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iTunes Might Lose Labels

Posted by CowboyNeal on from the different-strokes dept.

Dreamwalkerofyore writes "According to the New York Times, the iTunes music store might have to change its 99 cents per song policy or risk losing a huge amount of songs due to recent disputes with record companies, who demand an increase in the cost. From the article: 'If [Mr. Jobs] loses, the one-price model that iTunes has adopted 99 cents to download any song could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for $1.49, while a golden oldie could go for substantially less than 99 cents.'"

56 of 614 comments (clear)

  1. great! by j.blechert · · Score: 5, Insightful

    good idea!
    might change that 'it's new - it must be good' thingy people have in their heads..

    1. Re:great! by aussie_a · · Score: 5, Insightful

      Actually it may just re-inforce the "Oh it's more expensive so it must be better" meme people have in their heads.

    2. Re:great! by Feyr · · Score: 4, Insightful

      or like me, it'll reinforce the "it's too expensive, fuck it" idea.

      better stick with web radios

    3. Re:Great! by deltagreen · · Score: 5, Insightful

      $1.49 might be too much for the top end, but a price substantially lower than 99 cents could indeed be a step in the right direction. Since plenty of the merchandise sold online is already in 'the long tail', an increase of sales in that segment, might show more clearly to the record companies two things: 1) Hits don't necessarily have the same pulling power in online stores as in the local store with a limited selection of 300 albums 2) Maybe selling three copies of a song at 75 cents is better than one at $1.49?

    4. Re:Great! by Anonymous Coward · · Score: 5, Insightful

      How sweet. Such innocent naivety in the shark pool of economics. What they meant to say is that some songs could be cheaper than others, not necessarily cheaper than $0.99.

      It's quite simple when you think about it: They are not demanding higher prices to discourage buyers from getting the popular tunes and steer them to obscure songs. They're asking for more because they want a net gain. Guess who's going to pay for that. The low end will have to pay for the reduced number of sales of high priced songs, so the price range for anything above garage band level is going to go from $0.99 to $1.49. The few songs which will sell for less you could probably get for free from a crappy website where a rightfully starving artist put them in a hopeless promotion attempt.

    5. Re:great! by bobcote · · Score: 3, Interesting

      Slightly off topic, but iTunes already gets around the 99 cents for some songs.

      Some of my favorite oldies are not available as singles but rather only the album -- usually $9.99. I have bought a couple of albums because it was still cheaper than buying a CD. As an example, American Pie by Don McLean. A great album of the early 70's (yeah, I'm old)

      There are some other oldies I'd like to have but I won't pay for the album because the rest of the songs were garbage.

    6. Re:great! by mmarlett · · Score: 4, Insightful

      Actually, a fluctuating price (according to economists, of which I am not one) is an issue of supply and demand. The issue this raises is one sided: there is more demand so it should cost more, record companies say. Well, yes, the supply has stayed constant, but it's virtually infinite. Their production costs for digital media are the same if they sell one or one hundred million. Except for the bandwidth, which is Apple's concern anyway, right?

      So while it's easy to see the record companies' points, they fall down under any scrutiny. It comes down to "what price will the market bear?"

      And if they want more for the more popular songs, they will quickly find those songs less popular.

      Which will be fine for the record companies, because they'd rather you buy out of their catalog so that they can tell new artists, "Sorry, kid, you don't sell," and screw them out of royalties, fame and etc. They may then go on to blame P2P for the failure of new artists.

      You'll find Muddy Waters really cheap, though, because the record companies always owned all of his rights.

    7. Re:Great! by Ahnteis · · Score: 4, Insightful

      Exactly. There's no way they're going to charge LESS then $0.99.

      This is about prices going UP.
      And considering they already nearly match the price of an actual CD (without cover, case, physical medium, and at a lower quality with DRM to boot)) it's an incredibly bad deal for the consumer. But hey, it's convenient right?

    8. Re:great! by stilwebm · · Score: 4, Insightful

      Recall though that in this rational actor paradigm, the record companies have ignored an important force: piracy. While the record companies have a point saying that increased demand should allow for price increases, the market has already made it clear that many consumers are not willing to follow their pricing model. This is why iTunes Music Store has been so successful. The low price and convenient media fill in for the labels' missed opportunity and for many users, the hidden costs of piracy. If labels start controlling price again, they may flush this success down the toilet for Apple and themselves.

    9. Re:great! by trezor · · Score: 4, Interesting

      I have bought a couple of albums because it was still cheaper than buying a CD. As an example, American Pie by Don McLean. A great album of the early 70's (yeah, I'm old)

      Great! Really. Except that it should be in the public domain by now. Like most of the music I listen to these days. So you bought stuff. Great! Now watch me not pay for stuff that should be free decades ago.

      It seems the **AAs are succesfully wiping the notion of a public domain from people minds.

      --
      Not Buzzword 2.0 compliant. Please speak english.
    10. Re:great! by trezor · · Score: 4, Interesting

      As you may or may not have noticed, I never said artists shouldn't get paid. However the point off copyright isn't that artists should be able to live indefinitely of whatever they create.

      Copyright is a legal construct, an artificial monopoly which provides artists a incentive to create, which in turn was meant to benefit society by making society richer (ie the public domain).

      Are you going to tell me that Beatles, Miles Davis or whoever weren't going to make that music anyway, if they knew that they would "only" be able to profit from it, say, 35 years? You got to be kidding. If I could strike any deal like that for anything I did, I'd sign up before you could say "showtime".

      Had todays copyright regime existed in the time of Beethoven, Bach or Wagner we would have never heard about them at all, as they'd be copyrighted into oblivion. Now we can all enjoy them instead, as they belong to the public. As it should be.

      Can you please tell me exactly what copyrighted material has entered the public domain since the creation of Mickey Mouse? Which incidently was based on Steamboat Willie, which incidently also was copyrighted, but happened to have entered the public domain.

      Had it not been for the public domain, Disney would never have existed today, nor would your dear Mickey Mouse. Copyright is granted with the intent that the copyrighted material should in the end belong to society. It's simple. There's supposed to be a balance. Now there is not.

      With the de-facto end of the public domain, watch me no longer respecting the artifical construct that copyright is.

      --
      Not Buzzword 2.0 compliant. Please speak english.
    11. Re:great! by BackInIraq · · Score: 4, Insightful

      While the record companies have a point saying that increased demand should allow for price increases, the market has already made it clear that many consumers are not willing to follow their pricing model.

      Perhaps increased demand should lead to higher prices...but then, if we're pricing music based on supply and demand, then the nearly infinite "supply" of digital music should make it damn near free.

      I guess could agree that music should be priced at what the public is willing to pay, based on demand. But continued piracy of music online shows that even at 99 cents a song, much of the public feels that price is too high. One would argue that it's hard to compete with somebody giving away your product for free, but at the same time I really do feel there is a price point at which a vast majority of people would choose the legitimate market over the black market. I just don't think the record labels have dipped that low yet, and I know they don't want to.

      Really, the quality of the product being given away for free is also much lower than what is being sold. I'm more than willing to give up good money to have a physical disc, at full audio quality, that I can re-rip should I lose my files. I like liner notes. Hell, I even think buying a full album on iTunes has some value...such as knowing that the entire CD will have been ripped at the same quality, with accurate and consistant tags without my having to take the time to do/fix it myself.

      But is the physical CD worth $14.99 to me? Is the "virtual" CD worth $11.99 or $12.99 (the price the labels seem to be pushing for full albums on iTunes, compared to the original $9.99)? No.

      For sake of argument, my personal price point would be more like $9.99 for physical CD's (and I'm not talking old/surplus stuff) and $6.99 or $7.99 for whole album downloads. $0.99 a song actually doesn't bother me, as for many CD's it would be saving me about ten bucks, as there is often only one song I want. Do the labels want to try these price points? Hell no. They'd argue that they cannot possibly make money at those levels.

      At which point I would pull out a tape of MTV Cribs, which to me is absolute proof there is some room to lower prices. And that's just what artists pull in...I also know that there aren't many record execs driving Civics.

    12. Re:great! by mmarlett · · Score: 3, Insightful

      You're oversimplifying my simple economics. If you look back, I say that it comes down to "what price will the market bear" because the supply is not an issue.

      I was talking about how they justify the different pricing. And simply pointed out that supply and demand isn't their reason.

      They also are not suggesting some sort of popularity model -- songs that sell X number of times per day cost $1.50, Y sales are $1, Z sales are $0.50 -- I could see that. That would be entirely popularity-based pricing, perhaps something like the stock exchange (roughly; don't think about it too much). That pricing might not be a bad idea, actually.

      But it would freak out the record companies, because they don't want popular things to be more expensive. They want the things that they market heavily to be more expensive. That's the model that they are familiar with and one that they know works.

      Apple, however, has completely changed everything about their economic model. Nothing makes sense to the recording industry anymore. There aren't any DJs to buy off with payolla, there aren't any record store chains to give under-the-table kickbacks to -- everything is above the board, and they don't even control the distribution channels.

      The record companies want to guarantee hits. They want to control prices so that you are either buying (a) something that they've put a lot of money into at a high price or (b) something that has been sold at a high price for years and is nothing but pure profit. Hits or classics. Expensive or cheap.

      But they don't want you buying independent music -- certainly not independent music that costs exactly the same as the stuff they've pumped millions into to convince you to buy.

      Which begs to question why they are pumping all this money into promoting these artists if they can't guarantee a certain amount of profit.

      But they're finding that when they put their heavily marketed tracks up on iTunes then they lose control. You've got classic music records from 1996 by Telrac Records right between "The Who Sings My Generation" and U2's "How To Dismantle An Atomic Bomb"; D.L. Menard's "Cajun Saturday Night" on Rounder Records in with Justin Timberlake and Travis. If Apple is selling that placement (and it wouldn't be too hard to convince me with the Timberlake appearance), it's certainly diluted.

      There are five major labels -- Universal, EMI, BMG, Warner and Sony -- who own nearly everything.

      The current new releases are Trick Pony (Curb->MCI->Universal); Craig David (Warner->Atlantic); The Flaming Lips (Warner Bros.); and Crazy Hits by Crazy Frog on Mach 1 Records Gmbh, which is owned by Ministry of Sound, which is definitely not one of the big five.

      It's also at the bottom of today's top 10 album list. Coincidence? No.

      Apple doesn't care because Apple just sells whatever people want for $1. But the record companies must be livid. Yes, they have 1-9, but they're used to having 1-100. And you can be damn sure they want more money for their efforts. (Though in the end, it will just do more for Crazy Frog.)

      The real economics at work here is "Seller sets the price, buyer decides if it's too much." And we have two sellers who 1) disagree about how buyers will react and 2) have completely different motivations toward selling.

      Apple thinks buyers will baulk on all sales if some are weirdly more expensive and want to keep everyone using iTunes to sell the most music to the most people. The record companies want more money for their product and don't care if they sell it through stores or iTunes or beam it directly into your head as you sleep (which they may already be doing) as long as they get the most money out of it.

      So there you are.

      Notice also that these models also never once involve the artists directly, even though one would hope that they did all the real work.

    13. Re:great! by Thangodin · · Score: 3, Insightful

      Someone invented Mickey Mouse; people are still willing to pay for him; why should parasites who put no effort into the character get a free ride?

      Oh, you mean like the Disney lawyers? Or Disney itself, which based most of its movies on public domain material?

      You take some, and you put some back in. That's the way it works. The parasites are the people who don't want to pay back their debts...ever!

  2. Great! by lukewarmfusion · · Score: 3, Insightful

    Then I might actually consider buying music, given that I rarely buy "new" or "popular" music.

  3. Yeah well by teslatug · · Score: 5, Insightful

    It was working so well, it was about time they fucked it up.

    1. Re:Yeah well by Ronald+Dumsfeld · · Score: 4, Interesting
      It was working so well, it was about time they fucked it up.
      It's all about control. What the article goes into more depth about is that RIAA stooges don't like iPods making money for Apple. They want the player market broken up and moved away from iPod dominance. That really doesn't suit them.

      Of course, they'll be absolutely convinced the price is too low. How many morons downloaded the Crazy Frog ringtone at a significantly higher price than 99 cents? They want to go back to gouging the customers and giving kickbacks to corrupt legislators to take your house off you for petty copyright infringement.

      Honestly, someone give me a google map for the RIAA headquarters. I've got my Illudium Q36 explosive space modulator somewhere around here and a strong urge to use it.
      --
      Where's the Kaboom?
      There's supposed to be an Earth-shattering Kaboom.
    2. Re:Yeah well by Dmala · · Score: 4, Insightful

      What Apple really needs to do is tell these record labels to go screw. Let them pull their catalogs off of ITMS. Do you think the legions of iTunes users are all going to stampede out and start buying CDs again?

      If they're really lucky, these record labels won't see a further drop in their CD sales. Plus they won't have the revenue stream from Apple anymore. They'll come crawling back in no time.

  4. Wow by EvilMonkeySlayer · · Score: 3, Insightful

    Great way for the labels and Apple to discourage people from using legal methods for downloading music.

    1. Re:Wow by aussie_a · · Score: 5, Informative

      Great way for the labels and Apple to discourage people from using legal methods for downloading music.

      How is Apple to blame? According to the article summary (can't see actual article) Apple is fighting to protect it's current model, and may be forced to (or to lose a large chunk of it's inventory). I'd hardly say Apple is to blame for that.

    2. Re:Wow by Lumpy · · Score: 5, Interesting

      because apple could have told them to go to fucking hell. and held their ground or even smearing the record labels in advertising.

      "$0.99 a song is no longer possible due to the rampant greed from BMG,SONY and other record labels."

      it works we do it all the time in the cable industry. Discovery tried to increase their rates to us and force us to carry some more of their crap channels.. we said no, they pulled our encryption key so we replaced discovery with a screen that said "discovery wants to raise your cable rates, we said no and rthey pulled the plug, call 888-888-8888 and tell them what you think."

      we were down 5 days on that channel before they agreed to make the calls stop.

      the record companies are making HUGE profits at the $0.99 pricing. they just wnat in on this price gouging that the oil companies are enjoying right now.

      --
      Do not look at laser with remaining good eye.
    3. Re:Wow by geofferensis · · Score: 5, Insightful

      I still don't see how this is Apple's fault.

      The cable company story doesn't really seem comparable. Cable companies have a lot of leverage on content and it is a hassle for people to switch cable companies. However, it is very easy for people to buy music from a different store than iTMS.

      Apple does not have monopsony power.

    4. Re:Wow by Altima(BoB) · · Score: 5, Insightful

      ...they just wnat in on this price gouging that the oil companies are enjoying right now.

      I can just see the RIAA, overcome with jealousy over OPEC, arranging a Music shortage. Prices going to $60 an album, people waiting in giant lines at record stores just to pick up a new Black Eyed Peas album. People avoiding playing music while driving to work because it's a precious commodity, while the record industry rakes in profit. Network news would alternately go nuts about how apocalyptic it is, then reassure people that it actually isn't the highest price peralbum ever when adjusted for inflation, informing us that people used to pay more for wax cylinders that could barely hold a song. Then the record industry would graciously recieve generous subsidies from the US government as part of a giant omnibus Music bill. Politicians will promise to help reduce America's dependance on foreign music, and to help keep the chart hits American.

      Then we'll invade France to take control of Khaled and his snappy North African pop beats.

      --
      Yup...
  5. Geeeze by QaBOjk · · Score: 4, Insightful

    Apple goes out of its way and makes a system so that the record industry CAN profit from online media, and then they whine their not making enough! shoulda stuck with P2P, not like they're ever happy.

  6. $0.99? Yeah, right. by Nimey · · Score: 5, Insightful

    I expect that if this goes through there will be few if any songs that go down in price.

    --
    Hail Eris, full of mischief...

    E pluribus sanguinem
  7. Greed, greed, greed... by Cirrocco · · Score: 5, Insightful

    The 99 cents per song you already pay is a bit much, especially considering there is NO physical packaging, shipping costs, storefronts with employees and power bills, ad infinitum.

    I really LIKE iTunes, and I *KNOW* how to steal music if I want to. I really LIKE the fact that I can buy a specific song for a pittance on a whim instead of hoping someone will upload it to the Usenet.

    It's not that $1.49 is too much, but it just shows that they will try to reach a price that people will accept, however grudgingly. But the $1 mark is a psychological barrier; once they reach that, people will start to think, "Is this song worth $1.49?" and might not buy it after all.

    In any case, good luck to 'em. I don't buy any new stuff anyway. Most of it is crap pushed by the payola artists.

    --
    Useless opinions, worthless observations, and more!
    1. Re:Greed, greed, greed... by arose · · Score: 4, Funny

      No power bills? Are the servers powered by the RDF?

      --
      Analogies don't equal equalities, they are merely somewhat analogous.
  8. Greedy bastards by tinrobot · · Score: 5, Insightful

    Like it costs so much to record a song in this day of digital recording. 99 cents is plenty.

    The record labels pretty much killed CDs by charging 20 bucks each for them, now they'll kill this outlet as well.

  9. iTunes monopoly by Anonymous Coward · · Score: 3, Interesting

    The only way to sell a song online if you are a musician and want to have DRM is on iTunes.

    You can't sell it any other way, it's true that there are freely usable DRM formats that are supported by every portable player other than iPod. Unfortunately, iPod has 90%+ of the market share, and for DRM it only supports Fairplay.

    Sorry that people don't realize it, but independent musicians are screwed because they cant sell protected songs for the price they want.

    But whatever, people will never ever see anything wrong in anything Apple does.

    Even Microsoft's DRM format is more open than Apple's!

    1. Re:iTunes monopoly by Lally+Singh · · Score: 3, Insightful

      MS's DRM is more open only because apple has 90%+ of the market share.

      --
      Care about electronic freedom? Consider donating to the EFF!
    2. Re:iTunes monopoly by dema · · Score: 3, Interesting

      As someone who works in the independent music industry, and works on digital distibution of over 50 indie labels. I'd like to say, you're completly incorrect. We currently distro 90% of the catalogs of about half our labels, and are working to get contracts from the rest. We manage their digital music and sell it through the following services:

      iTunes
      Music Match
      MusicNet
      Music Now
      Audio Lunchbox
      DownloadPunk
      Downrip
      Sony Connect

      So, if you think iTunes is the only choice for independent labels, it's your own fault for not seeking alternatives. And no, iTunes is not the biggest seller for all of our labels.

  10. this news reads: by w3weasel · · Score: 5, Funny

    This news reads (translated from the original RIAA BS) "Allofmp3.com will be adding new servers and registering new bank accounts to deal with the massively increased demand".

    --

    Just as irrigation is the lifeblood of the Southwest, lifeblood is the soup of cannibals. -- Jack Handy

  11. Re:"Its," damn it! by big_groo · · Score: 5, Funny
    Change its policy! You wouldn't type "... might have to change it is 99 cents per song policy."

    Your fighting a loosing battle. Its impossible to win when most of Slashdot doesnt' even have a basic grasp of english to good. Chose you're battles wisely...

  12. Ignores the long tail... by mjh · · Score: 5, Interesting
    This pricing scheme is not likely to work out well for the music industry. It ignores the long tail. From the wired article:
    An analysis of the sales data and trends from these services and others like them shows that the emerging digital entertainment economy is going to be radically different from today's mass market. If the 20th century entertainment industry was about hits, the 21st will be equally about misses.
    If you're the music industry, and you give a discount to the misses, you're going to end up making less money. The number of sales of millions misses outranks the number of sales of the top 20 hits.

    Of course, this could be their goal: to make iTunes less profitable and drive them out of business, then swoop in and offer a different service... Or maybe they want to make iTunes less profitible in order to drive music consumers back to purcashing CDs... ??? </conspiracy_theory>

    --
    Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
    1. Re:Ignores the long tail... by pla · · Score: 3, Insightful

      If you're the music industry, and you give a discount to the misses, you're going to end up making less money.

      Nah... You just need to realize that the "could go for substantially less" part of the deal means maybe all the way down to $0.95. They threw that in there to make the idea more palatable, but in practice, it won't happen that way.

      Also, consider that even a slight reduction could end up boosting sales of such material, in the same way that otherwise slow-selling unknowns fly out of the cutout/discount bin at any local music store... We might agonize over whether or not to buy a decent new release at $18.99, but we'll throw away a $50 without blinking on $5-$10 discs we've never heard of.

  13. AllOfMp3 by Rew190 · · Score: 5, Insightful

    Let them do it. Sites like AllOfMp3.com will just get more business (which appears to be totally legal). Why would anyone buy a crappy compressed song for $1.50? At that price it costs as much (or more!) as a regular CD with artwork and no compression!

    I'm still waiting for the day when the general population knows about sites like AllOfMp3, where you can download an entire album in just about every popular format for around a dollar. You can even preview an entire album before purchasing, and the selection is pretty decent. Not as good as iTunes, but probably enough to satisfy a good chuck of iTMS users.

    And given all this, the record companies want to make themselves look worse? Hilarious! Let them!

  14. Same old story by Y-Crate · · Score: 4, Interesting

    If this new policy is adopted, expect to see sales drop or at least level-off while piracy increases. Up until this point it has been a fair deal for FairPlay, and if these record companies demand more money for doing absolutely nothing but allowing Apple to sell the products and do all of the heavy lifting for them (and barely break even on it as Apple does with the iTunes store) they really are out of touch with reality.

    They have found the sweet spot in the market and simply collect the checks. But the corprate mantra of constantly growing profits has taken over. Which is not a bad thing, but it should have manifested itself in the recruitment of new musicians, not the raising of prices for the hell of it. That of course, would take effort, and when you make more money off of an album than the artist does - after you have merely loaned them the money to make their next album - you get used to screwing people over as much as you can.

    If banks worked like the music industry, you would pay 90% of your paycheck to whatever bank gave you a student loan 20 years ago - 15 years after they were paid off.

  15. Idiots by Darth+Maul · · Score: 4, Funny

    Music executive: "Hey, we're making a ton of cash money without any distribution or production costs. In fact, we don't really do anything at all, and get rich. I know, LET'S SCREW THAT UP."

    --
    --- witty signature
  16. Include more indies by yintercept · · Score: 5, Insightful

    A variable pricing model would be fine with me. If iTunes were to include more indies and let each artist set their price, they we would end up with a dynamic model.

    It seems to me that the primary problem with the music industry is the history of price fixing.

    1. Re:Include more indies by jaiyen · · Score: 5, Interesting

      It seems to me that the primary problem with the music industry is the history of price fixing.

      That, and the trend for albums to contain 2-3 good songs (at most) and a load of filler crap. Why would anyone want to buy an album like that?

      I heard an interview with Jay Kay of Jamiroquai talking about the way the trend towards downloading means fans are buying individual tracks at a time rather than whole albums, which is forcing them and other artists to spend more time on the "other" tracks on their albums to make sure they're up to scratch. If this is the case (more people downloading = higher quality music), then great! And if we can get it for less than $0.99 even better!

      Let's hope it's really true and not just words...

  17. Re:$99 wont last forever by Anonymous Coward · · Score: 3, Funny

    $99 is a bit steep don't you think?

  18. To be fair to us Americans by benhocking · · Score: 3, Interesting

    I think most capitalist economies are dominated with companies that subscribe to this business model. Of course, with the global marketplace it's not very easy to say where our economy stops and another country's economy starts.

    --
    Ben Hocking
    Need a professional organizer?
    1. Re:To be fair to us Americans by aukset · · Score: 4, Insightful

      I wouldn't call this 'capitalist' at all. This article is telling me that somehow, completely independently of one another, every major record label suddenly decided to make apple change their pricing model to the exact same thing at the exact same time? I don't think so. These labels are not in competition at all.

      I don't think this has much of anything to do with actual profit by the labels. They're making plenty right now, and growing plenty simply by virtue of increased volume. This is a power play. This is the industry telling Apple, "We own you, we don't need you. You do what WE say."

      Basically, since they can't compete with Apple in digital distribution individually, they are colluding to strong-arm Apple and will likely run iTMS into the ground eventually. I think laws are being broken here, but I don't expect anything to be done about it.

      --
      No sig now
  19. Re:It was only a matter of time by the_unknown_soldier · · Score: 5, Informative

    Cd baby Works very hard at getting independant music on the ITMS. Cdbaby works as an middle party between the artists who don't really know what to do and Apple who don't have the will to deal with a million artists on individually. Cdbaby then gives the artist a ridiculously large percentage, iirc they can end up with 60c from a 99c song sale.

  20. Dang it by Phantasmo · · Score: 5, Funny

    Dear Slashdot,

    Please help us think of ways to blame this on piracy. We're really stuck on this one!

    Sincerely,

    The RIAA

    --

    The US Army: promoting democracy through unquestioned obedience
  21. Gas prices by Xtravar · · Score: 5, Funny

    With the rising price of gasoline, music companies must charge more for their products in order to make up for increased shipping costs.

    Oh, wait. Nevermind. Yeah, they're just jerks.

    --
    Buckle your ROFL belt, we're in for some LOLs.
  22. Apple is the WalMart of Music Downloads by Luscious868 · · Score: 4, Insightful

    The more I think about this, the more I think it's pure and total BS. Apple has become the WalMart of music downloads. Apple accounts for more than half of digital music downloads. The record companies can huff and puff all they want, iTunes and the iTMS have become the WalMart of digital music. If they don't carry it, it doesn't sell. The record companies would be shooting themselves in the foot.

    1. Re:Apple is the WalMart of Music Downloads by 68kmac · · Score: 5, Funny
      The record companies would be shooting themselves in the foot.
      The (major) record companies have been shooting themselves in the foot for years now and still haven't made the connection that pointing down the gun and pulling the trigger is directly responsible for that stabbing pain ...
  23. remember that they can track sales. by mstone · · Score: 5, Interesting

    This is internet business we're talking about, folks. Retailers can track sales minute-by-minute, adjust prices moment to moment, and tailor prices to individual customers.

    Replace the 'hot new hits' smokescreen with 'anything that's actually popular' and you have what the music industry actually wants. Does 'Highway to Hell' get more action than the latest push-the-star album? No problem.. that song gets a price hike.

    It leads to a state of smoke and mirrors, where all the songs that sell less than one copy a month are $.50, anything that actually has an audience is $.99, and anything getting more traffic than normal, for any reason, gets kicked up to $1.99. Even more heinous, but technically feasible, would be per-user and related-hits tracking, so if you buy a $.50 song, all the 'other songs purchased by people who bought this one' go up to $.99 for you personally. In such a system, the only way to get the low prices consistently would be to buy random selections of stuff nobody else wants.

    It's a great dodge, from a marketing standpoint. The labels can come out and say that 99% of the music in the iTMS catalog is listed below $.99, while quietly failing to mention that 90% of the actual purchases were at $.99 or more. Then they can wring their hands and claim that those "few" premium-priced songs are the only place they make a profit, and that anyone who wants to take away that price tier is just a nasty mean corpse-raping villain.

    Personally, I'm amused that the labels are willing to play chicken with a company that recently announced a major change in its hardware platform. Apple (or Steve Jobs) certainly has the nerve to tell one of the big labels to take a hike if necessary, and it's not like the market is just flooded with other venues where the labels can peddle their goods.

    The game theory of the situation is interesting.. if all the labels bailed at once, it would hurt Apple a lot. But if only a few labels leave, the ones that stay will probably do better business, since they'll have less competition. The more labels that go, the better the advantages for the few that stay. So basically, all the labels are in a position where they want someone *else* to sacrifice profits and teach Apple a lesson, while they personally stick around and glean the benefits of both the smackdown and reduced competition. But nobody wants to be the hero who dies for the good of everyone else.

    All told, I hope.. and expect.. that Apple will stick to its guns on simple, flat pricing.

  24. A Cent Sign by webteeth · · Score: 5, Informative

    Most comments I see posted responding to this article use "99 cents" or $0.99. To make a cent sign in Windows, hold Alt while pressing 0162.

    On a Mac, press Alt + 4.

    1. Re:A Cent Sign by hattig · · Score: 5, Insightful

      I think your post sums up Windows vs. Mac OS X totally. :)

  25. Re:It was only a matter of time by mattsucks · · Score: 4, Interesting

    65 cents, actually. Apple pays CDBaby 0.70 per song, CDBaby take a 5-cent cut. Pretty cool deal for us indie bands that don't have enough of a presence (yet!) to get Apple's attention by ourselves.

    (yes, i am totally shameless: http://www.meetgoodwin.com/

  26. WalMart is at 88 cents per song. by Animats · · Score: 4, Informative
    WalMart is at 88 cents per song. Let's see how far the music industry gets by leaning on WalMart.

    "The labels price things based on what they believe they can get -- a pricing philosophy a lot of industries have. But we like to price things as cheaply as we possibly can, rather than charge as much as we can get. It's a big difference in philosophy, and we try to help other people see that." - WalMart senior VP (entertainment) Gary Severson.

    WalMart pushed the labels into a $9.97 retail price for CDs. Then they started signing deals with artists on their own. WalMart now has exclusive rights to Garth Brooks.

    It's hard to cheer for either side here. But from the music industry's perspective, WalMart is scarier than Apple. Apple needs the music industry. For WalMart, audio CDs are a minor business. WalMart sometimes threatens to cut back on audio CDs and devote more shelf space to DVDs and games. And Apple doesn't care about content. WalMart imposes censorship on both music and cover art.

  27. Re:Variable price != lower price by yintercept · · Score: 4, Insightful

    This article is about record companies wanting to raise the current fixed prices.

    If varible prices led to an open market with artists competing on price, then variable prices would like lead to a drop in price.

    There are several big ifs in the equation.

    Our first big if is the assumption that the prices would have a decent minimum that is near the price of delivering the music. The second big if is the assumption that rights to music is held in enough hands that there will actually be pricing pressure. Right now, the big music collections are owned by a few mega corporations.

    You are complete right. If Apple has a pricing structure that sets $.99 as a minimum, then we would see a big jump in price.

  28. Priceless ! by Nom+du+Keyboard · · Score: 4, Funny

    New iTunes songs: $1.49
    Kazaa: Free
    Sticking it to the screw-the-buyer record companies once again: PRICELESS!

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
  29. Turn you over to shake out that last penny by Nom+du+Keyboard · · Score: 3, Informative
    A sore point for some music executives is the fact that Apple generates much more money selling iPod players than it does as a digital music retailer, leading to complaints that Mr. Jobs is profiting more from tracks downloaded to fill the 21 million iPods sold so far than are the labels that produced the recordings.

    At the price of 99 cents a song, the share of the major labels is about 70 cents

    Apple needs to get their profits from the iPod, since most of the 99 cents is already going back to the record companies. What's so hard about this for the NYT to understand?

    The other main battleground in Apple's coming confrontation with the industry has to do with "interoperability" of services and devices. Mr. Jobs has so far refused to make the iTunes software compatible with music players from other manufacturers, and he has prevented the iPod from accepting music sold from competing services that use a Microsoft-designed music format. As a result, songs purchased from Napster, for example, will not play on an iPod.

    Ah, now we know the real reason why Sony is unhappy. Won't play on Sony players either.

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."