Apple iTunes to End Flat Fee Pricing?

MdntToker writes "According the Forbes, EMI has an understanding with Apple that flat fee pricing will end within the next 12 months, and more popular songs will be priced higher than 99c, while lesser known acts will be priced lower than 99c." From the article: "Label executives have made multiple arguments for flexible pricing. They argue, for instance, that almost all retail businesses have different price points for different products. But they are particularly interested in boosting their revenue from digital music sales, which aided by the sale of mobile phone ringtones, are increasing but not quickly enough to replace the continuing drops in compact disc sales. EMI said today that digital sales, made up 4.9% of the company's sales in the last six months, up from 2.1% a year ago." We've previously reported on this story.

Comments

The "Flexible" Elevator - Going Up?

[erick99]

I take it that this will translate into the vast majority of what is downloaded being above ninety-nine cents; otherwise, I don't see why they would bother with "flexible pricing." I know this is cynical - but I suspect that this is intended to be flexible mostly in an upward direction . . .

Re:The "Flexible" Elevator - Going Up?

[interiot]

Not necessarily; profit is one of those microeconomics things that is a curve. If you're on the top half of the curve for a specific product, lowering the price of a product will increase profits because volume goes up faster than unit-profit goes down.

Re:The "Flexible" Elevator - Going Up?

[Golias]

The new digital model the GP was referring to is the band creating a website, hosting it, and charging $0.25 a song download (or even givign it away for free and make money selling merchandise or concert tickets). Therefore, the music store is obsolete (or can be used just for selling branded merchandise).

Name three rock bands who were never signed by labels and make a living that way sufficient to quit their day jobs.

Imagine if the music version of slashdot existed (it may already, I don't know). Bands could post links to their new releases, users can comment on the songs / bands, and the best bands will gain the largest following.

Dozens of such sites exist. Hardly anybody goes to them. A few hard-core people do so they can pat themselves on the back for supporting indie bands, but most people fall in love with some fractin of the crap they hear on the radio. Even psuedo-indie acts like Death Cab for Cutie are in the position they are in only because a record label pimped them like crazy.

If you will pardon me for briefly playing the Devil's Advocate...

One could easilly make the case that the work done by a record label is more important to the financial success of a music act than the work done by the band itself. When you look at it in that light (and realize that the labels take the brunt of most of the financial risk), it really isn't so eeeevil that they take a bigger slice of the pie.

I mean, David Gibbon just sat in front of a microphone and crooned for a few hours. Behind every album his band has made, there was an army of promotors, engineers, event planners, office staff, and several layers of management, all putting in 40-hour work weeks to make sure that you and as many of your friends as possible buy the album. They all worked just as hard as he did, and for considerably less money. Yet people consider it this horrible injustice when this ONE EMPLOYEE of the record company, who happened to have the most fun job of anybody involved, doesn't get to hog a majority of the profit for themselves.

So yea, if you are a singer and think that's unfair, go out and try to do the work of all those people by yourself. You will probably end up with a much larger slice of a vastly smaller pie, unless you are just as good at music promotion as you are at being a musician.

So the model becomes ever more like...

[w.p.richardson]

allofmp3.com?

Only way more expensive...

And encumbered with DRM...

No thanks!

Guys, this is a strange story

[daviddennis]

"Believes"?

It's a story if you have someone say that he "knows" Mr Jobs will do something, or - better yet - if Mr Jobs actually says he's doing something.

But if a record company executive says it, and he has a vested interest in having it happen, and perhaps almost a desperate need for it to happen, well, I don't think his word or judgement is necessarily good.

Record company executives have, from what I've noticed, little reputation for integrity. Until I hear this from Mr Jobs' mouth, or a slick press release and video from Apple about its inevitability, I'm not going to believe it.

D

Just to make sure...

[Spytap]

...So the most easily pirated material (the popular stuff) is going to be more expensive, while the harder to find stuff (the less popular songs) will be cheaper? Either they're changing their business model more drastically than ever before in their history to expand the appeal of smaller artists...or they're just in it for the short run to prove that digital downloads don't work...

Feedback is beneficial for all.

[CyricZ]

It's important to complain, as that provides them with feedback on their decision. Everyone is better off if there is dialogue between the two parties.

If enough people voice their opposition, then perhaps Apple will realize that it is not in their best interests to switch to such a scheme. Thus everyone is potentially better off if Apple listens and responds accordingly. Customers can then continue to purchase the songs they want, rather than to boycott. Apple can continue to receive revenue from such customers, rather than having the customers go elsewhere.

Notice that the same thing happened recently with regards to Novell/SuSE and their switch from KDE to GNOME. They announced the switch, and many customers complained. The customers let them know that KDE was still wanted. And what did Novell do? They agreed to keep offering KDE.

It's better to work out such problems before involving money.

Sounds good to me

[mapmaker]

The world's 14 year olds can pay $2 for the latest 50 Cent "song", and I'll pay 50 cents for real music.

The "Possible" Elevator - Going Nowhere?

[danaris]

Yeah, but is anything really going to happen?

From what TFA says, this is based on what one music industry exec thinks Steve Jobs might do. Now, if it was something the exec had heard that Jobs was going to do, that might be something.

This looks to me like nothing more than wishful thinking. And Slashdot jumps in with a sensationalist headline proclaiming certitude, never one to let a little thing like reality (or sanity) get in the way of a nice flamewar...

Dan Aris