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Music Exec Fires Back At Apple CEO
geniusj writes "Warner Music Group CEO, Edgar Bronfman Jr., has fired back at Steve Jobs in response to the Apple CEO's claim that having variable pricing for iTunes music would be 'greedy.' From the article: 'To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer ... Some songs should be $0.99 and some songs should be more. I don't want to give anyone the impression that $0.99 is a thing of the past ... We are selling our songs through iPod, but we don't have a share of iPod's revenue ... We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.' Perhaps iPods combined with iPods are selling music as well, and it's not just a one-way street?"
fuck the golden eggs. we demand platinum!
Some songs should be $0.99 and some songs should be more. I don't want to give anyone the impression that $0.99 is a thing of the past ... We are selling our songs through iPod, but we don't have a share of iPod's revenue
:\
So yeah. It will never be cheaper than 99 cents. We don't want to give people that 99 cents is a thing of the past, but we want a piece of the pie, and 99 cents isn't doing it.
Real bright there guy. You suck.
Tell you what. Let's go variable then. Songs older than 5 yrs are 50 cents. More recent non-top 100 tunes are 99 cents, and top 100 are $1.50.
Of course that will never happen.
Karma: Chameleon (mostly due to the fact that you come and go).
Let the market decide? Oh give me a freaking break. There is no market, not in the free market economics sense of the word anyway. I can buy petrol, gas, cars, PCs, coal, condoms or even a blowjob from any number of suppliers. This competition drives down prices and forces companies to compete on quality and price. Copyright guarentees as monopoly on your product. If I want to buy the latest white-stripes album I can only buy it from one label: V2 Records. Sure I can go to different stores to try and hunt down a lower prices but V2 set the price. The consumer only has one choice: buy it, or don't buy it. In a real free market economy the consumer has a third, more powerful option, to find a cheaper supplier.
This is terrible for the consumer and almost always leads to disproportionate prices. Rather than supply and demand setting the price of the music, V2 can simply mandate it and then it will be so. The market becomes distorted and everybody loses except the labels. There's this idea that the artist somehow needs to be compensated for his work and that's fine but why not do it off ticket sales for concerts? I don't see why we need these artists need these government granted monopolies to make money!
Simon
Since when does the supplier legally tell you what you can sell a product for?
Generally, that is considered illegal.
But hey, who am I to talk, I haven't been convicted of price fixing, so how should I know?
Oh wait, they have.
Some songs should be $0.99 and some songs should be more.
How about some songs should be $0.99 and some should be less?
Feel the fear and do it anyway.
I have posted this on slashdot before but I think it warrants posting again for this article.
We all have seen the many publisher provided services for purchasing E-books, E-Music, and Software Downloads.
These services try to limit your options and choices or even to remove them from you totally. With many of these services you must agree that you do not even own that which you wish to purchase in order to buy it. Instead they license you right to use their private property.
We see the prices on the virtual which rival that of the physical. We instinctively know that the production cost of a E-book, Downloaded software, or MP3s is so much less than the cost of a compact disc or a printed book both of which require paper, ink, artwork, packaging and so much more that is totally lacking from the ethereal versions.
Their sales decline. "Stop the thieves" they cry out into the night! Make more and harsher laws to protect that which is already protected they demand of our governments. Protect our property and damn their rights is their idea of an ideal. I am a honest person is my vehement reply. So why attempt punish me for the crimes of others.
They attempt to smother new technology on the premise that it may possibly be used for illegal activity.
While it is not my intention to justify the misappropriation of their material I must point out it's their own fault really. I blame their lack of foresight and their lack of anything resembling common sense. They do not exploit the markets available for them or if they do it's a halfhearted attempt. In the real world people are not buying what you sale one common step generally taken is to consider lowering your prices until your sales pick up. This also applies on the Internet.
In a concise conclusion I state that I personally prefer to compensate the authors and composers of the material that I so enjoy in my daily life. Currently I do so off-line. So Publishing and recording industries I say make it worth my while and convenient to do so and I will be one of the first in line online.
"GET / HTTP/1.0" 200 51230 "-" "Mozilla/4.0 (compatible; Setec Astronomy)"
The exec is exactly right. Used CD stores are proof that the market demands a lower-cost place to purchase certain songs.
I'd like to see a DRM technology that allowed music buyers to resell the music on eBay... By allowing the owner to set the price, you allow reselling and variable pricing... the studio (original owner) could get a piece of every transaction...
Amazing magic tricks
This only makes them sound even GREEDIER than Jobs painted them.
Sometimes, the best thing to do with a certain type of person is sit back, keep your mouth shut, and let them bury themselves.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
and songs 10 years old should be 25 cents.
songs 20 years old should be 12 cents.
songs 40 years old should be 1 cent.
and the RIAA/MPAA should be burning in hell.
should is a wonderful word. let's show some respect for it.
Science : Proprietary , Knowledge : Open Source
here's the quick version:
Apple: "You guys are greedy."
RIAA goons like Bronfman: "We're not greedy. We just want all that money Apple is making. We don't want to do any extra work or promotion. Just send us more cash."
Electric Monkey Pants
I think he honestly believes they deserve a cut of the hardware sales that run the music. It's like a game maker telling Dell they deserve a cut of their profits from gaming machines.
Well....Back to piracy.
Remember also how CDs were considerably more expensive than LPs and cassettes when they came out, but it was promised the price would fall as soon as CD technology matured? It's funny how the average CD price never did drop after all, even though the production costs for CDs fell dramatically from above that of LPs to a fraction of it...
Just because you "bought" your iPOD, don't think you have a right to use it. If they have their way, you'll license the right to listen to music on it, and pay a subscription fee, just like Sirius or XM now.
Apparantly they want the market to decide, but get upset when the market decides that they won't pay more than $0, and downloads the song from p2p.
The reason you don't charge a different price for a more expensive movie is that the cost per showing is exactly the same regardless of the cost to create it (e.g. cost of wear and tear on the print, cost to the theater for projector maintenance, etc). You get more money back from a $200 million movie than for a $2 million movie because the more expensive movie is better. Supposedly. Being better, more people will go see it. Supposedly.
If it isn't better, that's the fault of the producers, not the consumers. You still have a market effect, its that stupid producers who produce excessively expensive movies that aren't worth it go out of business.
Same thing for the popular hit music - you'll get more money because you sell more, not because you charge more.
songs over 14 years should be public domain
It doesn't make sense to say "let the market decide" when there is no limit to the supply. I mean, when you download a track, you're not reducing the quantity of available tracks out there in the world. So regardless of the DEMAND, the supply (and thus the price) is the same. Any notion otherwise is an artificial limitation - exploiting popularity by saying "this band is more popular and, thus, you should pay $1.50 per song".
It's not a billion songs yet.
Sorry, I was off by a couple of months. It'll be a billion Real Soon Now, since the rate is accellerating.
It's clear the labels have made a heck of a lot of money by now on music they don't even have to physically replicate, distribute, etc., and they're making more all the time.
I think the big story here is how much money they get from the back-catalog now, that they weren't getting before. Most of the songs I've bought from the iTMS is over ten years old, and not particularly easy to find in a record store.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Because it's just an excuse to raise prices across the board. Every label is going to want their songs at the highest price point. Apple realizes that the iTMS drives iPod sales, and they don't want to alienate their potential customer base by raising prices.
After all, I am strangely colored.
I think the music industry's problem is that the market has decided, and it's decided it doesn't like the music industry's standard terms. The music industry doesn't like that decision and is trying everything they can including whining like a spoiled brat to get it changed. Unfortunately for them, the market isn't buying it (in several senses).
Exactly. And also, I find it interesting that the "industry representative" is stating that different songs have different intrinsic value--but never states that, for some songs, that value is less than 99c, sometimes approaching 0c, and that this music should also be charged appropriately.
I feel fantastic, and I'm still alive.
Apple is being controlling, but they have a vested interest in keeping song costs low to keep selling iPods, thus they are more aligned with my interests--low and consistent song prices--and therefore have my vote. The market is strong, but it's because of Apple and their consistent model.
Now, on hardware, the day that all parties can agree on a standard not controlled by one party--say Mr. Softy--but by a consortium similar to Mp3 or the Bluetooth SIG. Otherwise, at least AAC with Fairplay can work on both Macs and PCs. WMA should never be the defining standard.
Anyone who whines about being modded down should be.
The cost to actually produce a GOOD album is probably $50K. Last album I did tracks for, they were spending about $30K for 12 songs. Most of the time making an album is mixing. You can record 8 hours, and spend 4 times that amount mixing. So, if you are Maroon 5, and go record, say you plunk out $150K. Ok. And then you sell CDs at $16+ a piece. Ok. Then go look at DVD Movies. They spend MILLIONS, and they are right about the same price. And there is just as much work done there, if not more.
I am one of those who's gripe with the who CD thing is that they have been the SAME price since the 80s. It doesn't make sense.
Of course GAS prices don't make sense either. Why we out here in California get dinged with really high prices after these hurricanes? They always say that our prices are because of the lack of refineries in California, and that they cannot ship gas in from out of state. Yet now when these two hurricanes go through, our prices jump up like $.20.
Oil/Gas and RIAA are price gouging. Plain and simple.
It's either on the beat or off the beat, it's that easy.
I moderate therefore I rule!
--
I fear you are both correct and mistaken. From the article:
Mr. Bronfman said the music industry should not have to use its content to promote the sale of digital music devices for Apple or anyone else, and not truly share in the profits. "We are selling our songs through iPod, but we don't have a share of iPod's revenue," he said. "We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.
When he said that they were selling their songs through iPod he should have said iTunes but he didn't mean iTunes, he meant iPod. He thinks that the record industry is helping Apple sell hardware and that they should get a share of the profits on the hardware.
Here's something that I stole from a site that stole it from the Wall Street Journal:
Consider the economics of the iTunes store. Apple charges 99 cents per song that is downloaded by a consumer. Of that 99 cents, Apple pays the record label about 65 cents for licensing rights to the song, estimates Charlie Wolf, an analyst at brokerage firm Needham & Co. Other analysts come up with similar figures. In addition, Apple incurs costs such as credit-card fees, which typically amount to 25 cents a transaction (which can include several songs), plus 2% to 3% of the amount charged. The result: On average, Apple earns less than a dime for each song it sells from the store.
So here's what's going on. If you buy one song and use your credit card (assuming that your credit card company and Apple will let you use your credit card for a 99 cent purchase) the credit card company gets 25 cents plus another 2 or 3 cents and the record company gets about 65 cents. That leaves Apple with 6 or 7 cents. If you buy more than one song at a time the credit card company doesn't get the 25 cents on the second through infinity dollars but they get that 2 or 3 cents on every dollar and that 25 cents on every customer. So the best Apple can do is 32 cents per song minus 25 cents per customer, and that money has to cover all of their expenses--bandwidth, advertising, payroll, electric bill, water bill, telephone bill, building maintenance, lawyers to keep the record companies from getting any more than they already do, and anything else that they wouldn't have to pay if they weren't running iTunes.
The record companies, who don't have to pay much of anything they didn't already cover getting those songs ready to go onto a phonograph record, cassette, 8-track, or CD (except for the lawyers to try to screw Apple), know that Apple's not about to give them a bigger cut out of that 99 cents, so the only way they are going to get even more "money for nothing" is to either convince Apple that the record companies deserve a cut of the profits on the hardware (which would go over about as well as Microsoft saying they deserve a cut of Mac sales because Office for the Mac drives Mac sales) or getting the price per song above 99 cents.
You'll notice that although he said that the market should decide the price and not a single retailer, he didn't say anything about any songs selling for less than 99 cents, so before long that will be the "fair market price" for songs so low in demand that no one will pay more, and everything else will be higher in price and before long you'll be paying as much for downloads as for a physical CD, at which point they will no doubt declare physical CDs underpriced.
Remember, Apple is doing almost all of the work and paying almost all of the expenses on iTunes while the record companies get 65 per cent not of the net or the profit, but 65 per cent of the gross and the record companies think that they're doing Apple a big favor and that they should get a cut out of each iPod sale as well. Tell me again who the pirates are?
I see even classic Slashdot is now pretty much unusable on dial up anymore.
Someone with a wicked sense of humor. If I could moderate the moderation as funny, I would. I've got the points too.
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
Yes, he's Canadian :)
Is iTunes their largest online retail outlet? At a guess, I would have thought it was, say, Amazon...?