Slashdot Mirror
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.
Why complain ? It is their stuff, and they can price it at any level they want. You can always buy from somewhere else or refuse to buy it altogether if YOU think it is too expensive, but I'll bet you that lots of people will keep buying at the new, higher prices. Why leave money in their pockets if they are willing to give them to the record companies ?
Happy Posting.
I wonder if 'flexible pricing' will allow them to adjust prices 'on the fly' - let's say 10,000 users download Song A priced 99c and software automatically then adjusts the price to say 1$ 29c or similar price.
Then again, there is no end to corporate greed so I'm expecting to see this in action.
Shouldn't B-sides actually be cheaper than the hits? New material more expensive than oldies? People have been justifiably complaining for years of having to buy whole albums just to get one or two songs they want, and now they don't have to.
The reason people complained before is that the record company exec was insisting that Apple raise prices but not lower any prices, which is just foolish. You can let the market help you set pricing to maximize profit, but you can't have it both ways. If you just raise prices that's not letting the market decide, and you'll lose money from people who would pay $.49 for a less popular song but not $.99.
It makes sense to me that the one good song on an album would go for more than the rest. The record companies are ticked that they're losing revenue that they used to get; it used to be you had to buy an entire $12-$16 album to get the one non-sucky song. Perhaps $.99 is too low for that song, if people are willing to pay more, as evidenced by the fact that they used to spend MUCH more.
There will be the inevitable replies to this about how you can get it all for free on P2P, but Apple has demonstrated that people will pay for music if it's convenient. Now they get to fine-tune the pricing model.
Personally, I look forward to it. If the latest top 40 goes up, and the older and obscure stuff that I want goes down, I win, at the expense of the rubes paying $2.49 for whatever is hot today.
If they are going to use demand for a product to determine pricing, they should also be required to factor in supply. The supply is infinite, so then the price should be practically nothing!
I like ITMS - a lot. But if songs start rising in price I will simply use AllOfMP3.com any time I consider a price to be unreasonable, possibly dropping ITMS altogether if variable pricing gets too crazy.
What I see happening is the EMI song sales on ITMS start dropping substantially.
What I would do if I were Apple is tell EMI they would be happy to drop thier music altogether. Apple can only do that to a certain extent of course as ITMS wouldn't hold up well with no major label support (or, perhaps it will would with indie stuff? Hard to say) but record companies are getting a fair amount of money out of ITMS and I think being cut out cold might have a few exec heads rolling at the loss of many milllions in recurring revenue, and probably some arsists chafing to drop the label. Record labels can only afford so much heat and if new acts wont sign with you because you're not on ITMS then it could affect the bottom line substantially.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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." Who decides the price points, however? Who decides which albums/songs are popular vs. less popular? Would Apple decide, or the music companies? Is it "according to traffic on iTunes" -- e.g. when more people buy it, the price goes up, like a stock -- or "measured by radio play or CD sales or Billboard ranking", or "what the record companies are declaring as popular"? What's the reference???
$nice = $webHosting + $domainNames + $sslCerts
1) Start signing bands on a 50/49 cent split. (OMG...can you imagine it, artists getting more money than the label for a change)
2) File a lawsuit on behalf of the artists...that said artists only negotiated "analog" recording distribution rights. That none of the old contracts covered digital distribution. And that all of the artists retain the rights to their digital distribution, including the right to negotiate a digital distribution contract.
(Think about it, a) the common people would support it as I would buy a lot more music at $0.99/song if I knew the artists actually benefited. b) think of how many artists would support such a move? big names too like "Paul McCartney"... As many artists were screwed over big time. Even big name artists saw very small percentages of their songs. This would allow Paul McCartney to regain ownership of his music (for digital distribution only). RIAA would still retain the analog rights (but we all know that's a dying medium). And with RIAA pushing so much legislation distinguishing the difference between Analog and Digital (DMCA) there may in deed be enough cause for a court to decide in Apple's favor especially if 90% of the artists and consumers are in favor of it as well.
RIAA would find themselves the owner of an extinct business model. Left with a rotting carcass...
- The Saj
except that we already have heard from the RIAA robber-barons that they want to be charging more for new releases.
if they really understood, well, anything, let alone economics, they would not be giving their customers the middle finger on a daily basis.
what I want to know is, what the hell happened to Jobs calling them greedy and standing firm on the flat pricing scheme?
Come read my stupid blagablog. Rants and Giggles
Of course, the real issue isn't really legality-- it's whether the record company will sue. If it's illegal and they sue, you're screwed, and if it's legal and they don't sue, you're fine. However, if it's legal and they sue, you're still screwed, and if it's illegal and they don't sue, you're still fine.
To date, I have no knowledge of anyone being sued for copyright infringement for simply having mp3s on their computers. It's always the sharing that gets you, partially because it's easier to find you if you're sharing, but also because it's easier to demonstrate you did something illegal-- copyrights were intended to deal with unauthorized distribution, not unauthorized viewing/reading/listening.
Ok, all that to say, it's not that clear. You pay your money, you take your chances.
Well, they could not renew the contract. If Steve has the balls he might just remove all of that labels' songs from the store and see how they like losing all the potential earnings. iTunes has a huge market share and I don't think people are going to just up and switch that quick to another store (especially when so many people have iPods). Steve has lots of bargaining power here and one of the big things about the music store when it was released was the simple pricing (although, the album pricing is more flexible than it used to be, so you can no longer predict how much an album will cost, unfortunately). I will not buy a single song for more than a dollar, so if they do raise prices, I just won't be those songs. Also, who knows, it might give a big push to the smaller labels like CD Baby when all their music is much cheaper.
Also, in reply to like the great-grandparent, I do believe iTMS is profitable these days. I think they are making a nice little profit, actually (nothing compared to the iPod sales, but nothing to sneeze at either).
Andrew