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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.
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
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Slashdot and OSDN are clamoring to raise subscription rates!
/dev/null... "How are we to justify raising subscription rates if the readers weren't getting the same old shit twice?"
In a move that the OSDN bean-counters believe will give Slashdot and OSDN more cash on hand, Slashdot.org is announcing that they are raising subscription rates to $5.25 for 1000 pages of ad-free* viewing.
More and more frequently Slashdot has been giving its readers the opportunity to read day old news AGAIN! The editors of the site claim that this is part of their overall marketing plan:
Rob Malda (aka CmdrTaco) was quoted in the NYT (vampire sucking required) as saying, "well we give you TWICE the news in two days so we thought it was only right that our subscribers pay a little bit extra!"
Zonk was quoted as saying, "well we give you TWICE the news in two days so we thought it was only right that our subscribers pay a little bit extra!"
While Slashdot does have an e-mail link on their site to allow Slashdot subscribers to report these duplicates to the "Editor on Duty" the editors have admitted in secret taped conversations (on IRC) that the email address is bunk and goes to
* - ad-free only refers to banner ads, not posts to the main page that are made to appear as "stories" when they are in all actuality advertisements (i.e. iPods)
I thought they were just talking about doing this a few days ago...Greedy bastards...sheesh!
I'll turn into a supernova and burn up everything. Well I'll turn into a black little hole and you'll turn into string.
Good luck pushing Wal*Mart. They've never bowed to a supplier. If they want to sell digital music at 25-cents a track, the music industry can just take it in the rear.
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.
Before the flamewars regarding dupes fly to far, let me just say that I usually find the articles mentioned in the different dupes have different details that usually allow for a better conversation. Not only do they stimulate conversation, but often better points are brought after contributors have had some time to think.
...That is, if you can filter out the many messages of karma whores and whiners hoping to get mod points for crying 'dupe.'
Oh, wait, there's legitmate places to download music online from?!!!
Primitive peoples often think that you're stealing their soul when you photograph them.
I make no guarentee of this post's relevancy to anything.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Shoot, as long as slashdot is the de facto source for redundancy, how about we make a poll for the subject:
Slashdot poll: Which article is better?
1)iTunes downloads prices increasing article referenced here (yesterday)
2)iTunes downloads prices increasing article referenced here (today's)
3)the iTunes article dupe we'll see tomorrow.
4) the iTunes article for when the prices actually change
5) dupe slashdot article for #4
6) dupe slashdot article for #4 AND #5.
Come on guys. I know you can get on the same page.
-- (Score:i , Imaginary)
The music industry loses all credibility the moment it says "Apple may become too powerful."
Oh, so now Apple is trying to take over the world?
What next? The Salvation Army?
And the people who really want to karma whore can cut-n-paste the highest-rated articles from yesterday (or the lowest-rated if you're into trolling).
Maybe someone should just write a script that automatically posts ...
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.
"Murphy was an optimist" - O'Toole's commentary on Murphy's Law
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.
Pretty soon they will give us what we have all been waiting for... A /. article whose primary source is another /. article.
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.
--- witty signature
Let me recommend Slashdot
sulli
RTFJ.
I kind of like Walmart's discussions with the media industry a little better:
-- I was raised on the command line, bitch
a) Started out "free" -- reasoning the bank didn't have to pay so many human tellers.
b) Moved to a small fee for the operator of the ATM, which is understandable.
C) Fee doubled when your bank realized it could charge you in addition to the charges of the ATM operator.
D) Mext the fees nearly doubled to an average of $1.50 each side of the transaction (minus the "free" out of network uses you get per month).
E) Finally -- we end up with bank plans where you can be charged to talk to a human teller.
If we figure out where we went wrong with banks and ATMs it might help us not repeat the same mistake.
I don't come here for variety, I come here for redundancy.
I would point you to Slashdot Editor Training, where all Editors learn how to avoid dupes, perform thorough spell- and fact-checking, and (best of all) write well-crafted, bug-free code.
Yeah, right.
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.
I don't come here for variety, I come here for redundancy.
Don't blame Durga. I voted for Centauri.
I've just discovered that there's a site which looks just like slashdot at http://nodupes.slashdot.org. Given the name, maybe they don't have dupes.
The Tao of math: The numbers you can count are not the real numbers.
Think of the dupe as a remake of the original "classic" post.
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.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
Wal-Mart Squeezing Record Labels to Cut CD Prices
Posted by michael on Thursday October 14, @08:25AM
from the win-win-situation dept.
Raindance writes "RollingStone.com has a revealing article detailing how retail giant Wal-Mart is making loud noises about throwing its weight around in order to get significantly better bulk prices on CDs. Says one industry executive, 'This wasn't framed as a gentle negotiation, it's a line in the sand -- you don't do this, then the threat is [your product is dropped].' This is the first time a big player has attempted this sort of hardball move on the labels, and the labels may be forced to deal, as Wal-Mart sells 1 out of every 5 retail CDs. Monopoly one, meet monopoly two."
Telling quote from the linked Rolling Stone article:
Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry's major priorities. That's because if Wal-Mart cut back on music, industry sales would suffer severely -- though Wal-Mart's shareholders would barely bat an eye. While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart's total sales. "If they got out of selling music, it would mean nothing to them," says another label executive. "This keeps me awake at night."
So, it seems as though Wal-Mart is playing chicken with the music labels, betting the labels will blink first. I would suppose if they can do this with physical media, they can do it with downloads as well.
Many in the music business also expressed concern over Apple's growing clout. This stems from the fact that Apple's music store and player are not compatible with any others. One fear is that Apple will become too powerful if consumers continue to choose its digital music platform. Apple declined to comment.
"One fear"? I'd say it's the main fear. The sticking point is not Apple's proprietary technology itself as much as how market share allows Apple to assert downward pressure on per-song pricing. The music biz wants to kneecap Apple. The goal is to force Apple to open the iPod/iTMS, distribute the platform's market share among any number of companies, and so get digital distribution fully under the music industry's thumb. Cartels like chattel, not coequals.
The big question is: if Jobs refuses, will the labels start to defect from iTMS? Apple will have planned for this scenario and their response is going to be very interesting--it will tell us pointedly where the power truly lies.