Music Labels May Seek Higher Download Prices

punxking writes "Some of the big music labels are now clamoring to raise prices for digital music downloads. From the article: 'Music industry executives said introductory wholesale prices for digital tracks had been set low to stimulate demand for online music sales but the success of Apple's music store had prompted concern that they may now be too low.'" Relatedly, the BBC is reporting that iTunes is under investigation in Britain for charging disparities between the UK and the European continent.

Comments

Costs?

[BWJones]

Can I simply ask somebody who really knows? What are the costs associated with digital distribution versus printing and distribution of physical media? Is this simply a case of music labels being greedy? Come on now. This is an industry that simply does not get it. Music sales declined through the late 90's because the music that was being promulgated on us by the music labels sucked. Big time. Throughout the entire decade of the 90's, they waited for somebody else to innovate the digital distribution of music (Napster), and waited for Apple to do it right with the iTunes Music Store, and now they want to profit on top of all of others hard work. I guess it is a business model that works, but come on now, have some respect for what you do! Are you making a profit with iTunes with the current pricing scheme? It would certainly appear to be the case, so why are you now trying to increase prices? The cost of distribution through the Apple iTMS has not changed. Apple has not changed the terms for distributing music in your contracts. Apple is not making any more money on it than previously agreed. I guess we should not really be surprised though. Remember when CDs first came out? Remember the cost of a vinyl album at the time ($7)? Remember the cost of a CD at the time($12-15)? Remember the music industries promise that CD costs would drop when they became popular? Consider especially that shelf space could hold more CD's and the distribution costs for CDs were significantly less than they were for vinyl. Consider that the costs for pressing a CD were/are significantly less than those for vinyl. I would assume that there is an order of magnitude difference in the distribution costs for Internet delivery versus physical media delivery that would make Internet delivery significantly less expensive and thus more profitable.

Here is a prediction: If the price for music increases right now for digital distribution, sales will fall and piracy will increase. Apple did the hard work of market research on what folks want to pay for music downloaded from the Internet and they concluded that .99 cents/song was the sweet spot where they could offer a service, make minimal profit from the songs themselves, and distribute most of the music profits to the music labels. Of course the iTMS should be considered a loss leader of sorts as it drives sales of iPods, but Apple themselves are making almost nothing on music sales specifically.

Re:Costs?

[nine-times]

...Is this simply a case of music labels being greedy?...

Not simply a case of greed. Record labels don't *want* online distribution methods to work. Sure, it saves them money. Whereas packaging and shipping used to cut into the price of a CD, no money needs to be spent to produce more copies of an digital/medium-less album.

However, the fact that iTMS is working means that people aren't buying CDs, which is an indicator that the "music industry" is obsolete. The fact is, you can produce an album on your own and get it on iTMS, use internet/viral marketing for your promotion, and bypass major record labels altogether. We don't need them and there business model anymore, and they know it, but they don't want you to know it.

Their big hope is to convince everyone that p2p sharing is immoral and online music stores are too expensive-- it would cost more than a CD and you don't even get a lossless copy or the medium or liner notes or anything. As long as they can scare us into sticking with medium-based distribution models, they still have a business.

So what I'm suggesting is, this raising of prices is just sabotage.

Re:Costs?

[nine-times]

You can spew crap about how evil the recording empire is, etc. etc. but at the end of the day, sharing copyrighted works is theft.

No, theft is "theft". Distributing copyrighted material without permission of the copyright holder is "copyright infringement". And not all music distributed on p2p is even copyright infringement. Yes, in fact, some recordings are public domain, and some are posted on p2p networks by the musicians themselves.

You can spew all the FUD about how inherently evil p2p networks are, but at the end of the day, p2p networks are morally neutral.

Is this a joke?

[cot]

They want us to download the songs with our network connections that we pay for, in lieu of them pressing CDs and printing inserts, and now we're supposed to pay MORE than you pay in a store for a CD? At $1 a track, it's already not a very good deal. For more than that, the only thing they'll be stimulating is a new resurgence in p2p.

Financial Genius, I tell you!

[drakaan]

"Oh no! They're buying lots and lots and lots of music! Raise the price and stop them, stop them now!"

These are the same people who are trying to say that piracy is the reason that they're not making wads of cash? Did they miss the whole supply/demand/equilibrium price part of economics class in high school (okay, some of them may have gone to college).

Let's see. We have a product that is being sold at a price point that has people drooling, there are very low distribution costs, no need for shipping or inventory maintenance, and people can buy from home. Sounds good...*too* good...let's raise the prices and kill it off.

asshats.

Not just one, but TWO dupes in this article!

[Harik]

The main "iTunes raising prices" is a dupe from yesterday, and "iTunes under investigation in the UK" is _ALSO_ a dupe from a recent article. Jesus christ, Taco, if this were a free-site and you were not getting PAID for it, I could see slacking off. But damnit, you have advertisers and subscribers. That implies a certain level of responsibility. Live up to it.

Dupe posts

[Darth Maul]

It's a shame that all these dupe posts are getting modded down. It's about time the Slashdot editors actually see what a mess Slashdot has become. They seem to post a dupe every day now.

Please, stop modding those posts down. This duplicate posting must stop.

Re:Ha!

[SirChive]

Nope. The music industry is not just a supplier. They are a cartel that has a legal lock on an entire segment of our culture.

They will charge Walmart the same as the other download services because they just don't care. If they drive customers away from downloads and back to physical media it doesn't matter. They own that too.

Bingo

[Hlewagastir]

You see, if they make it painful enough to buy tracks online, we'll all revert back to the old model of taking it up the rear at our local record store for a 25 cent chunk of plastic. Online music sales scare the crap out of the recording industry because they become obsolete the second somebody can simply make their music available online to whomever wants to download it. If recording industry can kill online music sales early, they won't slowly fade away into obscurity as recording artists choose other venues to promote their wares. iTunes has somehow, despite the industries best intentions, (through extremely high prices for what you're actually getting), become a viable alternative to the old way of getting music. Therefore, they raise the price even higher to discourage sales. If the price is high enough, people will return to the old business model.

Re:Dupe City

[Holi]

Fine if it's a dupe then DON'T READ IT.

Some of us may have missed the original and now there are no comments in this article except for replys to your stupid "IT'S a DUPE" post.

If your not going to add anything worthwhile to the conversation then do us all a favor and don't comment.