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

[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

[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

[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

[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

[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

prices?

[MindDelay]

you mean we're supposed to pay for mp3s?

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?

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...

HERES THE LINK!

[keeleysam]

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

[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.

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.

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.

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?

[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.

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...

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.

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?

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.

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?

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.

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

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.

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: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: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.

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.

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: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?

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.

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?!

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

[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.

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.