illegally 'accesses' a computer system, illegally 'copies' sensitive data, and then illegally 'steals' money using that data.

Saying that the data was stolen is convenient, but you're right when you point out that stealing isn't really the appropriate concept in that case.

Robinson-Patman Act

[Otto]

There was also some speculation as to how consumers could deal with this.

Mainly, they can sue. It's called price-discrimination, and it's illegal.

Now, proving it using the Robinson-Patman Act (1936) is not the easiest thing in the world to do. There's loads of exceptions, sort of thing. But nevertheless, public outcry and a highly public case against the first person who tried this sort of thing would likely be enough to put a stop to it.

Amazon.com tried something like this several years back, didn't they? Different customers got different prices. They dumped it, I think, because of all the attention it got when people noticed it happening.

Re:Stealing MP3's?

[fermion]

Well, it depends. If I steal a copy of a 50 cents song that is already released, and just play it on my mp3 player or at my house or in my car, I have deprived 50 cents of their fees, but haven't really violated any other laws.

Likewise, if I steal a bunch of data and just have it around for kicks, then I have broken the law, but since I have not profited off it, very likely no one will know I stole it, and there is little chance of prosecution. Now, if I start bragging about the theft, or start selling it, then a crime will be created and more likely prosecuted.

To further push the analogy beyond it's limits, the difference between a database of person identifiable information and a song is the the later is public information, while the later is not. To make the analogy comparable, one would in fact have to sneak into the recording studio and steal songs that have yet to be released. This likely does happen and is, and has always, been prosecuted quite differently from simply personally making a copy of legally acquired album. There is after all a difference between copyright violation and theft.

Which is to say stealing MP3s or databases of personal information is bad if one has to go through illegal means to get it. Which is why the DCMA is so broad and insideous.

I think quite a few people probably have gigabytes of personal information from the banks. It does not seem that hard to do. Most proabably just keep it as trophies, showing it off only to the most trusted freinds. It is only the greedy that get caught.