The Real Reason Behind iTMS Tiered Pricing

Raindance writes "Joel on Software has an interesting piece on why Big Content is making loud noises about moving from 'flat fee' to 'tiered' pricing models on the iTMS. According to Joel, it's not about pricing songs commensurate with their economic value; rather, it's about allowing the labels to manipulate public perception of value through pricing." From the article: "And now when a musician gets uppity, all the recording industry has to do is threaten to release their next single straight into the $0.99 category, which will kill it dead no matter how good it is. And suddenly the music industry has a lot more leverage over their artists in negotiations: the kind of leverage they are used to having. Their favorite kind of leverage. The "we won't promote your music if you don't let us put rootkits on your CDs" kind of leverage."

Comments

Oh fer cryin out loud

[winkydink]

It's all about making more money. Period. Anything else is gravy.

Re:Oh fer cryin out loud

[file cabinet]

I agree. How much "leverage" is this tiered pricing if the artist doesn't get a piece of it anyway? (unless they are.. I have no idea)

Re:Oh fer cryin out loud

[SatanicPuppy]

Yea, the argument makes some sense when applied to movies, but no sense when applied to songs, because its a serious time investment to watch a whole movie. But you could listen to two or three whole albums in the same amount of time, while doing other things.

So if someone hears a song they like, and they go online to buy it, are they going to see the lower price and immediately think, "Oh no, I like a cheap song, I must be weird." or are they going to think, "Na na na na AND IT'S ON SALE!!! WOOT!"

I may be crazy, but if I like something and it turns out to be cheap, so much the better.

Re:Oh fer cryin out loud

[Dr. Bent]

No, it's not. To some people, having control is more imporant than making money. The music industry is full of these kinds of people. They just like to feel powerful, to make other people do what they say...making money is only a means to that end. The music industry is not particularly profitable. The reasons why are completely obvious to all of us, and I suppose, to them. But they really don't care. If they were in it for the money, they'd be embracing digital music and finding new (and profitable) ways to deliver it. Instead, they fight against it, and sue anyone who gets in the way. Ask yourself this...why is it that cell phone ringtones make more money than digital music sales? (Don't believe me? Google it) How could you possibly run a company so poorly?!? The answer is, they're in it for the power...for the glitz and glamour. And from their perspective treating your customers like criminals and your employees like slaves is the best part of the job.

Re:Oh fer cryin out loud

[Anonymous Coward]

Yeah. Like people who have no particular insider knowledge telling the rest of us How It Is.... And people who post on a website to tell other people they are wrong. Seek help.

Re:Oh fer cryin out loud

[QuietLagoon]

It's all about making more money. Period

Absolutely correct. Why sell a song for $0.99 when you can sell that same song for $1.99? In the world of hit songs, when a song is popular the record company can almost name its price.

It always amazes me that Joel can write so much on things about which he knows so little.

Re:Oh fer cryin out loud

[Anonymous Coward]

ummm... read the article closer, he IS saying it's about making money, just not in the way they say, it's about convincing you that a song you used to pay .99 for is now worth $2.49...

Re:Oh fer cryin out loud

[kponto]

The music industry is not particularly profitable

Nonsense. It's hugely profitable and gets more profitable every year (Don't believe me? Google it)... it's just not profitable to artists.

Ask yourself this...why is it that cell phone ringtones make more money than digital music sales?

Because; A) There are vastly more cell phone users out there than people who listen to music on their computers; B) You can order a ringtone right from your phone without ever giving anyone a credit card number (which dissolves the sense that you're actually buying something and therefore removing a barrier to entry); C) Cell phones ringtones are a vanity, something that everyone around you hears whenever it goes off. People are obsessed with how they appear, especially true with teenagers, who are the number one market for ringtones. A cool ringtone makes them cool, and cool changes very quickly these days which requires new ringtones; and finally D) Until recently, ringtones were limited to MIDI files and the like, which take all of 30 seconds to create and then proceed to sell hundreds of thousand of copies. The overhead for production is miniscule which means that the profit margins are ludicrous.

Re:Oh fer cryin out loud

[Golias]

In spite of all the catterwalling you've heard, the truth is that the majority of artists who fail to go platinum once or twice don't really make much money for either themselves or the label.

Once an artist on a three or five album deal starts enjoying a bit of mainstream success, that's when there's real money involved, and therefore it's also when there's something worth arguing over. Battles between hit artists and their labels are sometimes legendary.

Here's the usual path:

New artist establishes a scene in some local market as a live act, or is the cousin of a hot-shit producer, or the favorite new project of Madonna or Prince or Jimmy Jam & Terry Lewis, or whoever. Anyway, they get a deal to make a record.

The record, usually made up of their best ideas from years of being a struggling performer, becomes a hit, but not enough of a hit for the artist to pay back all the money the label fronted them. The artist is living well on their advances, but also badly in debt and constantly on tour to promote sales.

It is, however, enough of a hit for the label to sign the artist for a few more albums.

In order for the artist to keep their head above water (and in order for the label to cash in on the "new artist" hype) a second album is rushed out. If the artist is out of material and can't write new songs fast enough, half-thought-out songs are slapped togther, other writers are hired, or licenses are bought for a cover-song or two to pad out the album. Whatever it takes to get 35-40 minutes of music on a disk and get it out to the shopping malls.

More often than not, the album sucks and hardly anybody wants to buy it. This is often called "the sophomore jynx" among music critics. Artists who manage to work well enough under pressure to dodge this particular bullet often become the ones which the labels will latch on to and try to turn in to "the next Beatles."

Since there's a contract for a third album, and (for the bands who bombed on the second) no real rush to get another one out, the artist is able to take their time and make something which is guided more by their creative vision (or the creative vision of their producer, in the case of disposable pop acts), and generally a slightly better album is put out. If the critics like it, the artist just might get a chance to re-emerge as a hit machine.

At this point, the artists who had a hit on either their second or third album are likely to be in the black (unless they were ripped off by their management or ran out and bought their own soccer teams or something). This is when it gets interesting.

A label has a contract with that artist, one which is very profitable at this point. They want to keep that artist in their "stable", but doing so is likely to get a whole lot more expensive when the time comes to negotiate the next deal. There's two ways they can respond.

1. They can promote the shit out of the artist, make as much money as they can off the next album or two, and let the future take care of itself. Even if the artist bolts for another label, you can always exploit the material of theirs you own with yet another "greatest hits" collection or "retrospective" or "complete box set" every few years.

2. They can let the artist's popularity dwindle to next to nothing, making it cheaper to re-sign them, and then ramp the machine up again when you have a mutual committment for a few more years... or not. You can also make money off them as a "niche" act (as Crysalis did for years with Jethro Tull), by spending almost nothing to promote them while loyal fans buy their albums based on the artist's name alone.

Either choice is a risk. A lot of labels go with option #2, and that's when you get the really, truly entertaining hair-pulling, eye-poking, bitch-fests of rage from the likes of Prince or Metallica. The artist became a multi-millionaire by working with the label, but now they see vast sums of potential money their label seems to be ignoring, all while keep

Re:Oh fer cryin out loud

[GlassHeart]

It's all about making more money. Period.

Yes, it is. The question is, are people willing to pay more money for the same thing? If the answer is still "yes", then the next question is how can we let the content authors make more money without hampering things we care about, such as the freedom to manipuate the content we buy and the eventual richness of the public domain.

Put another way, there's make more money while pissing off geeks, and there just might also be make more money without pissing off geeks. The challenge - if it's all the same to them - is to move them towards the latter. So the discussion is still worth having.

Re:Oh fer cryin out loud

[Anonymous Coward]

And no one remembers that back in 1959, you could go to the store and buy a single, remember 45's, had two(2) sides, and it only cost 99 cents (plus tax), I think we are getting ripped off at 99 cents today.

Re:Oh fer cryin out loud

[HardCase]

And no one remembers that back in 1959, you could go to the store and buy a single, remember 45's, had two(2) sides, and it only cost 99 cents (plus tax), I think we are getting ripped off at 99 cents today.

A bargain today! Based on the Producer Price Index, that single would cost $4.33 today - or $2.165 per song.

Re:Oh fer cryin out loud

[VP]

Even if the artist bolts for another label, you can always exploit the material of theirs you own with yet another "greatest hits" collection or "retrospective" or "complete box set" every few years.

This is the key to the travesty that passes for "music business" these days. Why do people think it is OK for a publisher to "own" somebody's creative work? Aren't there better ways to do "music business"?

Re:Oh fer cryin out loud

[Trepalium]

Nonsense. It's hugely profitable and gets more profitable every year

Of course they are. However, the RIAA released statistics and press releases show that record sales (and perhaps even gross revenue on CD sales) are down by some small percentage since 2000. In an normal industry, this would normally mean profits have become slim or non-existent. Because of this, people just automatically assume that unit sales and profits are linked. The RIAA never mentions if profits are down or not.

The RIAA is equal parts accountant and advertiser. This gives them an enormous grasp of the practice of distorting reality to serve their needs. They don't need to lie when they can pick and choose which figures suit their goals best.

Re:Oh fer cryin out loud

[Jeremi]

This is the key to the travesty that passes for "music business" these days. Why do people think it is OK for a publisher to "own" somebody's creative work?

Are you saying that artists shouldn't be allowed to sell the ownership rights to their work?

Re:Oh fer cryin out loud

[netringer]

And no one remembers that back in 1959, you could go to the store and buy a single, remember 45's, had two(2) sides, and it only cost 99 cents (plus tax), I think we are getting ripped off at 99 cents today

It was more like 49 cents or 59 cents. And as Chuck Berry, Bo Diddy, and Little Richard tell it, they had to sell TWO 45s to get a penny. They got half a cent per record.

Re:Oh fer cryin out loud

[DannyO152]

Except. Look in the record stores. Look at how many opportunities for discounting first releases or make-or-break releases from critically acclaimed bands they have and how many times this is used to try and increase demand. Almost never. I think Mr. Spolsky may be on to something, even if I disagree about the song "Brandy (You're a Fine Girl)" being the hit it was because of payola. About the point that hearing drives demand -- YES!!! But, again, look at all the new releases on sale which have tracks you haven't heard or are from people you don't know. Would a $5.00 price lead you to ignore the unfamiliarity factor and buy the disk? That's the point; it won't.

Re:Oh fer cryin out loud

[Overneath42]

This is probably the smartest analysis of the music business that I've ever read. As someone who pays attention to the way the industry operates, and the way that musicians are chewed up and destroyed by it, I'm glad there are people who really understand the truth of what the business has become. I know it hasn't always been this way, and I don't know how it got here.

Re:Oh fer cryin out loud

[Anonymous Coward]

Are you saying that artists shouldn't be allowed to sell the ownership rights to their work?

That's right. To protect the rights of copyright owners and the general public, there should be different classes of copyrights, each with limits on their transferability.

The copyrighted work of a human should be protected from big buisness interests. It is totally unreasonable to transfer the copyrighted work to a buisness entity. The use of this copyrighted work should not exceed a reasonable contractual agreement. If this contract defines exclusive use of the copyrighted material, then this contract should define how the buisness entity is allowed to use the work, how it is expected to promote the work, and how it is expected to compensate the copyright owner for this exclusive use.

Re:Oh fer cryin out loud

[lachlan76]

I (personally) think that it would be a good idea, and that labels should be forced to license it.

Re:Oh fer cryin out loud

[SonicSpike]

Well... it is real simple.

An individual singer/songwriter usually does not have the business skills, capital, resources, networking contacts etc to promote their own material. They are the creative element of the mix. Most of the time they need a business element in order to market, exploit, and further the artistic element.

Since most singer/songwriters do not know much about business, or they are not able to conduct the business themselves, they have to partner with someone who does. This partnership results in the limited transfer of the right to copy and exploit the person's creative works.

Think of it this way - how many inventors would want to actually manage their own companies? Most would not. Most would want someone else to handle the business, the accounting, the marketing, the selling, the taxes, etc so that the inventor themself could focus on the actual productivity and creative side of things: the inventing itself.

That analogy is very similar to the typical situation a singer/songwriter is faced with. Focus on the art, let someone else sell it.

Re:Oh fer cryin out loud

[Anonymous Coward]

e) at least one of these "ring-tone" sellers is not seling ring-tones *at all*, but subscriptions.
I'm not sure how *subscriptions* are added into the calculation, but if they are they should (currently) have a general *NEGATIVE* effect (as most, if not all of the conned subscribers wil retalliate).

Ofcourse, a coorporate entity will do with whatever data whatever they want with it, which is (next to selling it to spam-brokers) adding it any way they want (positive, or negative) to whatever sales-figures they have ...

Re:Oh fer cryin out loud

[Anonymous Coward]

This is the key to the travesty that passes for "music business" these days. Why do people think it is OK for a publisher to "own" somebody's creative work? Aren't there better ways to do "music business"?

The same reason why it's OK for my employer to "own" my code. My company pays me for my code; the labels pay the artists for their songs. Both are only a small component in the eventual product - for the musicians, most of the sales come because of heavy promotion by the label, not the quality of the music.

Re:Oh fer cryin out loud

[1u3hr]

Why do people think it is OK for a publisher to "own" somebody's creative work?

Because the artists signed a contract and sold it to them.

Re:Oh fer cryin out loud

[meringuoid]

Mmm, ringtones.

* pulls out phone, flips through recent ringtones *

Hmm.

We Gotta Power
You Get To Burning
Theme from Knightmare
Cruel Angel's Thesis
Tank!
We Were Angels
Sampo

The interesting thing is, grossly uncool though all these ringtones are, they're actually more effective at Getting Noticed. They're ringtones that nobody else has, and possibly that nobody else has ever heard. Sometimes it pays to be weird :-)

(oh, and they were all free from fansites over GPRS. None of this three-quid-a-week to Jamster or whatever the latest rip-off might be...)

Re:Oh fer cryin out loud

[Ohreally_factor]

There's a Joni Mitchel quote that I'll have to paraphrase. "Back in the sixties, record execs were just as conniving and greedy as they are today. The difference is that they actually liked music back then."

Re:Oh fer cryin out loud

[Halfbaked Plan]

Then, to answer the grandparent's question, you don't think that artists should have the right to sell ownership rights to their work.

Any arrangement where 'the labels' (to use your caricature for 'the bad guys' which is just that- a caricature) don't have the right to exclusive ownership is one in which the artist isn't free to sell that exclusive ownership.

'Back in the USSR' indeed.

Re:Oh fer cryin out loud

[dswan69]

The labels start making money pretty quickly. It is only the artists that have to reach multimillion sales to just break even.

Re:Oh fer cryin out loud

[SweetP]

So if someone hears a song they like, and they go online to buy it, are they going to see the lower price and immediately think, "Oh no, I like a cheap song, I must be weird."

Also, in the case of music singles, by the time you decide to buy one, you've already heard the entire song and you know that you like it, so a low price won't deter you. But in case of a movie, when it comes time to plunk down your cash at the theatre, you've only seen a 60 second trailer for a two hour movie, so seeing a low price might discourage you. How often have you asked a friend about a movie and gotten the response, "Bleh, all the best parts of the movie were in the trailer."

So on one hand you've got music singles, where you've sampled the entire product before buying, and on the other hand you've got movies, where you've sampled little or nothing before buying. I suspect that entire music albums fall somewhere in between these two extremes, but closer to the movie end than the music single end. In my pre-P2P days, I used to buy albums only having heard one or two songs on a 12 song album, which is a fairly big gamble. With this new tiered pricing, if I heard a hot single and then went to buy the album and saw that it was discounted, I might think, "Oh no, not another crappy album with two good songs and 10 songs of filler", and decide not to buy it.

Re:Oh fer cryin out loud

[jbolden]

Not at the current volumes of sale. Quite simply our music ecology is based on a willingness to spend a huge amount of money on marketing. Most of those marketing efforts will be net losers. The profit comes from making huge profits on the winners (lose $1 4x, make $5 1x). Artists for obvious reasons can't do this marketing themselves.

Americans like mass market corporate music and choose it over independent music. The huge money and fame comes from being part of mass market corporate music so the bands (in general) choose to be part of it over independent music.

So no there isn'ta better way to do the music business without a restructuring of musical taste. "Long tail" music might eventually kill this way of doing music but I'm not sure the long part of the tail is thick enough for it to make much difference.

Re:Oh fer cryin out loud

[lachlan76]

Any arrangement where 'the labels' (to use your caricature for 'the bad guys' which is just that- a caricature)

By "the labels" I mean "the distributors", who sell the music. They are not intrinsically bad, it's just that the major ones tend to have bad qualities.

Any arrangement where 'the labels' (to use your caricature for 'the bad guys' which is just that- a caricature) don't have the right to exclusive ownership is one in which the artist isn't free to sell that exclusive ownership.

Nothing is preventing the artist from selling an exclusive licence for distribution and sublicensing, my point is that at the end of the contract, the artist should own their work.

To use another analogy: I can make a contract that says that I will work. I cannot legally sell myself into slavery (ie. I can sell the use of myself, but I am not able to sell myself). Do you consider that to be an infringement of my rights?

'Back in the USSR' indeed.

For it to be Socialistic/Communistic, the work would have to be owned by the government.

Re:Oh fer cryin out loud

[Halfbaked Plan]

For it to be Socialistic/Communistic, the work would have to be owned by the government.

Naw. For it to be socialistic/communistic, notions like 'the people', 'all of us,' 'the common good,' and 'public domain' all work well. Under the fantasy called 'communism' the governement as an entity is supposed to wither away.

Re:Oh fer cryin out loud

[trentblase]

Actually I've noticed quite the opposite. It seems like all the latest pop hits are on sale for $9.99 and the 10 year old CD by my favorite (only somewhat obscure) artist is $17! Sure, the CDs in the $5 bargain bin suck, but good artist's CDs only seem to go up in price as they get older.

Re:Oh fer cryin out loud

[Mattintosh]

There is a better way. What follows is an outline of a music-industry-killer, step-by-step.

1) Start a record label with some morals.
This is very important. This will be the basis for the money-manufacturing setup to follow. It will also piss off the current labels. A good start for "morals" would be Google's "Do no evil" thing. This would probably involve signing a band and retaining exclusive right to distribution for a limited time. Something like 5-10 years, then their music becomes sort of a "free agent".

2) Distribute music in all feasible forms for a reasonable price.
A website that sells your music should (at present) sell in these ways:
  - non-DRM'ed individual song files for a low price, allow customer to choose format, vary pricing for lossless vs. lossy.
  - non-DRM'ed albums for the same low price (multiplied by the number of tracks minus some sort of quantity discount), accompanied by low-res artwork, allow customer to choose format, vary pricing for lossless vs. lossy.
  - a plastic disc for a higher price, plus shipping, containing full artwork, allow customer to choose format (CDDA, DVD-A, SACD)

3) Distribute other album materials in various other ways. Be creative here.
You could sell album artwork pre-printed on poster-sized paper. You could sell high-res artwork downloads so people could print their own. As Yogurt says in Spaceballs, "Merchandising!"

4) Set up a ticket-sales site for your bands. Offer this as part of the contract, or for a minimal fee.
By now, your bands should love you and the word should spread like wildfire that you're the Bestest Record Label Evar. This will only serve to make more money for you and your bands.

5) Set up a scheduling arrangement for your bands so they can easily self-manage tour dates.
This is a huge jump. You have to not only schedule your label's bands, you also have to nail down dates with venues. This supplants their agent (pissing him off, undoubtedly). Be sure parts of this are contractually based, making it "part of the package." Which leads to...

6) Set up a scheduling arrangement for venues to request your bands.
Come to agreements with the venues to "lend them your ear" when a band is reluctant to play in a particular place. Persuade bands to go to those places. Persuade venues to pick up bands that feel they aren't getting enough work. This is when you become a manager and talent scout simultaneously. Of course, most of this work can be automated once the contracts are signed.

7) Sign up some indie film producers and start selling video on the site.
Do the same thing as with the music in steps 1, 2, and 3.

8) Arrange for distribution and showings in theaters.
Do the same thing as with the music in steps 4, 5, and 6.

After this, you could continue to grow the business by buying out "catalogs" of music and keeping them for perpetual cash-cow status (like record labels already do), buying films and doing the same, building your own concert/theater venues, encroach upon the live-action theater industry in the same pattern as above, establish retail presence (like Apple did), or any number of other ways to part the masses from their money. As long as you stay humble and keep the "Do no evil" credo, you'll manufacture money. There's no business tactic more cutthroat than the truth.

Re:Oh fer cryin out loud

[jbolden]

I don't think you are thinking this through. It sounds more like a "I wish record companies were run this way" and doesn't really address my point (which was about band selection not mechanisms for running a record company better).

Anyway a few comments (though I don't work in the industry either).

1) If you own the artist's work and own their performances than they simply employees and all sorts of labor law applies. In particular you may have a great deal of trouble avoiding "wrongful termination" when a band is no longer profitable.

2) If you own the music for only 5-10 years you lose the "greatest hits" catalogue sales which are a large percentage of the money you make from bands. That's about a quarter of the sales for a succesful band which is enough to make taking the risks on new bands / new music no longer profitable.

3) The rest boils down to selling stuff in a variety of venues. Record companies are happy to sell in any venue. They would to sell (and used to during the 1970s-80s when there was a large market) album art as posters, teeshirts... They don't do it because they can't do it profitably not because they don't want to.

Apple's Tune

[Nom du Keyboard]

it's about allowing the labels to manipulate public perception of value through pricing

Is this why iPods cost so much. Public perception that paying more has somehow gotten you more? If so, the music industry is only playing Apple's tune.

Re:Apple's Tune

[Rodney.Quills.Dinkin]

artists are making more money off selling ringtones than useless 0.99 itunes songs.

Re:Apple's Tune

[Denyer]

Yeah... and I don't think it works with music. People don't turn round and say "hey, that album costs $25 so it must be better", at least in my experience... they say things like "wow, that's overpriced."

On the other hand, if there's an RRP of $25 and stores are selling it for $15, people may feel they're getting a bit of a bargain, and spend more freely...

Re:Apple's Tune

[SatanicPuppy]

All that theory seems to be based on buying things solely because they're expensive. I mean, he would have us believe that the cool kids would immediately go down the 2.50 new releases, buying each one and scorning the cheap songs. I don't see it working like that.

If I like a song and I see the album, and the album is cheap, I'll take a chance on buying it because I may like more stuff on the album. But if I like a song, and the album costs a fortune, no way will I buy it for just the one song.

And online, I never buy songs that I haven't heard before. Why would anyone do that? It's the proverbial pig in a poke...Don't buy something when you're ignorant of what you're buying, for the proverb impared. So if you already know, then the only reason they can be pushing the higher price is because they think they'll be able to sell enough units to make more profit than they would have made at a lower price.

That's just common sense.

Re:Apple's Tune

[skiflyer]

It all depends how the shelf is organized... right now it doesn't work with music because the shelf is organized by genre->artist->album... all of the KMFDM albums are next to eachother regardless of price.

Unless an album finds its way into the bargain bin, where it is mostly ignored.

But online you can put albums in multiple places with no difficulty... so it can stay on the shelf next to the other albums, and be placed in the bargain bin.

Re:Apple's Tune

[damiam]

iPods are generally pretty competitive price-wise. Sure, you might be able to find a 30GB player somewhere else for less than $299, but there are many that cost more as well. I bought an iPod because it's a great music player that does exactly what I need it to and doesn't get in the way, and it integrates seamlessly with iTunes, which is a great music player/database in its own right. The fact that lots of people think iPods are cool is only a bonus.

Re:Apple's Tune

[IanDanforth]

Is this the case? Can you show me where this is documented? Obviously they cost more, but does that mean that artists are making more money off them? Not neccesarily and I'd like to see a contract which lays out the terms of compensation for both songs sold through iTunes and as ring-tones.

-Ian

Re:Apple's Tune

[BushCheney08]

Correction: somebody is making more off ringtones than itunes songs. I highly doubt it's the artist...

Re:Apple's Tune

[porcupine8]

I mean, he would have us believe that the cool kids would immediately go down the 2.50 new releases, buying each one and scorning the cheap songs. I don't see it working like that.

You're posting on slashdot, and you think you have any insight into what the cool kids would do?

Better yet, you assume that they would do whatever it is you do?

*giggle*

Re:Apple's Tune

[Denyer]

he would have us believe that the cool kids would immediately go down the 2.50 new releases, buying each one and scorning the cheap songs. I don't see it working like that.

Exactly. It's how he'd like them to react, certainly. Online stores aren't like shop shelves where the 'bargain' material is thrown into a wire bin where it can't be looked through easily, though...

Bring it on, basically. I think it'll help small artists tremendously, at the cost of decreasing sales and increasing illicit copying of label favourites.

Re:Apple's Tune

[electroniceric]

The problem with music is that the valuation is essentially subjective - there's no objective value on a song other than how people perceive it. Consumers are will to pay for something of "value", but when they think an item is not valuable, it takes a really low price to make them consider it. This is why the "price signaling" Joel mentions is so important in this case - the item's price has to be pushed up, or it will surely sink very low.

Re:Apple's Tune

[timeOday]

All that theory seems to be based on buying things solely because they're expensive. I mean, he would have us believe that the cool kids would immediately go down the 2.50 new releases, buying each one and scorning the cheap songs. I don't see it working like that.

I guess you haven't watched how the cool kids shop for jeans and shoes then.

Reason? For something that hasn't happened?

[Durandal64]

I hate to break it to everyone, but every song on iTMS is still $0.99. The RIAA is making noise about it because they want to put pressure on Apple to do it.

Re:Reason? For something that hasn't happened?

[Anonymous Coward]

We hate to break it to you, but flat pricing is GOING to end. Jobs has already agreed to it.

http://apple.slashdot.org/article.pl?sid=05/11/17/ 1752219&tid=141&tid=187&tid=3

Re:Reason? For something that hasn't happened?

[jonom]

Hate to break it to you, but if you had actually RTFA you linked to you would see that Jobs hasn't agreed to anything.

That one-price-fits-all structure may be on the way out, though. Today EMI Group boss Alain Levy said at press conference today that he believed Jobs would introduce multiple price points for iTunes music within the next year. Apple officials were unavailable for comment. If Levy is correct, the new pricing scheme would mark a turnaround for Jobs, who has argued that a buck a song was an easy to understand proposition for consumers and a victory for the music business, which has been calling for the move for the past several months.

Re:Reason? For something that hasn't happened?

[Chosen Reject]

Is it really? Or is EMI just talking out of their rears.

Rhyme and Punishment

[EraseEraseMe]

If they use the $.99 price as a punishment, does this not mean that the price for the rest of the songs available would be reduced? Isn't that 'a good thing' and marketing forces at work; supply and demand, etc etc.

Re:Rhyme and Punishment

[DreadSpoon]

No, you're missing the point. If a song was *only* $0.99, that would imply that it was crap. All the popular songs will be more expensive, not less.

Re:Rhyme and Punishment

[Conspiracy_Of_Doves]

I think you're missing the point. The music labels figure that a song will be popular because it is more expensive, and that less expensive songs will be less popular. The labels know what songs they want to have sell well. I think they are in for a big wakeup call.

Re:Rhyme and Punishment

[Anonymous Coward]

Read the article. Joel was suggesting that new popular songs start at $2.49. Older and crappier songs are at $0.99 in his example. So, if you get started at $0.99, people will think your song isn't very good.

Re:Rhyme and Punishment

[bornbitter]

No. Supply and Demand does not apply to data - least of all on the internet; the 'supply' is endless so demand has no bearing. The idea is that the perception of demand, or lack thereof, will be set by the record lables -- in an effort to control public opinion and song popularity. As I understand it; $.99 would be the basement price, no lower. (ie. "no one listenes to that song, why would I pay $.99 for a worthless song? Hey, that song is $2.45, ooh... *click*)

Re:Rhyme and Punishment

[JeffSh]

Yeah, that's what I gathered too. Their point of view doesn't make any sense to me, though. If I hear music I like, i get more excited and more likely to buy it if it's cheaper. like a $8.99 CD is way more appealing to me than a $13 CD for instance.

With services like Pandora becoming available, it becomes way easier to be inroduced to acts and artists you don't know, but still really would like. The control of delivery and marketing is slowly eroding, and this should bring the peaks and valleys closer together. i.e. acts considered "less" popular will get more exposure, and acts considered "more" popular will get less, if only because people learn about music different now that radio is being eroded.

atleast, that is the future i would like to see. who knows what's going to happen. Pandora is a great start. I hope it does not lose momentum or run into RIAA roadblocks.

Re:Rhyme and Punishment

[Rude Turnip]

"The music labels figure that a song will be popular because it is more expensive,"

Wow, cocaine is a helluva drug!

Re:Rhyme and Punishment

[ToasterofDOOM]

This is a senseless strategy; everyone I know, and I assume most people, use the "most downloaded songs" indicator and user reviews from the web.

Re:Rhyme and Punishment

[_spider_]

I know, and I did catch that. From a personal perspective, I know that paying a higher price doesn't get you a better product. But, you and I, and probably most Slashdot readers aren't really the 'mainstream' public that listen to the industrie's prop artists.

Their target I believe is young highschool-age/college-aged John Q Public, who buys $6.00 ringtones, and buys whatever cause he wants it, and just must have [Insert Band Here]'s latest album, or song he heard on the radio, to put on his ROKR or iPod. In other words, people who don't really think too much about what they are buying and from where.

Re:Rhyme and Punishment

[PasteEater]

I think they are in for a big wakeup call.

As much as I want to agree with you on this point, it may be worth the industry taking this chance. It's not like they really have that much to lose, seeing as they will make just as much money as they make now when they release a song for $0.99.

In the end, it comes down to stupid people believing record companies. I think there are plenty of ignorant people out there who will buy the marketing behind "expensive is better".

Re:Rhyme and Punishment

[Anonymous Coward]

Frankly, the only music I've looked at buying through iTunes is pretty indie. I'd almost be happy about this pricing scheme if smaller artists are cheaper.

Re:Rhyme and Punishment

[Anonymous Coward]

You would think that since people being songs will have probably already heard the song, they've already made their decision over whether the song is good. But I can cerainly see some types of people changing their minds over whether they like a song after seeing if other people like it.

Re:Rhyme and Punishment

[umeboshi]

Bittorrent works in a kind of supply/demand environment. I can easily imagine a system where you can buy songs more cheaply, and perhaps possibly pay them off using bittorrent to help distribute them.

Re:Rhyme and Punishment

[markov_chain]

I'm not an expert on how Apple's music licensing is set up, but suppose the big labels get their way and do tiered pricing. What happens to all the rest of the labels who have their music on iTunes? Can't they just happily use the top-tier price? Obviously, any crappy artist signed with a big label is screwed, but non-big-label content is unaffected by this deal, if not helped, since it won't have to compete with some fraction of the big label music. It seems that not only would Jobs have to give the big labels tiered pricing, but they would need to receive exclusive use of the top tier for this to work the way Joel describes.

Re:Rhyme and Punishment

[donweel]

Yes also consider that artists are also signing up with Itunes exclusive. If this becomes a trend and the artist can skip the bull and sell thier music directly to Itunes and have them promote it. They could find things backfiring mighty quick. I would love to see this blow up in thier face. Apple has the potential to become a powerful label in web space, because the big labels just don't get it.

Re:Rhyme and Punishment

[mrchaotica]

Well, you see, that's why it's the RIAA's goal to kill services like Pandora, because they want to make sure you only hear the (expensive) music they want you to hear.

Hmm. Maybe, maybe not.

[Denyer]

release their next single straight into the $0.99 category, which will kill it dead no matter how good it is.

Depends on whether the other singles are slipping towards $1.49 or £1.99 ... I'd certainly be looking at the $0.99 range for new or favourite artists. If the comparison is between, say, $0.49 (for back catalogue stuff, of which there's now decades) and $0.99, then yes the artists are in trouble...

Increase value, not price, for more profit

[dada21]

The article author has some decent insight but I think someone her is very wrong. If it's the author has the wrong idea, end of story. If the author is right then the labels are in trouble.

The value of music is quickly heading to the zero-cost-minimum. In the "old" days, you had 3 costs to overcome: headhunting, recording and marketing.

Headhunting was finding marketable artists to fit into whatever pop sound the labels had planned.

Recording was expensive in million dollar studios with mega-engineers.

Marketing was partially advertising, partially payola and partially touring costs.

Headhunting today is made easier with PureVolume and even MySpace (they even just released their own soundtrack this week). Recording is cheap. Marketing?

Old radio is dead. Stations can't get listeners (and advertisers) playing one music style. Everyone is changing to a mix of new and old pop along with indie. 40,000 fan concerts have become 20x 2,000 fan shows on the same weekend. Even megastars from 2 years ago are failing to draw a crowd (Gavin Rossdale of Bush drew only 40 people in Milwaukee two weeks ago).

The labels have to quickly grasp the reality of the free market. People will pay for safety, speed and quality. $1 is fair, $2 is pushing it. I'd think $2 per popular song single is fine but offering 4+ songs from an album for $4+ makes more sense.

At a certain price, a fan will see the value of safety and quality (versus thepiratebay) diminish quickly. My household spends $10,000 per year for music, but lately it is mostly shows. Our church mostly dumped our band and now invites various Christian rock bands to play (many of them are actually amazing). The market is completely crazy, and as Faith + 1 fans know, religious rock has always been a money maker, and even those bands are MP3-driven.

Demand is balanced by supply, quality and price. Download supplies are infinite. How do you remove supply from the equation? Increase quality. Increase features. Give buyers discounts to shows. Give buyers dibs on concert tickets. Give Buyers dibs on real band interviews.

Don't raise the price.

Re:Increase value, not price, for more profit

[Anonymous Coward]

Old radio is dead. Stations can't get listeners (and advertisers) playing one music style. Everyone is changing to a mix of new and old pop along with indie. 40,000 fan concerts have become 20x 2,000 fan shows on the same weekend. Even megastars from 2 years ago are failing to draw a crowd (Gavin Rossdale of Bush drew only 40 people in Milwaukee two weeks ago).
- Maybe because Bush (not the president, well him too), sucked? Bush's music was watered down grunge (trying to cash in on a trend in the early 90s), repetitive and boring.

The music industry is like Microsoft. Once they see a sub-genre that has become popular, they over do it, simplify it and hype it to death. Heavy Metal was popular in the early 80s, what did industry do? Overhype crap like Poison, Ratt and Cinderella. Rap met same fate. Public Enemy, Tribe Called Quest and De La Soul have been replaced or margninalized by overhyped garbage like 50 cents and the like. Grunge? Same thing. You have your Bush and various copies while real grunge pioneers are non existant today.

FFS, you have "superstars" produced on live TV thanks to American Idol. 99% of the music pushed out by major labels is nothing more than playing 1-2 riffs repeated ad nauseum with overhyped ad campaign. Every band pushed by big labels sounds like someone else. Every band is repetitive, unoriginal. Major labels no longer sell music, but image.

If you really want good music, there are plenty of small labels who have great bands. Small radios too.

Re:Increase value, not price, for more profit

[Anonymous Coward]

It's interesting that you bring up the christian rock bands. I've been in several bands and filled in on bass or guitar quite a few times in various bands. I've done about 30 christian gigs and I can tell you that almost every band I was with were not Christians...some were downright atheists. A couple were even devout Jews.

The thing is, there's good cash to be made from the christian circuit, but that's what they're out there for, for the cash and the experience...certainly not for "our lord".

Think about that next time at your church when a new band comes rolling through spouting christian ideals. lol

Re:Increase value, not price, for more profit

[BarryJacobsen]

Gavin Rossdale of Bush drew only 40 people in Milwaukee two weeks ago
---

Part of the problem is that the Wisconsin music scene tends to be rather lacking in general. Big name artists don't frequent us too much, and when they do (or anyone for that matter) they tend to not really advertise. Since we don't expect them to come here and they don't advertise when they actually DO, they tend to have low turnouts and then they don't plan on coming back. I can't count the number of times I found out a band I would like to see (but thought would never come to Madison) is playing a show on that night, but I can't go because I made other plans since they didn't advertise the show enough (or at all).

Re:Increase value, not price, for more profit

[MightyMartian]

All I have to say on the topic of Christian "rock" is that somebody should inform these people that having stanzas end with "Lord" and "Jesus" doesn't work. Actually, in general, the only lyrics I find more inane and just plain bad than Christian "rock" is your average cross-over Country artist like Shania "slide guitar makes it Country" Twain. What I do enjoy about Christian "rock" is that bad ads they have on TV where the audience looks like hypnotized Amway recruitees.

Re:Increase value, not price, for more profit

[Anonymous Coward]

*shrugs*

In the Bible, Jesus says not to worry about people who preach His name in hopes of material gains, because they are still doing good for Him: passing His message on to those who might not hear it otherwise.

Re:Increase value, not price, for more profit

[jBabel]

My household spends $10,000 per year for music

Wow! Is that a typo?! How do you do that?

Re:Increase value, not price, for more profit

[C0rinthian]

Somewhat OT but you still might be interested.

Check out a Madison local band called Phat Phunktion. They've got two albums up on iTunes as well. It's some good stuff if you like their style. (Jazz/funk/R+B)

Re:Increase value, not price, for more profit

[kabocox]

At a certain price, a fan will see the value of safety and quality (versus thepiratebay) diminish quickly. My household spends $10,000 per year for music, but lately it is mostly shows. Our church mostly dumped our band and now invites various Christian rock bands to play (many of them are actually amazing). The market is completely crazy, and as Faith + 1 fans know, religious rock has always been a money maker, and even those bands are MP3-driven.

Dude, if I could afforde $10,000 a year for music, I might actually buy some! My household just listens to the radio. We, um, tape off air radio for personal use... to listen to the same song more than once. We might spend $100-$200 year on DVDs, but $10,000 on music damn that's 1/3 of my income!

Re:Increase value, not price, for more profit

[symbolic]

It's funny - that's one of the very reasons I avoid it. Too many fakes who are in it for their own selfishness....that's not what it's about, even if is "spreading the word." That "word" comes in a pretty disgusting package.

Re:Increase value, not price, for more profit

[dkf]

Even megastars from 2 years ago are failing to draw a crowd (Gavin Rossdale of Bush drew only 40 people in Milwaukee two weeks ago).

Who? Nobody can be a megastar if I've not heard of them, OK? I know I don't put a lot of effort into tracking what's going on in the pop scene, but if someone's a real megastar that won't matter; I'll still have heard of them.

Re:Increase value, not price, for more profit

[Lehk228]

you nver heard of Bush? (the music not the president)

Re:Increase value, not price, for more profit

[nathanh]

People will pay for safety, speed and quality. $1 is fair,

Since when is $1 fair? I think $1 is simply what the market will bear, slightly above what the media monsters are charging Apple, and the price point that maximises (or at least comes close to maximising) Apple's profits.

Let's go back to the idea of "fair". I recently bought a stack of new music. I paid $12 average per album and there are 15 songs per album. These are Australian prices and over here iTunes is $1.69 per song. Crunching the numbers and using the iTunes $1.69/$1 as the comparison ratio, I paid 47 USA cents per song for non-DRM non-lossy CDDA quality audio with a jewel case, album cover, paper inserts and delivered on a pressed disc. By the way, the $12 average per album included delivery to my doorstep (I bought them online) and the delivery time was overnight.

Yet you think it's "fair" to pay $1 for a lossy version of the same song, with no physical media, while you pay for the bandwidth required to download it, not to mention the monthly payments to your Internet provider? Give me a break! It's a ripoff. $1 is far from fair. It's significantly overpriced compared to the old model of music distribution. Considering the lower overheads of online delivery it should be significantly cheaper than 47 USA cents per song. I'm not going to pay double that for the "privilege" of hearing only some songs off an album and avoiding 1 sleep.

Re:Increase value, not price, for more profit

[shawn(at)fsu]

Isn't Faith + 1 the name of Cartmans christian rock band?

Re:Increase value, not price, for more profit

[Anonymous Coward]

geezer

me neither, those names thrown around as megastars were like names yanked from the phonebook to me. I'm old skule rock, stones, led zep, hendrix, doors, ELO, moody blues, dead, tull, stooges, seeger, credence, kinks, queen, janis, various southern bands and yada yada, etc. long list yada. Boomer rock r00lz!

punks..music yaa-a-a-a rightee...roll ya up like a three day burrito ;)

/geezer

p.s. Caught the same crap from my dad, who was a "boogie woogie" git jammer... no understanding the lyrics = no listen to, that's my age of rock cutoff criteria. Oh ya, less tats and piercings and more quality playing might help. Priorities n stuff. Megastar status means at a minimum anyone knows the name, even if they hate the music or just don't bother to listen.

Re:Increase value, not price, for more profit

[dakirw]

I wonder if that includes the equipment to acquire and play that music...

Re:Increase value, not price, for more profit

[MooUK]

I think that ISP costs should be left out of the whole equation. I don't believe anybody would get an internet connection solely for ITMS, and hence that cost is paid either way. Especially since you ordered your CDs online; you've used the same connection there and hence paid for it anyway.

Re:Increase value, not price, for more profit

[Anonymous Coward]

In Australia almost all ISPs have download limits (your connection is capped at 64kbps after you hit the limit). So, including ISP costs is fair, since you are eating into your quota by downloading the music.

The download limits come from the days when traffic was ridiculously expensive to and from Australia due to infrastructure costs (and the fact that the US made us pay for traffic both ways), so the ISP passed the costs on. The infrastructure costs are much cheaper now, but most ISPs have kept their download limits.

Re:Increase value, not price, for more profit

[raoul666]

Yet you think it's "fair" to pay $1 for a lossy version of the same song, with no physical media, while you pay for the bandwidth required to download it, not to mention the monthly payments to your Internet provider?

Well, I do think a buck is fair, personally. Sure, if you buy an album with 15 songs it'll be cheaper, but it's a rare album that has 15 songs worth listening to. So for the ease of use and choice of what songs I get, I will pay a buck a song. As for lossy, I honestly can't tell the difference. I'd love to see you try in a double blind test. Also, counting the monthly payments for internet access is a mistake - that's a sunk cost - you're gonna pay that whether or not you download music, unless you're a very atypical /.er. And what exactly are you paying for bandwidth that makes the cost of downloading 10 megs expensive? I doubt very much it's more than a penny.

Re:Increase value, not price, for more profit

[timmyf2371]

Since when is $1 fair? I think $1 is simply what the market will bear, slightly above what the media monsters are charging Apple, and the price point that maximises (or at least comes close to maximising) Apple's profits.

It's a fair price if people will pay it. If potential customers don't want to pay it, they can vote with their feet and either purchase the CD or go without the song.

Let's go back to the idea of "fair". I recently bought a stack of new music. I paid $12 average per album and there are 15 songs per album. These are Australian prices and over here iTunes is $1.69 per song. Crunching the numbers and using the iTunes $1.69/$1 as the comparison ratio, I paid 47 USA cents per song for non-DRM non-lossy CDDA quality audio with a jewel case, album cover, paper inserts and delivered on a pressed disc. By the way, the $12 average per album included delivery to my doorstep (I bought them online) and the delivery time was overnight.

There's a big difference though, and it's often mentioned here; when I purchase a song via iTunes or any other online service, I'm not usually under any obligation to purchase the entire album.

Therefore, if on one of those $12 album, there were 3 songs I actually liked, I'd be paying an average of $4 per track rather than the $1 per track I would be paying if I purchased the tracks separately.

Re:Increase value, not price, for more profit

[Anonymous Coward]

And what exactly are you paying for bandwidth that makes the cost of downloading 10 megs expensive? I doubt very much it's more than a penny.

In Australia, business rates can be as much as 19c per megabyte. Residential varies from .25c per megabyte (a $50/20GB plan) up to 3c per megabyte (a $30/1GB plan). So your 10 megs could cost as much as 30c to a residential user. Once you hit the quota your download speed is capped to roughly modem speeds.

Re:Increase value, not price, for more profit

[WhiteBandit]

I love how a bored moderator went out of their way to mod you down. People throw around mod points like candy these days I guess.

Re:Increase value, not price, for more profit

[nathanh]

It's a fair price if people will pay it.

That's like saying Fox News is Fair because people watch it. Puhlease.

There's a big difference though, and it's often mentioned here; when I purchase a song via iTunes or any other online service, I'm not usually under any obligation to purchase the entire album.

Therefore, if on one of those $12 album, there were 3 songs I actually liked, I'd be paying an average of $4 per track rather than the $1 per track I would be paying if I purchased the tracks separately.

And I've already commented that I don't consider that to be a bonus. It seems to be a Slashdot meme; repeating back at somebody an argument that they've already said they disagree with. Are you whoring for karma points?

I think it's a foolish argument - paying for the privilege of hearing part of an album. It's like reading the first chapter of a book or watching the first scene of a movie. If you're so lukewarm to an artist that you only want to hear a single song off their album, then it's hardly worth getting even that one song.

Re:Increase value, not price, for more profit

[Anonymous Coward]

Silly Australian, the internet is for American kids!

Re:Increase value, not price, for more profit

[ZachPruckowski]

I think it's a foolish argument - paying for the privilege of hearing part of an album. It's like reading the first chapter of a book or watching the first scene of a movie. If you're so lukewarm to an artist that you only want to hear a single song off their album, then it's hardly worth getting even that one song.

And your personal choice appears to be a minority one (which does not make it wrong). I'd be hard pressed to find the cheap CD deal you seem to have, and being in the US, I don't have the exchange rate issue. I just sorted my iPod's library, and the most I have from any one album (and when I get a song, I listen to all the songs on the album, or at least part of them) is 5. While this isn't a music taste discussion, I would say that the albums (two, each with 5 songs) are from far and away my favorite band, and I like at most 5 songs on any one CD. So the pricing for me works out to $4.96 for the 5 songs, or $12-15 for the album. It is worth it even if I later decide I want to download every song off the album because that would happen with one out of every 20-30 albums, if that.

Re:Increase value, not price, for more profit

[Anonymous Coward]

If you're so lukewarm to an artist that you only want to hear a single song off their album, then it's hardly worth getting even that one song.

Are you serious? I mean, you wanna maybe re-read what you just wrote? Because that makes no sense at all. Are you really saying that if I like a song by a one-hit wonder, I have to want to buy every piece of crap they ever put out or else I don't really like that one song enough to buy it? Because that's just dumb.

Re:Increase value, not price, for more profit

[nathanh]

Are you really saying that if I like a song by a one-hit wonder, ... I don't really like that one song enough to buy it?

I'm saying you'd be better off spending your money on artists that you do like, rather than one-hit wonders that put out "crap" (your own words).

Re:Increase value, not price, for more profit

[Slashdiddly]

It's a fair price if people will pay it.

Huh? That would be true if this was a free market built around a commodity product. However, the copyright law ensures that this is not the case. If you put people in a room, pump the air out and then be the only one to sell them canisters at $100 a cu ft, I bet they'd pay too.

Re:Increase value, not price, for more profit

[Anonymous Coward]

Per year??? Every year???

Re:Increase value, not price, for more profit

[Burz]

Must... Not... Let... Non... Christian... Thoughts... Enter... Head! AARGH!!!

That's what Christian Rock says to me: Ideological Purity.

There are so many mainstream artists who sing Christian themes (when its appropriate, or if fits well to make a good song), perhaps even most artists. Do the 'unsaved' reject them for it? No. Do 'Christian Rock' devotees consider them to be Christian-enough? No, because they don't pass the purity test.

Re:Increase value, not price, for more profit

[2nd Post!]

What's wrong with buying only one song?

$1 for one song certainly seems like a much better deal than $12 for one song. I've purchased 'singles' before when I only wanted 2 or 3 songs; $12 for an entire album or $5 for 3 songs, and in the end $5 is still cheaper than $12.

Who cares?

[Anonymous Coward]

They could charge 99 cents or 5 bucks for the latest pop trash single and it would still be the number one daily download. We all know that most real musicians make their money through secondary means like touring. All I hope is that this "tiered" pricing means that back-catalog music will be priced at something nice like 50 cents a song.

Re:Who cares?

[MrDiablerie]

That's only partially true. Big name artists make money via touring, mid-level artists usually can break even and new groups/unknowns usually LOSE money touring. Getting out on the road is a lot more expensive than it used to be with the cost of gas skyrocketing and venues taking cuts from the merch. Also, if you are a smaller sized or indie band, the manufacturing cost per CD has doubled the past year due to rises costs of oil (CD plastic comes from oil) and the fact that the majors are not doing as many small production runs now as they are taking less chances on developing small artists and spending more money on the bigger acts. The majors spending less money on manufacturing means the plant has to charge more for everyone else's small runs. Added to this, the value of the dollar has dropped significantly and most CD manufacturing nowadays is done in Canada. Sorry to go off tangent there but it comes down to, it's hard for bands to make any money on the road unless they are already Madonna/Shitney Spears sized.

A little too contrived I think...

[sapgau]

I thought artists were already being screwed by the record companies. It will be in the best interest of the record labels to raise the price for the most popular songs no matter how badly they want to punish a particular artist.

/Meh

Re:A little too contrived I think...

[RingDev]

Low sales and low air time = low demand. Artists make their money touring, and if they have limited sales and air time, they'll have a hell of a time getting their name known and raising concert attendance.

-Rick

Doesn't the music industry get it yet?

[8127972]

The old school practices of bullying artists, acting like a they're the only game in town, and thinking they rule the universe is over. The more they try to do things like this, the more we'll run to P2P, and everybody loses (except me who gets my music for free).

Re:Doesn't the music industry get it yet?

[antiMStroll]

Of course they get it. They're trying to preserve the old way by means of federal legislation and jail terms. It's astonishing we let them.

Re:Doesn't the music industry get it yet?

[Anonymous Coward]

The old school practices of bullying artists, acting like a they're the only game in town, and thinking they rule the universe is over.
 
Just wait 'till you start seeing artists ditch their label and sign with Apple.

Re:Doesn't the music industry get it yet?

[C0rinthian]

Apple records might have something to say about that...

Leverage?

[-kertrats-]

The way this is written, it makes it sound as if the artists have leverage. It was my understanding the record industry is already pretty much a "do what we say or get out" business, judging from Switchfoot's DRM issue. Also, why will a $.99 song be worthless? People are going to buy it more if it's cheaper, not less. What strange rules of economics are they suggesting that more expensive items are more appealing for the same quality? I believe even the most herd-like group I've ever encountered (mainstream music listeners) have announced with the popularity of p2p that they're willing to set their own price on music.

Re:Leverage?

[Chirs]

People (at least some of them) want to think that they're getting something of worth. If something costs less, then it it must be inferior somehow.

Open-source software is changing this way of thinking somewhat, but the sentiment is still there.

Re:Leverage?

[GungaDan]

Strange rules of economics... like the ones thay say if you put a certain name on a label on your clothing, people will pay twice as much for it. This is also applicable in the realm of /., where people will pay a premium for things like low-latency memory even if it has no discernable impact on the performance of a machine. Do not forget that the target market for the music industry is one in which perceived "cool factor" outweighs rational purchase decisions frequently.

Re:Leverage?

[ShibaInu]

I think this is what most people miss about music - especially new music. The consumers of new "cool" music don't really care if it is priced at $0.99 or $4.99, they are consuming it to be cool. People spend hundred of dollars on jeans, just because they are cool, they'll spend a few extra bucks to buy the next big song.

Re:Leverage?

[Anonymous Coward]

Or: The artists themselves get x% of every sale, with wich they have to pay back the record company because most of the costs to produce an album is recoupable. So they have to sell 2.5 times as much if their songs are sold for 0.99 than when they start at 2.49.

With crappy songs that the "c00l" kids will buy at any price and everybody else don't want for free, I can see what the fuzz is all about.

So I think the article means something like "If the artists don't play it the RIAA's way, the artists will have to work much harder to pay their debt to the RIAA".

How the RIAA holds artists hostage:
http://archive.salon.com/tech/feature/2000/06/14/l ove/print.html
http://www.negativland.com/albini.html

Re:Leverage?

[shmlco]

"People are going to buy it more if it's cheaper..."

Correction: Some people (fans, etc.) will buy it at almost any price. So the question is, will you sell enough additional units at a lower price to make up the difference if you start off by selling it on the cheap?

Or can you sell it high at first, and then lower the price and still collect the difference in numbers? (In which case you've increased income, as the initial buyers have paid more.)

Third, by the time you factor in demographics, music likes/dislikes, and so on, the market for a given work is finite. (Some people never buy music, never buy country or rap, etc.) So you can reach a point where lowering the price will not generate an appreciable increase in numbers, because there's no one available or interested in buying it.

So all the "one cheap price for all" model effectively does is lose money.

So your comment, while "common" knowledge, is in fact incorrect.

Re:Leverage?

[AnObfuscator]

People (at least some of them) want to think that they're getting something of worth. If something costs less, then it it must be inferior somehow. Really? I keep seeing this claim spread as fact. It doesn't make sense. If cheap == bad, then how does WalMart stay in business, hmmm?

I suspect this will backlash against RIAA in a way they didn't expect. People, formerly willing to spend $1 on a track are unwilling to spend $2.50, and start rummaging around the "bargin bin" of 50, 60, 70 cent tracks, and find a great deal of off-label, quality music that the industry didn't think useful to cram down our throats.

Of course, people are still stupid, and still like to be told what music they need to like to be cool. So, maybe not.

Another Doomed Big Brother Ploy

[Ted Holmes]

The end of this "Big Brother" attitude from controlled media is written upon the wall (but not in the papers). The digitally connected masses will soon remove the mass from media. Here's why:

1. The balance of power has already shifted to the masses in a sort of first mover advantage. The backlash coming from the entertainment industry is reflexive. It happens *after* networked mobs creatively, unexpectedly, disruptively take technology into their own hands. The tension between the entertainment industry and the online world simply represents that shift of power and control away from mass media.

2. What will the entertainment industry be when consumers en masse, produce their own "as good or better than" diversions? Blogs spontaneously exploded news into millions of niches, leaching the mass from news media. Cheap high tech multimedia production tools wielded by thousands of grass roots reporters are absolutely capable of producing high quality fare.

The mass entertainment and news industry will soon compete with high quality virtually free grass roots alternatives from the digitally connected masses, and take its rightful place as another niche. What "mass" will be left to market to?

3. Litigation takes a lot of time. Since technological advances also accelerate events, inflexible, knee jerk systems will eventually be overwhelmed with the speed of disruption. There will soon not be enough time to react before the next volley. Future shock paralyses the most inflexible systems first. So, ultimately, in a digitally networked world, control is distributed to the masses. But the question keeps returning:
Is Big Brother a Possible Future?Will some central organization, representing narrow interests be able to control what citizens share electronically? I don't think so. The imminent emergence of open source personal self-replicating fabricators will spit out an ever growing complexity of items, all of which will be embedded with personalized computational intelligence. So, no consistent control over hardware standards will be possible. Chips will not answer to a centralized institution.

As self-replicating fabricators rapidly spread to thousands and then millions of people, they will mutate and evolve; enlisted to upgrade and propagate their own next generation. Mobjects from the collective creative energy of Smart Mobs. This spells the end of the consumer/ producer divide. What will mass marketing be without a mass market?

Re:Another Doomed Big Brother Ploy

[croddy]

It's so cute when bloggers try to form coherent thoughts.

Re:Another Doomed Big Brother Ploy

[pipingguy]

Begin the day with a friendly voice
A companion unobtrusive
Plays the song that's so elusive
And the magic music makes your morning mood

Off on your way, hit the open road
There is magic at your fingers
For the Spirit ever lingers
Undemanding contact in your happy solitude

Invisible airwaves crackle with life
Bright antennae bristle with the energy
Emotional feedback on timeless wavelength
Bearing a gift beyond price, almost free

All this machinery making modern music
Can still be open hearted
Not so coldly charted
It's really just a question of your honesty, yeah Your honesty
One likes to believe in the freedom of music
But glittering prizes and endless compromises
Shatter the illusion of integrity

For the words of the profits were written on the studio wall
Concert hall
And echoes with the sounds of salesmen

Veblen effect?

[tepples]

The whole argument here seems to be that major label singles are a Veblen good. Wikipedia has information on Veblen goods.

Re:Veblen effect?

[Orrin Bloquy]

I thought "Harajuku Girl" was a doubleplusungood, myself.

Re:Veblen effect?

[Anonymous Coward]

No. It's just good ol' fasioned branding. Through branding, a firm can make its demand curve increasingly price inelastic. After this, they can charge a higher price without sacrificing many sales

Put simply, you buy it because OMFG!!11!!!ONE!1! UR BST FRIEND JEENNNY BOUGHT THIS WWWWAAESOME SNGG, not because it's expensive.

Or consider the economics

[mrtroy]

Lets set aside the "its so they can r00t j00" for one second.

Perhaps its due to the fact you can maximize profits by having your price vs demand combination maximized...

If 10 users will buy Achey Breaky Heart at 0.99, and 50 users will buy it at 0.50, it is much more profitable to sell it at 0.50.
So, this is an obvious reason behind flexible pricing.

Re:Or consider the economics

[ZackSchil]

I much prefer the current setup, by which the 99 price point is kept and every person who downloads Achy Breaky Heart has their IP logged so they can be tracked down and murdered for the betterment of humanity.

Re:Or consider the economics

[garcia]

Perhaps its due to the fact you can maximize profits by having your price vs demand combination maximized...

No, it's because downloaded music can have the price set by the backend and it can respond automatically to trends. Why the hell wouldn't they start jacking the price on a single that for whatever reason got popular overnight (i.e. Kayne West after his public display of moronacy).

If they have everything set to a 99 cent pricepoint they can't gouge their buyers like they can if they have a "flexible" pricepoint.

You were right about it having to do with economics though.

Re:Or consider the economics

[ronjeremysjohnson]

The plan probably goes more like: Its better to have 40 people pay 1.50 then have 50 people pay 1.00.

Re:Or consider the economics

[42Penguins]

Who are these idiots who actually PAY for achey breaky heart?

I have a bridge to the future to sell them...

Re:Or consider the economics

[TurboStar]

"If 10 users will buy Achey Breaky Heart at 0.99, and 50 users will buy it at 0.50, it is much more profitable to sell it at 0.50."

Your basic idea is correct but you seem to have gross revenue and profit confused.

-david

Re:Or consider the economics

[Tony Hoyle]

Cue the old graph you learn in economics.. as price decreases profit increases, but demand falls, affecting revenue. The trick is hitting the crossover point where you're maximising both.

Of course it's not *quite* so easy as the graphs make out (eg. spend $2million on an advertising campaign, demand increases, so you can get away with charging more, which pays for the advertising campaign (plus a bit)).

Re:Or consider the economics

[Carewolf]

You will be surprised at how many are willing to pay a dollar to piss you off!

I've never used iTunes, but...

[Anonymous Coward]

Can artists put their own music on iTunes and skip the record labels altogether? It seems to me, if they could do that, then they wouldn't have to mess with 'Big Content'.

Re:I've never used iTunes, but...

[crashcodesdotcom]

My proxy server is acting funny, so I don't know if this is the right one www.norecordlabel.com, but there are sites for artists that are tired of being pushed around by record labels.

Re:I've never used iTunes, but...

[shawb]

No, you have to be signed as Itunes deals with the label rather than the artist. But apparently places like cdbaby.com are good enough to be considered publishers. BTW I'd suggest cdbaby for anyone trying to find independant music. They actually have some pretty good bands, most of which you can sample some or all of their music before buying. Then again, one might be able to say that cdbaby is a way to not have to mess with big content, but I don't know anyone that's tried to get their stuff on there, so who knows if they're draconian or not.

Re:I've never used iTunes, but...

[mattsucks]

CDBaby is really easy to work with, IMHO. They sell both physical CDs (which you ship to them, they warehouse and fulfill orders for) AND make your music available to most of the online digital services. You get paid both ways.

Yes, they take a chunk off the top of each sale ($4) and each digital download (9% of what they get from the digital vendor). There is also a fee to set a new recording up in their system ($35).

There are similar sites to CDBaby that charge a bit more or a bit less, take a bigger or smaller % of the proceeds, but personally I have found them easy to deal with, helpful if you have questions, and you can actually email or call a Real Person (tm) if you want.

Re:I've never used iTunes, but...

[BlueStrat]

"Can artists put their own music on iTunes and skip the record labels altogether? It seems to me, if they could do that, then they wouldn't have to mess with 'Big Content'."

Yes, they can. There is CDBaby http://www.cdbaby.com/ which does submit indie artists to iTunes. They do filter for "quality" though.

They don't just turn artists down with no explanation. They do critiques which, from the ones I've read, are pretty fair. The critiques generally have to do with either poor quality of the recording/mixing itself, or skill at the art such as someone who does a recording, but just isn't a very good musician/singer. like sour chords/notes, poor song writing structurals, etc. I'm in a blues band (lead guitarist) and we've been considering submitting our CD(s) to CDBaby.

I'm the tech-knowledgeable one in the group, and it's taking some time and effort to convince the other band members to take new avenues of distribution seriously. The first part of the resistance is the common one of general computer fear and ignorance that is familiar to us all on slashdot whenever we try to talk to a non-tech type person about anything to do with computers. The other is, once the idea of indie distributors/promoters like CDBaby is grasped, the next reaction is "I dunno if we should 'waste our time' with that, because it'll get shut down just like Napster..."they" (music/content industry) won't allow something like that to ruin their profits...are you *sure* it's even legal?".

It's sad and quite scary to me how widely the "if it's not from the labels, it's likely illegal or will be soon" meme has spread even among artists and musicians.

Just my $0.02

Strat

big content

[TheClam]

Damn those Big Content bastards and their lust for power and money.

Good call on the phrase 'Big Content.' Who coined that one?

Sick

[Chickenofbristol55]

Seriously, even reading about this for 30 seconds made me sick to my stomach. It's not really a suprise to me that the record excects would plan for this sort of douchiness; however, but it was still revealing for me. Rise up inde musicians, rise up!

So if it costs less... people will not buy it?!

[DaedalusLogic]

That is the worst theory I have ever heard... Give the majority of humankind a little more credit. If something good costs less, we will still buy it, and be very happy about the whole transaction.

I agree with other posts... it's just about getting more for the flavor of the month.

Re:So if it costs less... people will not buy it?!

[jjohnson]

Of course people are happy getting the same thing for less money. That's not the point of the article. It's that for those artists/songs you don't know, your perception of them is influenced by whether they're in the "star" club at $2.49 a song, or the bargain bin at $0.99. It may not be a huge influence on you individually, but in terms of the overall market, it's a huge club to hold over the head of an artist. It's about overall mindshare, not individual purchases.

Re:So if it costs less... people will not buy it?!

[ephex]

no no, you don't quite understand how it works. take your average teen. analyze their characteristics. what do you find? a self esteem largely dependent on what they perceive others to think of them, and usually they will be followers. their desire to be 'cool' leads them to almost want to be told what to listen to.

this leads me to my point: kids are going to be looking at songs to buy, think song x sounds pretty good. but wait... it's only $.99, when this other song y that's popular is $1.99. clearly there is a reason it's not priced as high, and this can lead to the assumption that song x is not as desirable as song y,and then their desire to be cool and fit in will kick in. now their view of the song is changed, negatively, purely for psychosocial reasons.

Re:So if it costs less... people will not buy it?!

[uberdave]

True up to a point. Items have a perceived value. If the cost of an item is below what it "should" cost, it becomes suspect. Take the $50 Rolex, the boxed set of Lord of the Rings DVDs for $5, for example. When the price is too low, people will ask themselves "What's wrong with it?", and "Why is it so cheap?". People will often pay the higher price because they want some assurance of receiving quality merchandise, even if there is none. How else could Kelloggs can sell Rice Krispies for 50% more than the no-name Crispy-Rice cereal.

Re:So if it costs less... people will not buy it?!

[nine-times]

If you think this is an insult to mankind, then you give mankind too much credit. The fact is, when something is inexpensive, people tend to automatically think it's cheap. Let's say you walk into a store, and someone has set out three pairs of shoes. One pair is $100, one is $70, and the third pair is $10. The look almost identical. You know what? Even if people can't really tell the difference, they'll assume the first pair is the best, and the third pair is going to fall apart within a month.

It's not so dumb if you think about it, in that if something is outside of what we expected, we assume there's something wrong. We don't expect a good pair of shoes to cost $10. If you were running a shoe company, and you could sell your shoes for $10 and still be profitable, you still won't want to-- and not just because you can increase you margins, but selling inexpensive shoes will actually hurt your sales. It's a well-documented phenomenon. Sometimes companies won't sell products for cheaper than a set price as to avoid the label of being "cheap".

Likewise with other things. If I go out to buy a PS2 game, and there's some game that I've heard nothing about and it goes straight to the bargain-bin, I'll probably assume it's not that great. I can tell you from experience that some great games go straight to the bargain-bin, but I'll still assume it. It's only natural, because in most cases, good games come out at ~$50.

Re:So if it costs less... people will not buy it?!

[jasontheking]

Prevous slashdot stories have detailed the things that you find in recording contracts these days. One of those things was how the recording companies give artists an advance , which they have to pay off first , before they see any cash themselves.

Threatening to lowering the price on songs by popular artists may be a way to keep them in line, and in servitude.

Re:So if it costs less... people will not buy it?!

[RustyTaco]

I have to agree, as Walmart and NewEgg have shown people while buy any poorly made peice of crap ass long as it's cheap. The desire to pay a premium is largly not there.

    - RustyTaco

Re:So if it costs less... people will not buy it?!

[smellsofbikes]

Go makeup shopping with your girlfriend some time, and then tell me that people don't automatically value high-price items over low-price with no consideration of 'goodness', whatever that is. Perception is part of the price.

Or take a look at people who spend $20 on Old Navy t-shirts, when they can buy the *same* shirt (as in, made by same company with same fabric) for $8.

Malcolm Gladwell has written about this (particularly the t-shirt thing) and about how in an era of mass-produced items, when the cost of production approaches zero the driving determinant in cost may become its perceived value by others: conspicuous consumption.

Re:So if it costs less... people will not buy it?!

[vux984]

Right. So they'll buy the 1.99 song and be 'cool'.

On the other hand if the song cost .99, they'd still have another dollar burning a hole in their pocket and could have bought another one.

Kids, for all their disposable income, aren't exactly rich... you double the price of songs they'll just buy half as many.

Its actually worse than that, kids who found they could afford to get pretty much all that they really wanted @ .99 per song, will now find that they can only get half of what they want, decide that's not enough and fire up the p2p software again... and at that point they will have little incentive to purchase even the half that they could afford.

Re:So if it costs less... people will not buy it?!

[krunk4ever]

I recall some other post on /. regarding selling software that competed against Photoshop. They had priced the software originally at $50, but very few bothered to try it because in their minds they were thinking how could a $50 software compare against a $400-500 software?

However, after a bit of market studying, they raised their prices to $100, and then people all over the industry that have been using Photoshop decided to give it a try. The price you set for your software tells the consumer the quality they should expect, though it doesn't really speak much for the software itself. I recalled the poster saying that many who tried it really liked it and even swapped over from Photoshop. The funny thing was if you purchased it at $100, there was a $50 rebate, which basically reduced it to the same $50 price level that they had before.

Bargain/Cheap products have a negative connotation in the minds of consumers. It means its the stuff that nobody wants, the left overs, the low quality version of the higher priced items. I'm not saying this is true for everyone. I'm a bargain-hunter myself, but if I see a motherboard sold everywhere for $20, I'm going to have doubts about the quality and not bother even trying. However, if this motherboard sells everywhere for $70, but at a legit site they have a sale on it for $20, then that's a bargain. The motherboard itself could've been the same in both cases.

Re:So if it costs less... people will not buy it?!

[trimsyndicate]

What I think we're all missing here as that raising the price of a single song makes purchasing the album more attractive. It's simple. If 1 song costs $2.49 and an album (around 10-12 songs) costs $9.99, I as a consumer am going to feel that buying the album is the "better deal" than the single track. The problem with iTunes for the labels is that there isn't much of an incentive to buy the higher priced item (the album) when all you want is 2 or 3 songs and you can get them for $.99 each. Make those 2 or 3 songs $2.49 each, and buying the album becomes much more attractive to the consumer.

Re:So if it costs less... people will not buy it?!

[Puff Daddy]

You're at least 30, aren't you?

Re:So if it costs less... people will not buy it?!

[ephex]

sorry, i'm 17 :P

Re:So if it costs less... people will not buy it?!

[lachlan76]

Your average teen will just download it from P2P for nothing, rendering this whole argument invalid.

Re:So if it costs less... people will not buy it?!

[ZachPruckowski]

I'm 18, and I've noticed this at high school. I thought it was stupid, but I still noticed it. Think of the whole fashion thing. Essentially, the difference between preppy American Eagle or Abercrombie or whatever and my clothes is basically zero. But AE or A&F are more expensive, and are advertised as cooler. I can see the $2.49 section coming right to the front of iTunes or something, or being the only ones mentioned in "new releases" or whatever. And I can totally see the radio or MTV or whichever source of music controlled by the RIAA being forced to play primarily the $2.49 list. When I look at the "hot list" played at radio stations near where I went to HS, and I look at my iPod, most of the "hot list" songs are on the iPod. There are a lot of other songs on my iPod, as well, I'll grant you, but I'd say that the primary source of hearing new music is probably the radio, since it plays in the car, and you can just turn it on.

how about

[GoatPigSheep]

People stop buying commercial music and only buy from indie labels who don't manipulate their artists and the prices of their wares. My musical tastes make this a lot easier (I am into mostly electronic music), but I encourage everyone to avoid funding the major labels who want to control the artists and take away rights from the public.

Of course they will probably blame the drop in sales on 'piracy'.

It's obvious major labels have NO respect for the public and NO respect for their artists. Avoid them. They make most of the money that you spend on CDs, not the artists. If you buy from these labels, you are basically supporting and funding their unethical practices.

dead

[Eesu]

Music labels just need to go ahead and die, first they rip off the customers, now they are ripping off the musicians. I can understand greed but what they have been doing, are doing and are trying to do is way beyond greed.

Re:dead

[Itchyeyes]

I think you've got it backwards. They've been ripping off the musicians since the early days, then they ripped off the customers, now they're going back to the musicians one more time just in case they didn't strip them of everything had the first time around.

Re:dead

[Eesu]

perhaps, but all that really matters is the companies just need to die

I couldn't agree more.

[Anonymous Coward]

So what if the single is sold for $0.99? That doesn't change my opinion of it. If I hear it and like it, I'm going to get it. Releasing it for less gives me MORE value. This is just retarded. Consumers almost always go for the best bang for their buck. The reality is that very few new releases and popular songs will debut at $0.99. The RIAA is out to make as much money as possible. This article is reaching for a conspiracy that just isn't there.

Re:I couldn't agree more.

[IANAAC]

If I hear it and like it, I'm going to get it.

The point is you're less likely to hear it if it's in a lower price bracket. Lower price brackets won't get the same amount of exposure as higher priced songs get. That means you will probably not hear it on the radio, MTV, whatever.

Is it conspiracy theory? Yeah, probably. But most definitely believable.

Re:I couldn't agree more.

[Agarax]

Its posts like this that make me cry for all the ACs that should log in.

Re:I couldn't agree more.

[brouski]

What does the pricing on iTunes have to do with MTV?

Re:I couldn't agree more.

[utnow]

It's just the concept that higher priced 'stuff' tends to get more press and/or public envy. A song that is generating ALOT of money (higher pricepoint) will be promoted more (on the likes of MTV) than a .99 song that isn't bringing in as much. Simple economics.

A while back a friend of mine was telling me about a particular purse that she was trying to sell in her store... $10.00 for a rather plain purse... they stayed on the shelves for months. Finally she instructed one of her employees to mark them down to $7.00. Apparently there was a misscommunication and the purses were marked UP to $70.00. They flew off the shelves. She sold em all within 2 weeks. Price playes a HUGE part in public perception of value.

Re:I couldn't agree more.

[Iriel]

That kind of idea is opperating on the foundation of victims of MTV marketing with no clue to anything outside of the mainstream. On the other hand, a lot of legal download services and even internet radio stations work on the 'long tail' method of getting word around. So even though some artist gets knocked into the .99 cent bin for not allowing Sony to rootkit their CD, if they still get mention on the "people who downloaded $foo also listened to..." lists, there is still a healthy chance of survival despite lack of exposure.

Another idea to consider is how many of the cheaper songs will be targeted by listeners more to save some money only to find out that the artist is really good. As a final argument, how likely do you find it that Apple may just advertise the artists under-exposed by the labels just give the execs a subtle slap in the face?

Re:I couldn't agree more.

[BushCheney08]

Actually, I can think of one example that flies right in the face of this. Interpol's first CD was released at the whopping $10 price point (and was initially on sale many places for as low as 7 bucks). It was a pretty strong album (not quite my cup of tea, but that's besides the point). The exposure that they got from that album and it's related pricing certainly helped them out a fair bit...

Re:I couldn't agree more.

[Anonymous Coward]

What does the pricing on iTunes have to do with MTV?

More money per song == Worth spending more on promotion.

An musician's income is directly tied to how well they sell, and it's on a dramatic curve.

Bad selling albums == debt
Good selling success == no money
"Hit" albums == almsot no money
#1 albums == GREAT BIG TRUCKLOADS OF CASH

Talent and word of mouth, along with a "hook" to get core fans to obsess over you (perhaps they like your politics, or how you look, or the way your songs piss off their parents... maybe even all three) just might get you into the stratosphere of music for profit, but most acts, even the ones with a lot of appeal to music buyers, can't get there without the label pimping them like crazy.

The labels will work harder for the artists they can charge more for.

Make sense now?

Re:I couldn't agree more.

[cens0r]

Interpol is a bad example because they are on an indie label. The people looking at records from Matador are generally in it for the music and don't care much about record label promotion.

Re:I couldn't agree more.

[Anonymous Coward]

Well clearly you are not in touch with the significant spending masses the executives are targeting. Congratulations, you are smarter than them. But you better believe that a higher price carries the associaton of better quality in many cases. And that young consumers are very often compelled to conform with their perception of popularity. I think the executives should burn in hell for their greediness because this plan would work all too well.

Re:I couldn't agree more.

[IANAAC]

if they still get mention on the "people who downloaded $foo also listened to..." lists, there is still a healthy chance of survival despite lack of exposure.

I think in the long run, this is how it will be. I think marketing will shift from the actual artists to download communities, where the word will be spread amongst its members about which artist is good/worth the money. But that's not how it's done now.

It only takes having a teenager in the house to realize that marketing is King. They buy what they see on TV. And their opinions are formed by what they see on TV, no matter how much they tell you they know everything (and, again, if you have a teenager in the house, you'll constantly hear how little you know and how much they know :-))

Re:I couldn't agree more.

[Lehk228]

a purse for $7 seems like there is something wrong with it. a purse for $70 is a bargain because it is under $100

Re:I couldn't agree more.

[jacksonj04]

I disagree. If it's a major song but the execs want to release it into the $0.99 bracket, why should iTMS not promote it on the music store as much as anything else? It's still a profit, and if it's a good song then surely it will sell more at the lower price.

Re:I couldn't agree more.

[Mark_in_Brazil]

Apparently there was a misscommunication and the purses were marked UP to $70.00. They flew off the shelves. She sold em all within 2 weeks. Price playes a HUGE part in public perception of value.

It depends. But it's true that if there's an established price range for a given subcategory of products and your product is priced well below it, the product will be perceived as inferior even if it's an adequate replacement for other products in the subcategory.
The most famous example of this effect is in the pricing of store brand products at supermarket chains. Often the products are made by the same manufacturer as the brand-name products, and even when they are not, they are very often of equivalent quality. If the price of the store brand is above the price of the brand-name product, equal in price, or below but too close to the price of the brand-name product, it won't sell well. People will just buy the branded product they know, since the price difference is negligible (or negative!).
However, the store brand product price can't be too far below that of the famous brand product, or it will be perceived as being inferior and people will buy the product whose quality they know and trust. There is a "sweet spot" in the pricing of store brand products where sales of the store brand (and therefore the store's margin for that subcategory, because the store's margin on the store brand is usually larger than its margin on the name brand product) are maximized, because the price difference between the known name brand product and the equivalent store brand product is large enough to attract the customer, but not so large that it makes the customer suspect the product is not equivalent at all.
The problem of how to price store brand products is one of many solved by "retail revenue management" and price optimization software packages offered by companies like KhiMetrics.
Another great example is the story of the father of one of my roommates from grad school. My roommate's father was a tailor. He sold shirts from manufacturers with famous names in his shop, but he also made shirts. He started out by doing "cost-plus" pricing. He took his material and labor costs, added on a margin, and that was the price he put on his shirts. The price came out well under half the price of the famous brand name shirts, despite the fact that they were of at least equal, and probably greater, quality. They hardly sold at all. Then he tried an experiment (and I don't know where he got the idea). He set the prices of his shirts so they would be 15-25% lower than the prices of the shirts from the well-known manufacturers. The shirts sold so well he couldn't keep up with the demand. He couldn't keep them on the shelves. People were excited about getting good shirts for 20% less than the price they were used to paying, because that was enough of a discount to be interesting, but not so much that it would make them suspect the shirts were crappy.
Now I'm not so sure this will work with music files, because there's a key difference: Store brand spaghetti sauce made by the same manufacturer as the national brand really is an adequate replacement for the national brand. My ex-roommate's father's shirts really were an adequate replacement for the shirts with the well-known brand names.
Songs are much more individual than shirts or spaghetti sauce in a jar or a box of spaghetti, so it seems to me that one song may not be an adequate replacement for another. I would not expect exactly the same rules to apply. I guess the term that applies here is that songs are not quite commodity items. Heck, even among artists I like enough to have their music in my home, if I feel like listening to a specific artist, I don't think others even from the same genre would necessarily be acceptable replacements.

Re:I couldn't agree more.

[blackmagic1982]

Actually, the current generation tend to watch damatically less tv then previously. Video games and just simple blog surfing have definately found their niche. And in marketing to teens, use of internet buzz, happenings and other tactics is gaining more and more steam. I think many truely undersestimate how savy our current generation could be. What are the effects of an entire generation of people that are growing up in a society where everyone can talk to everyone everywhere at any time. I think it is nothing less then evolotion of the mind.

Re:I couldn't agree more.

[duffbeer703]

Nonsense. People buy with the "bronze", "silver", "gold" mentality. If you take a selection of similar CDs, say the latest rap hits and price one artist at $0.99, one at $1.99 and another at $2.99, people will flock to the expensive one.

In general, people don't say "$2.99 for one song is a ripoff". They say "Why is that song worth $3?". Then they buy it to find out.

Go to any car dealership to see how this works. People who buy Buicks often stop in to look at the latest Caddy. Others come to sit in a nice Acura and settle for a nice Accord instead. Not everyone does this, but enough do that its a profitable technique.

Re:I couldn't agree more.

[rpj1288]

TV contains nothing for me. The marketing I see only serves to annoy me. And I'm a teenager, and I know my friends agree. So what about this group, which gets their music almost exclusively online? How do we fit into companies' marketing sceme?

Re:I couldn't agree more.

[mrchaotica]

Hmm... I guess maybe this explains why Hyundai isn't popular, even though they make better cars than Toyota.

Re:I couldn't agree more.

[Anonymous Coward]

Bah. If it's not playing at your local bar or coffeehouse house or club, friggin' don't buy the CD. The entire music industry can go to hell.

Re:I couldn't agree more.

[lendude]

That example above is pretty much an exact paraphrasing of the one used in the seminal tome on persuasion psychology: "Influence: The Psychology of Persuasion" by Robert B. Cialdini, albeit Cialdini's original illustration is based on turquoise jewelry pieces. Chapter one, page one no less - (Amazon reader URL below)

http://www.amazon.com/gp/reader/0688128165/ref=sib _fs_top/102-2348296-1264964?_encoding=UTF8&p=S00G& checkSum=qdscB2w4LZyZ%2FGv8UPVCooYDVgcxIM%2BKl%2FX owFBapUM%3D#reader-page

Re:I couldn't agree more.

[dswan69]

Children should be educated from birth to view advertising as a parasite. When we were teenagers we had immense fun deconstructing and making fun of adverts in all media. Then again I had parents who taught us to be critical thinkers, especially where corporations or government was involved.

Re:I couldn't agree more.

[dswan69]

Another difference is that there is no shortage of music. In fact there is a massive oversupply. Particularly in the pop sphere, the stuff the labels push the most, the artists are a dime a dozen (actually if you're paying a dime you've been overcharged). When it comes to real musicians there is more variety even though they could all be considered to fall within some arbitrarily determined 'genre'. Even so much of this music is similar enough that it is semi-interchangeable. Girl/boy bands and similar pop trash are litereally 100% interchangeable. These types do have the occasional fun track, something that can be listened to for a short while before it gets boring and is never played again - being disposable I'd pay 5c, no more than 10c, per track. For real music I'd be willing to go as high as 50c a track, but that is pretty much my outside limit.

Re:I couldn't agree more.

[Halfbaked Plan]

Okay, you've explained how a rather ignorant sector of the market makes their purchases.

Why do you assume we all act like that?

Oh, not sure what any of this has to do with sitting in the latest Cadillac, however. Weak analogy there.

Re:I couldn't agree more.

[utnow]

well then perhaps I need more original friends ;) still applies tho

Re:I couldn't agree more.

[Anonymous Coward]

Judging by how closely you read the comment, I think that he made his point.

Re:I couldn't agree more.

[jbolden]

It doesn't work that well. Teenagers are going through a period of time where they are establishing group identity. Advertising doesn't work well with adults most of the time because they have:

1) Experience
2) Already developed opinions.

Where these things are not true they act like teenagers which shows the issue isn't critical thinking but information.

Re:I couldn't agree more.

[geminidomino]

Since when does MTV have anything to do with music?

What I would like to see..

[beldraen]

Anyone reading this working in Apple? Here's a very strong suggestion: What I would like to see is every song on iTunes that comes from a distributor under the RIAA umbrella marked on the site as "RIAA Affiliated" or some such. I know that iTunes has music from people that are outside of this whole mess and would wish to only buy from them. In fact, I have stopped buying music from iTunes for the moment because I cannot garentee that my money does not go back to this Evil Cartel(tm).

Apple want more money out of me? I need to know the money is going to the artists. Apple just needs to let the cartel
price itself out of existance by creating their own label and let the long end of the tail do it's magic.

Re:What I would like to see..

[jcr]

What I would like to see is every song on iTunes that comes from a distributor under the RIAA umbrella marked on the site as "RIAA Affiliated" or some such.

That would just add a tag to nearly every song in the inventory.

-jcr

Re:What I would like to see..

[Tony Hoyle]

There's a lot of independent stuff on itunes... it's easy for an artist to get listed. You just have to look for it.

Re:What I would like to see..

[HardCase]

What I would like to see is every song on iTunes that comes from a distributor under the RIAA umbrella marked on the site as "RIAA Affiliated" or some such.

Besides the problem that virtually all of the songs on iTunes would have a tag, the other hitch is that most people don't care. The whole RIAA suing everyone thing is a curiosity, but it's not going to make a significant difference in ITMS sales.

Not that it's a wrong idea - just ineffective, I think.

On a tangentally related topic, I was talking to my dad about the whole music industry versus the Internet thing the other day. He's 72 years old and much more in touch with the "problem" than I thought. Even he knows that the recording industry is trying to put the stopper back in the genie's bottle - and it ain't going to happen. He asked the same thing that the rest of us are asking: when will they figure that out and come up with a way to leverage the Internet that isn't a burden on the consumer?

Not too bad for an old curmudgeon who figured out last year that his notebook computer could copy audio CDs.

-h-

Re:What I would like to see..

[daeley]

That would probably be next to impossible to accomplish, as Apple's relationship with the cartel is crazy enough as it is.

Now what might more than possible is a flag that says "Indie". Same effect as what you said and less chance of causing grief, plus the Indies get some good PR. Win-win-win.

Re:What I would like to see..

[Anonymous Coward]

You would be foolish to believe we do not :)

The problem is that most people don't care about the RIAA in the first place. They just want their hit single. Remember you're a geek and most people don't think the same way you do.

Just an electrical engineer's 2c.

Re:What I would like to see..

[ohmypolarbear]

As I understand the post, the GP wants a way to tell which artists listed themselves and which ones are being listed through the RIAA.

Re:What I would like to see..

[SteeldrivingJon]

Not albums put out by Bloodshot Records, I don't think.

It would be nice if the store let you search by label, at least.

A rather tihink it might be the other way around..

[haplo21112]

Could go more like.

Fine you want good sales of your music well then you want us to get the song out there at the .99 price point...

Why...2 reasons.

1. Lower than .99 your music isn't worth it...
2. Higher your full of yourself as an artist and a sell out.

I totally believe this

[sgant]

The snakes have found a way to keep the rats in a coral, or so they think.

They still don't understand that the new age of music and songs and publishing is upon us. You don't need fancy million dollar studios to make music. You don't need radio airplay if you're good enough. You don't even need a marketing blitz if you're good enough.

This article is further proof that the music industry is at heart greedy and evil. They treat their artists like slaves and keep them bound to them with the "company store" tactics. Artists, break away. You don't need them.

What we need now is a MAJOR artist to break away and go it his or her or their own. Someone like Neil Young, or Dylan or the Stones or U2. A major musical act. They have the money to break away, and they can show that it CAN be done. Cut out the middle man, that's all these record companies are. They're unneeded in today's world.

Re:I totally believe this

[bornbitter]

I agree with you 100% but I see a problem: As Far As I understand, most of these 'big' artists are under years of contract. That kind of motivates them to stay put. I have no idea what kind of punishments the record labels would have for breaking contract, but from the way they are acting now... I wouldn't want to find out.

If a big name does decide to 'succeede' I'm afraid it will be a few years until they can.

Re:I totally believe this

[hraefn]

This worked really well for Pearl Jam and Ticketmaster

I do not think we're quite there yet.

Re:I totally believe this

[NeutronCowboy]

You mean like Prince?

Re:I totally believe this

[BushCheney08]

Hey! He was gonna be my example!

Re:I totally believe this

[IANAAC]

You mean like Prince?

While he's broken away from Warner Bros, he ended up losing a lot. He doesn't control anything of the many songs he wrote while signed with WB.

And that's the reason you don't see major artists break away.

Re:I totally believe this

[Anonymous Coward]

I don't quite think you understand. Let's spell it out.

1. To get noticed, artist signs contract with "Big Content."
2. Contract with "Big Content" says "If you every break this contract, you owe us all the money we put into you."
3. As artist gets more popular, "Big Content" puts more money into advertising artist. Artists money goes up, "Big Content"s money goes up even more.
4. As soon as artist is known, what they owe "Big Content" is astronomically higher then what they have made. Artist is now stuck with "Big Content" for the rest of their life, or they owe their label way more money then they have ever made to begin with.

It's a vicious circle (like the old "keyboard failure -- press any key to continue" loop and theres no real way out (except to smash stuff with a hammer).

(AC to avoid Karma Whoring).

Re:I totally believe this

[mattsucks]

What we need now is a MAJOR artist to break away and go it his or her or their own. Someone like Neil Young, or Dylan or the Stones or U2. A major musical act. They have the money to break away, and they can show that it CAN be done. Cut out the middle man, that's all these record companies are. They're unneeded in today's world.

A major established artist breaking away from the labels and successfully going it alone would be interesting, and would definitely cause the labels some stress. They would be forced to be more flexible with their existing artists to "keep they happy". However, the RIAA would remain.

A totally unknown artist BECOMING hugely successful, solely through the available tools in this "new age of music and songs and publishing" would be a backbreaker for the RIAA labels. Just one artist that is good enough to use self-recording, self-promotion, touring and merchandising, digital sales via iTunes and others to become a star on the level of U2, the Stones, etc.

Why would any artist after that point sign with any RIAA label? That's what it will take to get rid of the RIAA.

Re:I totally believe this

[Anonymous Coward]

There are *dozens* of artists doing this already. The problem is, you can't get out of the regional-local niche (where you can release albums on an independent label, tour like hell, build up a substantial following of fans, and make a very good living) into the national-worldwide distribution market without the help of the major players in the music industry.

You don't need fancy million-dollar studios or radio airplay or a marketing blitz to be successful, no. But if you live in Boston and want to be selling tens of thousands of albums in California (which is the sort of success it takes to be a MAJOR artist), you need some way of making the people in California aware of you, and radio airplay and a marketing blitz are the best way to do that.

The recording industry continues to exist because artists want to believe that there's a royal road to success: if they only get signed by a major recording label, they'll be in the money! Never mind that there are two roads to success: hard work and phenomenal luck, and you can't bet on the latter. The recording industry also continues to exist because it's the path of least resistance: people want music, and for the vast majority of people, listening to the radio (and thus hearing what the major record companies want played) is how they discover new music.

On the other hand, if what you want is good music, there's plenty of that from independent musicians. You just have to look a little harder to find it, and you have to accept that it will probably never be a national hit, but popularity and quality are orthogonal most of the time anyway.

Re:I totally believe this

[cens0r]

You should try to support Clap Your Hands Say Yeah then. They recorded their record themselves, they put it out themselves, and they distributed the first 50,000 copies themselves. They still haven't signed with a label in the United States (although they recently allowed one to handle their distribution) and most interviews with the band make it seem like they don't need one. If a band like that we're to sell half a million records and start getting radio air play (besides KEXP.org) it would be a huge wakeup call to a lot of people.

Re:I totally believe this

[NeutronCowboy]

If they don't control the songs when they break away, they don't control them when they stay. I believe that was the major reason Prince broke from WB - he had no control over what they did with his songs, so why should he provide them with more? The reasons artists don't break away is that they'll make less money than when the label is promoting them, and because the label generally owns their ass anyway.

Re:I totally believe this

[punxking]

The snakes have found a way to keep the rats in a coral, or so they think.

Oh dear god, now they've got scuba diving rats?! F**king Snakes!

Re:I totally believe this

[Anonymous Coward]

You should try to support Clap Your Hands Say Yeah then.

Only if they change their name to something less retarded.

Couldn't Tiered Pricing Hurt Labels

[rolfwind]

Because artists could go straight to iTunes and charge less per song and still get more money. Like $.69 per song or something.

They can do that with albums right now, but I wonder how many people would buy a $>7 album on impulse versus a $1 song/single in the meantime.

Re:Couldn't Tiered Pricing Hurt Labels

[MrDiablerie]

Artists currently can't go straight to iTunes. You have to have a label to get on there and even then, they have the right to refuse you if they think it won't sell.

Joel is an Ass

[MBraynard]

And now when a musician gets uppity, all the recording industry has to do is threaten to release their next single straight into the $0.99 category, which will kill it dead no matter how good it is.

Whatever. It's just a crackpot theory. Just because someone has a website and posts something - it gets to have it's own thread here on /.. But if someone had posted something as assinine as this in a comment on /., it would either be moded to off-topic or flame bait.

As a side-note, Yahoo is superior to ITMS in every way other than not working with IPods. $5 a month gets you everything. If you buy more than 5 songs a month from ITMS and you don't have a 'burning' desire, Y! Unlimited comes out WAY ahead. I just love exploring music and building unlimited playlists on my DJ.

Re:Joel is an Ass

[Anonymous Coward]

agreed.

wtf does joel know about the music industry?

he puts together an article that doesn't really make sense ("we'll cheapen your music so...people will buy it more to hurt you?") and gets posted on /. because of the lovefest for joel.

Re:Joel is an Ass

[Anonymous Coward]

Yahoo is raising their prices. To 9.99 a month I believe.

Re:Joel is an Ass

[eclectro]

Whatever. It's just a crackpot theory.

You're either a troll or a mouthpiece for the RIAA. Joel's reputation precedes himself in these parts for cogent insights on the topics he writes about.

In other words, you're flat out wrong. Also, hardly anybody on slashdot (yourself excluded) enjoys "renting" DRMed music.

Re:Joel is an Ass

[jcr]

As a side-note, Yahoo is superior to ITMS in every way other than not working with IPods.

Hydrogen is superior to gasoline in every way other than working in cars that people already have.

-jcr

Re:Joel is an Ass

[Darth Maul]

I just love exploring music and building unlimited playlists on my DJ.

Until you stop paying Yahoo!, that is...

Re:Joel is an Ass

[ThousandStars]

Five bucks a month might get you everything now, but if you cancel you lose it all. I probably spend less than $5 per month on average on music, and get to keep all of it forever. Furthermore, although Yahoo may charge $5 a month now, when they eventually raise the price you'll either put up with it or quit.

Re:Joel is an Ass

[Anonymous Coward]

You're either a troll or a mouthpiece for the RIAA. Joel's reputation precedes himself in these parts for cogent insights on the topics he writes about.

In other words, you're flat out wrong. Also, hardly anybody on slashdot (yourself excluded) enjoys "renting" DRMed music.

His blog is called "Joel on Software." His articles that deal with software are genuinely interesting and insightful, but I have to agree with the grandparent on this: what credentials does Joel have on this particular topic? Why should I listen to him? While the GP was a bit harsh, we have to realize that Joel's article is his opinion and that other people have different thoughts. Your assertion that the GP is "flat out wrong" because he doesn't agree with Joel is narrow minded and certainly not interesting (as you have been modded at the time of this posting).

Re:Joel is an Ass

[Concerned Onlooker]

Also, iTMS hasn't been instrumental in getting a foreign journalist jailed by ratting him out to his government.

Re:Joel is an Ass

[pammon]

As a side-note, Yahoo is superior to ITMS in every way other than not working with IPods. $5 a month gets you everything.

No it doesn't, not any more. If you want to actually take any of that music with you, it'll cost you $12 a month. If you want to burn a CD, it'll cost you an extra 79 cents per song. And when they inevitably jack up the fees (and they will; $5 a month is a loss leader) and you switch to another subscription service, you'll have to recatalog and redownload all your music; what a hassle! You can have it.

Re:Joel is an Ass

[MBraynard]

Actually, I agree with you 100%. but I just happen to have a hydrogen car.

Re:Joel is an Ass

[MBraynard]

Hi,

Actually, no, it's still just $5 a month. It was when I signed up and will continue to be through the end of November per your own article that you didn't seem to read.

Also, I actually said it 'superior if you don't have a 'burning' desire. Get a radio kit for your car and you have no need to burn, anyway.

And you are right - everything is $0.79 - much less than ITMS.

Finally, you are rigt about switching between services being somewhat of a pain (I switched from Napster to Y! due to price). But still, it's not like the music I want to listen to _right now_ isn't always available.

Re:Joel is an Ass

[toddestan]

In other words, you're flat out wrong. Also, hardly anybody on slashdot (yourself excluded) enjoys "renting" DRMed music.

As opposed to the people on slashdot who seem to have no problems "buying" DRM'd music? What are you actually buying anyway?

Re:Joel is an Ass

[SteeldrivingJon]

"It was when I signed up and will continue to be through the end of November "

Great. So what happens on December 1st?

I can tell you how much my iTunes-bought songs are going to cost me a year from now ($0). Can you say the same?

Re:Joel is an Ass

[MBraynard]

Look, if you prefer the Itunes method, Yahoo still comes out ahead because rather than being $0.99 the songs are just $0.79 or about $8 for a whole album.

A year from now, I will pay ~10 for unlimited music. I'm cool with that. I listen a lot while working out and am always building new playlists and exploring new musics.

Re:Joel is an Ass

[Anonymous Coward]

The same thing he knows about the software industry... nothing.

Marketing is the only power they have...

[shrubya]

...and with the explosive growth in blogs and other peer communication, standard advertising and payola soon won't enough to control popularity. The music labels are dinosaurs that really don't need to exist any more. Musicians are gaining the ability to sell their albums worldwide, online, independently, and if a critical mass of popular artists ever do so, it's game over. This is simple survival tactics.

Cake

[everphilski]

Gavin Rossdale of Bush drew only 40 people in Milwaukee two weeks ago

Wow. Cake drew a full house when I saw them in Birmingham...

-everphilski-

Re:Cake

[dada21]

The club (The Rave) booted the band to a tiny bar stage instead of the main stage. I was shocked myself (I didn't go, not a fan).

Re:Cake

[shawb]

Could it be that Bush is a one hit wonder has-been band, and then this is just the singer not even the whole band? I recently went to KMFDM at The Rave, and it was a pretty packed show. Singing happy birthday to Sascha was a kick. But, KMFDM wasn't really all that hyped. They just happen to have some followers who want to listen to the music and see them live.

Then again, maybe the perception of Bush being a one hit wonder comes from them not kowtowing to the recording execs.

Re:Cake

[periol]

Then again, maybe the perception of Bush being a one hit wonder comes from them not kowtowing to the recording execs.

Yeah, somehow I don't think so. From the band's official biography, you'll notice that with their latest album, whatever it was, "The British quartet has returned to its hard-edged roots." Call me cynical, but I'm guessing those are 'record label roots'.

People are that dumb

[Anonymous Coward]

Big Media tells you Black Eyed Peas are #1, but they really suck. You are dumb enough to like their music because Big Media plays it everywhere and tells you everyone else likes it, even though they suck. Since most people are just stupid consumers when it comes to music, it will probably work out well for the media companies. Black Eyed Peas still suck.

Re:People are that dumb

[PunkOfLinux]

Indeed. Seriously, the best stuff I've seen in the top ten for a LONG time was the new system of a down cd, which I think is crazy, because that just doesn't seem like the kind of stuff the masses would listen to. And it wasn't even pushed that hard compared to other things. But it still made it. Why did it make it there? Because people actually LIKE. It was more than just the marketing machine. Perhaps the music industry should take notes here. I know it's still stuff that supports the RIAA, but it's still much better than half the shit they push. If somebody put full-color pictures of a sexy, half-nude woman in a poetry book to sell the book, people would be very offended. But that's basically what they do with music today.

Re:People are that dumb

[limabone]

Yeah but that chick is hot and sex sells...why do you think music sucks so badly these days? It used to be about music now it is mostly about image.

It is hard to sell millions of copies of a young girl with the voice of an angel and the face of a dog's rear end.

Re:People are that dumb

[cens0r]

I used to love the black eyed peas too. Their first to albums are really quite good. Of course then they fired the girl who used to sing and hired someone who looked pretty, and sold out to everyone who would give them a dollar. Quite sad. I'm so sick of them I don't even listen to my old records of theirs.

Re:People are that dumb

[Stormwatch]

Check out SomethingAwful's "Your Band Sucks" column on SOAD.

Answer to your prayers

[sgant]

go to the RIAA Radar Home and put in any artist or album or UPC code and it will tell you if it's from a RIAA artist or not.

I used it a lot when Pepsi and Apple were giving away all those songs and I only redeemed the songs from Indy acts.

Check it out.

Re:Answer to your prayers

[beldraen]

Sweet, thank you; however, I still think that it being tied into iTunes would give Apple appropriate leverage in this mess. It would cause consumers to ask what is going on and investigate more, something the RIAA labels have no desire to see.

Re:Answer to your prayers

[psykocrime]

Awesome... I see that Century Media and Nuclear Blast are not RIAA labels, which is awesome. A lot of bands I like (Sentenced, Iced Earth, Blind Guardian, Dimmu Borgir etc.) are on those... I feel a lot better knowing that.

Re:Answer to your prayers

[enjo13]

Of course.. seeing how Apple makes a lot of money from this Itunes thing, openly being combative the RIAA (particularly when so many competitors are popping up) runs a great risk to the business model. Make no mistake, iTunes is very much a part of this RIAA mess.

Re:Answer to your prayers

[Anonymous Coward]

Awesome... I see that Century Media and Nuclear Blast are not RIAA labels, which is awesome. A lot of bands I like (Sentenced, Iced Earth, Blind Guardian, Dimmu Borgir etc.) are on those... I feel a lot better knowing that.

Who? Never heard of them.

Re:Answer to your prayers

[Anonymous Coward]

Well I've heard of iced earth, so I'm assumming they're all metal/hardcore. That should be all you need to know ;)

Re:Answer to your prayers

[ceoyoyo]

It's going to be. If the track turns up as costing more than $.99 then it's from the RIAA. ;)

Re:Answer to your prayers

[Anonymous Coward]

Who? Never heard of them.

Considering that the poster used* the word "awesome" twice in the first line, I have a hunch the bands have juvenile appeal.

*used in a way that trivializes the original meaning of the word.

Re:Answer to your prayers

[mr_c0w]

A very good tool, though I was discouraged to see a lot of the groups that I like going from Indy labels to RIAA labels.

Does anyone else think that its weird that when you search for an artist, and it comes up as being on a label associated with the RIAA, it gives you a warning, but still gives you a nice button to buy it from Amazon?

Paranoia Strikes Deep...

[mumblestheclown]

it's about allowing the labels to manipulate public perception of value through pricing.

Oh stop it already. We're used to Economics-101 ignorant, occasionally semi-tongue-in-cheek-I-hope paranoioa from slashdot, but this is really too much.

Economics 101:

Any time you as a seller of a good price an item at other than a profit-maximizing value, your profit decreases. This is true regardless of whether the item is a luxury good or a commodity. Or, in other words: while the labels might be able to use the mechanism as the headline naively suggests they might, this would be generally just as against the label's own interest as taking the latest blockbuster movie and shoving it straight into the 99c VHS bin would be.

The real fact of the matter, from anybody who has taken economics, is to recognize that truly fluid, market-driven pricing is a great thing for buyers (taken as a whole) as well as sellers. I applaud any news of this being the case as should any and all readers here.

By the way, I likewise finally doing away with the idiotic ways agencies sell tickets to sporting events. The prices of those too, or at least sure-to-be-sold-out-at-current-prices events, should be sold in some kind of auction system to ensure a) maximal profits for the sellers and b) fair availability for those willing to pay. In other words, in market terms, a win-win.

Anybody who thinks of replying to my post and ranting about how tickets are a finite resource whieras digital music is not is ignorant and should save their breath. This is irrelevant to the basic economic argument I am making here.

Re:Paranoia Strikes Deep...

[nagora]

Your argument fails on two counts: firstly the idea that the companies want their product to be perceived as high-value by keeping the price up is one that they have actually stated in public, it is not some paranoid fantasy. The same goes for DVDs: recently the movie industry voiced its concern about DVD's being given away with Sunday papers saying that they wished DVDs to "remain aspirational".

Secondly: this is not a fluid market that is being discussed. It is a price-fixing cartel arrangement for the purposes of preserving the small number of vested interests in the marketplace and protecting those interests from natural market forces. The fact that they are wanting to have different price points set by the cartel does not make it fluid or market-driven.

The ticket point is irrelevant.

TWW

Re:Paranoia Strikes Deep...

[Anonymous Coward]

You forgot to mention that Econ 101 only covers open free markets.

What we have here is a government endorsed media empire opperating a controlled market.

Re:Paranoia Strikes Deep...

[Tsiangkun]

AC is insightful.

Re:Paranoia Strikes Deep...

[Anonymous Coward]

sure-to-be-sold-out-at-current-prices events, should be sold in some kind of auction system to ensure a) maximal profits for the sellers and b) fair availability for those willing to pay. In other words, in market terms, a win-win.

Yeah, maybe we should start doing this with kidneys too...

Re:Paranoia Strikes Deep...

[Imsdal]

By the way, I likewise finally doing away with the idiotic ways agencies sell tickets to sporting events. The prices of those too, or at least sure-to-be-sold-out-at-current-prices events, should be sold in some kind of auction system to ensure a) maximal profits for the sellers and b) fair availability for those willing to pay. In other words, in market terms, a win-win.

I completely agree, and the current system is one of the true mysteries in life to me. Not only are they giving away money, they are actually giving that money to scalpers! If they gave them to the buyers, it could be considered PR and maybe a good thing in the long run, but they don't even do that.

Before the web, it was probably difficult to setup a proper auction, but now it should really be a piece of cake. I am very surprised this isn't being done today.

In /. speak:
1. Auction
2. Profit
...and not the lack of "???"...

Re:Paranoia Strikes Deep...

[mc6809e]

Oh stop it already. We're used to Economics-101 ignorant, occasionally semi-tongue-in-cheek-I-hope paranoioa from slashdot, but this is really too much.

Economics 101:

Any time you as a seller of a good price an item at other than a profit-maximizing value, your profit decreases. This is true regardless of whether the item is a luxury good or a commodity.

You're missing the point. The point is that, for many things, demand can actually GO UP as price goes up over a certain range.

Just recall the NASDAQ as it was moving towards 5,000. The increase in the prices for stock actually stimulated more, not less demand.

Well, until it went "pop", at least.

Still, the fact remains, sometimes higher prices increase demand and profits at the same time.

Re:Paranoia Strikes Deep...

[NoMoreNicksLeft]

The profit-maximizing price for a single product, the only one you sell, may be different than the profit-maximizing price for that same product, if its one of 1000s that you sell.

The record labels have 1000s of products. Making an extra half a million on one album/band/act/song is a bad deal, if it undermines your hundreds of other albums/bands/acts/songs. So yes, selling a good song at the profit-maximizing price is a bad idea, if it means you lose control of all your other serf performers. Only having one price to sell any song at, means you can't even manipulate this!

Re:Paranoia Strikes Deep...

[enjo13]

I guess there is a reason there is economics 102 (although that rule was never taught to me in any of my economics classes, go figure).

After all, what about loss leaders? You know, products intentionally priced under cost (much lass profit maximizing) in order to sell ANOTHER product at higher volume and better margin?

Or, what about a company pricing competitive products well below market value in order to generate more traffic in their stores to sell products that aren't so competitive?

Or, what about a software company that more or less gives a product away to embedded in an operating system to generate brand recognition or a distribution path in order to sell much higher volumes of other products in their portfolio.

The author is making a very sound economic argument by arguing that record labels can use pricing strategy to manipulate the market value of the artists themselves. They are essentially trying to control costs and stratetigcally protect their business by controlling the relative value of a single artist. I have no idea if this is actually occuring, but its definitely a valid argument.

Re:Paranoia Strikes Deep...

[kindbud]

Any time you as a seller of a good price an item at other than a profit-maximizing value, your profit decreases.

A=A

Randian arithmetic. Snore.

Re:Paranoia Strikes Deep...

[Bezben]

Bad, horrible idea.

Say a small band builds up a loyal fanbase slowly and then sudden makes it big. They're really popular. Kids think they're cool etc etc.

If they have a concert and the tickets are auctioned, what do you think happens now? Think any of their loyal fans will get in? Hell no. It'd turn concerts into those stupid fucking celebrity parties where rich/popular people go for exposure. Basically it'd turn popular live music into a farce.

Re:Paranoia Strikes Deep...

[mumblestheclown]

After all, what about loss leaders? You know, products intentionally priced under cost (much lass profit maximizing) in order to sell ANOTHER product at higher volume and better margin?

Because as anybody with a brain will tell you, the music industry doesn't work that way. There are no loss leaders in music for reasons that are so obvious I feel silly even mentioning them inlcuding that artists are not subsitutes for each other, there is no such thing as an 'entry level' album akin to an A-class mercedes (since you cant know in advance whether an artists first or 5th album will be his best), there is no such thing for all practical purposes as 'label loyalty' akin to brand loyalty, and that music is a perceived value good - why should i pay $20 for x's 2nd album when I paid $5 for the first?

You should be embarassed that you even brought up 'loss leaders' in this context.

As far as the other responders to my post go: I wish I had the time to respond to all the bullshit that has been flung my way. People claiming that basic economics dont apply, for example, because the RIAA companies are an evil monopoly (neither half of that argument - that the economics dont apply and that they can act efficiently as an oligopoly are true) are so full of shiat it is unbelievable. Alas, I will have to simply ignore them for now, since I do not have the time to reply properly.

ringtones are the reelz $

[Rodney.Quills.Dinkin]

Artists make more money off selling ringtones than $0.99 songs. We freely distributed PUNJABI EXTREME without asking for any royalties. GNAA is the current leader in online music distribution because of our core business model of providing free music. Spending $0.99 to download garbage quality mp3s is unethical. Listen up RIAA, this is how it's done.

Wha?

[Anonymous Coward]

People pay for songs?

Its toobad Apple can't cut the middle man...

[haplo21112]

...they just might eventually.

At this point they are not allowed to become a record label themselves because of the deal that they had to cut with "Apple" records (aka the publishing company front of that wildly popular band from to UK)...at some point I see Apple Computer cutting some reasonable deal with "Apple" records...apple going to the artist directly to get the music out there.

Re:Its toobad Apple can't cut the middle man...

[Castar]

Which is why Apple Computer should take the huge profits they've gotten from iPods, cut a check, and acquire Apple Records. They'd take care of the trademark issue AND have a big name to found their own label on.

But they should wait until the labels are hooked on the revenue stream, because if they suspect they're about to be cut out, they'll take their ball and go home.

Re:Its toobad Apple can't cut the middle man...

[vrai]

Apple Corp (which owns Apple Records) is a private company, owned by the remaining Beatles and the estates of the deceased ones. The company still owns various rights with regard to the Beatles' back catalogue. As such the (very wealthy) surviving members are unlikely to sell to a company they've been fighting with for two decades. There's no incentive (they are already loaded) and numerous drawbacks (such as the loss of publishing rights).

Power of the compiler

[xTantrum]

i couldn't agree more. i dont' know when artists and even the general populace will realise that the world going digital is one of the best things that could ever happen. We now have the power to sway the dinosaurs of old, now is the public's time to actaully say something and do. We can't say it to our bosses - blog it. they don't realise we don't want the archaic packaging of cd's and DRM - create a p2p network. The power of the compiler has been unleashed, information not only wants to be free, it wants to dissemenate and god help those who stand in its way.

Like price matters to bullies

[Anonymous Coward]

I just have one thing to say. Record labels are bullies. Do not care who they step on to make money. That includes the artists and consumer. Regardless of the price, the labels will still act like a gang of thugs. it's that simple.

Will it really work?

[tktk]

...it's about allowing the labels to manipulate public perception of value through pricing.

The article's theory seems wrong. If something is going to cost me more money, I'm going to be more critical when deciding to buy it. If a new single on ITMS costs $1.49, I'll be a bit more critical and make sure I really want it. At $0.99, I might buy it without much thought. Sure, I made up the $1.49 price, but with any higher price, people will tend to be a bit more critical.

And lets look back at CD prices. New releases of CDs usually cost $14 because they're on sale. When the sale ends, the price is back to $18 or more. I don't see the public perception of value increasing any. I don't think to myself "It's $4 more now, so it must be good."

Except that...

[Anonymous Coward]

...there is little chance that you'll see many songs drop below $.99. The number of songs that you are likely to -want- that go below a buck is going to be even smaller. This is not about their desire to create a "discount bin" full of old, crappy music. It's about their desire to price new/hot singles -higher- than $.99.

Uh... this makes no sense

[GMFTatsujin]

The "low price as punishment" model only works if the companies expect customers to buy their music TUNES UNHEARD. I have *never* purchased music, online or otherwise, that I didn't hear from somewhere first*. By that time, I've already decided whether I'm ready to pay cash for it, and you know what? If I find the CD or whatever cheaper than what I'm willing to pay for it, that's what I call a BARGAIN.

I don't decide on quality of music by price. I decide on price by quality of music. Once again, the content controllers have their heads in the clouds.

* I do buy imported, so-called "ethnic" music, tunes unheard, but that's because I will probably never hear the music anywhere else in any other way. I'm talking CDs like the various Rough Guides, or CDs by people with names I can't pronounce but have apparently hit it big in their country of origin. In that case, I budget myself $10 and pick the first thing on the rack that falls under that price. I've been very happy with some of my picks, and the risk is practically nil.

Re:Uh... this makes no sense

[argent]

I have *never* purchased music, online or otherwise, that I didn't hear from somewhere first*.

And guess whose payola determines what that music is, for most people?

But a lot of people go to the iTMS and just browse around, listen to samples, and buy stuff that sounds good. Sometimes the sample's just too short and you guess wrong... and you're out a buck. But it works.

And guess whose payola DOESN'T determine the music you find that way?

So think of it this way: they're just trying to force Apple to take their payola.

My $0.99

[_spider_]

Well, I think (see: hope) that people will avoid anything higher thatn $0.99 per track. It works, and its fair. Even from my favorite artists, I will not accept $1.99 a track, or anything above $0.99.

I think that ITMS has proven itself as a working model. Don't Mess With It!

If it ain't broke, don't fix it...

Lesbian Gangster Yoga?!?

[sstidman]

Similarly, when stinkers like Lesbian Gangster Yoga with Ben Affleck come out...

Huh...I think I missed that one when it was in the theaters. Must have been on Skinemax. Has Ben's career finally sunk so low that he is making cheap porn flicks?

Re:Lesbian Gangster Yoga?!?

[Anonymous Coward]

It's called Gigli... pronounced "jiggly."

Re:Lesbian Gangster Yoga?!?

[sstidman]

You saw the movie, didn't you? Is that why you posted AC?

Do you even need the record labels?

[mcho]

Maybe I'm not hip with the music scene, but, as a new artist, why can't you release your albums to iTunes? Or even sell your CDs and merchandise through Cafe Press?

Isn't it true that some of the new music is getting promoted through unconventional ways such as podcasts, collaborative web sites (such as MySpace), and other people's iTunes mixes? (For examle, I've been exposed to new music through other iTunes mixes that I would have not been otherwise aware of.)

I don't get that...I can easily become an ISV, but a music artist needs a record label?

Re:Do you even need the record labels?

[PunkOfLinux]

No, apparently you're not. Because OBVIOUSLY people want unmusical crap with absolutely no real musical value (i say this both as an amateur musician and composer). The crap that they push today is usually crap with nothing really musical about it. It takes more than rhythm to make music folks.

Re:Do you even need the record labels?

[mcho]

Two things always happen to me when posting:

1. I can't spell; and

2. I always score a 1.

Lower prices can be a good thing...

[plaid_piper]

You could also look at it as low prices being a good thing. If you're just looking around for some new sounds, what are you going to consider buying? The cheap stuff of course. For me it's a moot point... iTunes isn't worth it as far as I'm concerned.

How to escape major label promotion?

[tepples]

People stop buying commercial music and only buy from indie labels who don't manipulate their artists and the prices of their wares.

Problem is that people are forced to listen to major label music in grocery stores, on school buses, in automobiles (unless the driver can afford a portable music player), in venues that have live music and don't serve liquor, etc. This acts as promotion for major label CDs and major label music downloads

It's pretty simple

[Billosaur]

People will gravitate toward cheaper tunes, unless it's someone they really like and then they'll pay the extra pennies. Marketing types know very little.

Re:It's pretty simple

[Tankko]

No, it's you that know very little. Why are people buying iPods over brands? Features? No? Price? No? What then? Marketing!

Marketing is very effective and it would do you good to understand that, even if it's only to fight it's affects.

The Joke's On Apple

[porkface]

Regardless of whether the labels get leverage, there's still a revolution going on. That revolution is somewhat required by the circumstances, and if the current labels and Apple don't want to get on board, it's their loss.

as a musician I say

[JimmyJava]

fuck the music industry. I've put in too much effort for nothing and I've realized the only way to truly be successful in the music industry is to love what you do. As soon as you have to deal with evil, it's no longer fun.

Dial-up

[tepples]

Musicians are gaining the ability to sell their albums worldwide, online, independently

How can these musicians promote their works to people who do not have a computer, to people who do not have Internet access, to people who are still on dial-up, or to people in spaces where major label music is playing, such as a school bus or a grocery store?

Oh-a-oh

[Swamii]

Video killed the radio star. Internet killed the video star. RIAA killed the internet star. Boat's in the water. Cage's in the water. Shark's in the water. You're in the cage? Shark's in the cage. Farewell and adieu to you fair spanish ladies...

This is backwards from the most common case...

[uqbar]

Look at what really happens. If it's a sure bet, yes, they will jack up the price because supply and demand says plently of people will want new records by favorite (known) artists.

But sometimes you want to hype an artist that might not do so well, but who you think might catch on with a little boost. This is why many records and DVDs are discounted only for the week they debut. It creates a concentrated rush in demand where more people buy the item on a whim (since it is cheap) and others that think they might want it avoid delaying purchase since the sale price is temporary. The result if all goes well is that you debut on the charts - and this means that laggards will want to buy the media even if the price is raised up to the "premium" media price. Once market demand dies down, you will see the item drop in price again (ala the "Nice Price" promotions). This is all stuff that exists in brick retail outlets and the labels simply want to apply these tried and true techniques online.

Interesting, but...

[Anita Coney]

I have to disagree. Music and movies are different. When a person buys one song he's CERTAINLY heard the entire song several times before AND he certainly likes it.

With a movie, the most a person has is a review or word of mouth. He has no idea he'll like it at the time of purchasing his ticket. Thus, the price could possibly influence him.

I can't for the life of me imagine someone liking a song, looking for it on iTunes, and then NOT buying it because it's cheaper than they thought.

Like I said, interesting, but wrong.

"iTunes Records" to satisfy Apple Corps?

[tepples]

At this point they are not allowed to become a record label themselves because of the deal that they had to cut with "Apple" records

It was a trademark issue. I can't see any trademark-related reason why Apple can't start a wholly-owned label called "iTunes Records" or the like as long as no Apple logo appears on the packaging.

This Guy is an Idiot

[KrackHouse]

So people won't buy a song they like because it's under priced? The reason movie ticket prices are the same is mainly because it COSTS the same to stick on a reel of film regardless of the name of the movie. Fewer people would see Lord of the Rings if ticket prices were $3 each? Really?

This is either a revolution in economic theory or a complete load of crap. It's sure trendy to hate people making money but this is way off the mark.

Re:This Guy is an Idiot

[Anonymous Coward]

How many times have you heard of a PHB saying that a GPL program can't be good enough for enterprise because it's free and you get what you pay for? People absolutely equate costing more with better quality.

Re:This Guy is an Idiot

[MrTester]

urgh. RTFA. No one is saying you are not going to buy music you already like because its cheap. Its about unknown music. Its the CD's/DVDs in the "Sale" box. Sure, we look in there sometimes and will grab a movie we have seen before cuase its cheap. But how often do you buy a movie you have never heard of out of the sale box? Never. Because the assumption is that if it is in the sale rack, it must be crap.

Re:This Guy is an Idiot

[slycrel]

Not true.

People want to pay for what something's worth. If the price is too low it hits the "too good to be true" category and people are turned off of it. For example, my wife helped startup a sign company a few years ago. They worked a ton of hours, had a quality product and had the lowest price out there. Problem was getting interested people to buy. People called for a quote for different sign jobs. Most people actually went for a quote somewhere in the middle (in this case from other companies), NOT the lowest price, which is what they were offering. The lowest price often means the cheapest/most unreliable to many people who are trying to make their money count. Once they started jacking up their prices to "average" they got a lot more business.

I'm sure some of this depends on what you're selling, who's buying, etc. but I don' think it's flat out wrong for him to say something like this.

Promotion

[tepples]

as a new artist, why can't you release your albums to iTunes?

Two reasons:

1. How do you promote your works to people who don't have a recent computer and high-speed Internet access?
2. How do you afford the services of a forensic musicologist to make sure that you didn't make the same mistake that George Harrison made when putting "My Sweet Lord", an inadvertent cover of Ronnie Mack's "He's So Fine", on his solo debut album All Things Must Pass?

Hell Yes, CDBaby does

[jarboy]

You can get CDBaby.com to make your independent music available over iTunes, and a number of other online music distribution sites. Bands get to keep $.65, CDBaby takes $.09, and Apple (or other distributor) get the rest. No RIAA or labels at all. Its probably wise to publish your music with ASCAP (or US Patent Office) to make sure no one steals it (by steal I mean take and resell for money, not just listen) I am probably going to do this soon, meanwhile, my bands music is free as in beer, www.basementfunk.com.

Everybody repeat after me.

[popo]

"We don't need record labels any more."

As far as I care, any artist that gets in to bed with a record label at this point in history is fully deserving of whatever degree of ass-reaming comes their way.

Is it not getting funny hearing artists say "My record label screwed me!"

Uh... yeah?

A Good Thing?

[Volfied]

Philosophically, I can't help but be annoyed at this for any of a number of reasons. Music is music is music. Different people will ascribe different values to different music, not because of any intrinsic value, but because of its value to them. The record labels don't think this way and, in a practical sense, they don't need to. The more they hype something, the greater its perceived value in the eyes of the sheep-like consumer. All that aside, however, this may save me money. The simple fact is that 90% of the music being produced and 99.9% of the music getting heavily marketed nowadays is pure, unadulterated crap. Tiered pricing will lower the price of older material (Classic Rock, Jazz, Classical, etc.) as well as the less popular modern music (Indie Rock, Post Rock, Jam Bands). Quite frankly, that's most of the stuff that's worth listening to. So, as much as the shift irks me, I've got to admit that I'll probably benefit from it. I'm not sure which I'd rather. What is the general consensus on this issue?

please please

[Anonymous Coward]

anyone who thinks Joel's idea doesn't work hasn't met my wife, who refuses to even look at a bottle of wine that costs less than $15. I know tons of other people who are the same way, excellent article.

The record labels are basically fscked

[electroniceric]

The record industry (and analogously the publishing industry) has always had non-commodity profit margins because of vertical integration:
production --> promotion & marketing --> distribution.

Their dominance of these three was largely built on the high startup costs of all these industries. This meant the larger recording companies could basically corral artists into accepting disadvantageous terms in production in order to get access to the other two parts of the business. In both production and distribution, software and the Internet have caused those startup costs to plummet, and real competition threatens to break out.

Apple is the most prominent of many to figure this out, and they may just have enough clout to take a nice bite out of the recording companies' distribution business. This could well hasten the de-integration of the business and commoditize the whole lot. That's why the record companies are going bonkers over p2p and iTunes - if these succeed, they have only marketing and promotion to sell, and while they definitely have credible experience at that, they're by no means the only fish in that pond. If I were a marketing company with any experince in the entertainment industry I'd be calling Apple (and Google and Microsoft) now, lining up to get in on the new opportunities when record companies' vertical integration comes apart. Of course they may try to do like telcos (who have exaggerated profit margins for exactly the same reason) and try to get the (so-called free market) Congress to intervene to preserve their dated business model.

Economics of Piracy Economics

[Anonymous Coward]

Remember you can pirate music for free!

So it's not about pricing music so the most people buy, its about framing your store so that everyone uses it.

Face it, people aren't paying for the music, they are paying for the convenience of having it all organized.

As soon as the store become crappy, or the pirates get a really nice looking front end, people will be driven back to piracy.

You maximize profits by keeping it all simple, not some old-school "raise prices till they stop coming" scheme.

Re: Variable price movie tickets

[Anonymous Coward]

The UK has a variable price movie theatre, run by the same Easy Group with the low cost airline :
http://www.easycinema.com/Enquiry/Enquiry.aspx

Instead of ticket prices being set by the theatre's perception of quality, the price is directly set by demand. Thus a very popular film at a very unpopular time will still have cheap seats available. As the cheap seats are booked up, the price rises.

Shame about the colour scheme - the inside of the cinema is the same bright corporate orange and white.

Big label promotion is not the price tag

[Anonymous Coward]

Big label promotion is not about the price of a CD.

Big label promotion starts way before that: flooding radio, tv, magazines with promoted performers, so that customers, fans can start considering to buy. Without that chances are you don't even hear about the performer, so you have no price to worry about at all.

That's the catch22, that's why previously unknown artists have low chance for breakthrough, no matter how many on-line distribution exists. In fact, the bigger variety is available, the chances for unknown artists are worse.
What big label promotion does is to lead and fixate your attention on a single star among all the others in the huge universe.

Big label desparately needs individual pricing, because big label style promotion is expensive, they want you to pay premium price for the hit songs, they introduced to you, especially, if most of the other tracks on the same CDs are boring.

no, it's simpler than that

[PMuse]

According to Joel, it's not about pricing songs commensurate with their economic value; rather, it's about allowing the labels to manipulate public perception of value through pricing.

Promotion is much more effective than up-pricing at convincing consumers they want something. Up-pricing is something like a third-order effect. The deterrent effect of increased price is more like a second-order effect.

It is much more likely that the studios simply want to cash in on the high initial demand for new releases and the high continuing demand for popular old ones. In one way it is like movies: they want to be able to spend money on promotion and generate increased revenue thereby.

I expect that if they could up-price new movies, they'd do that, too. Notice that special passes, discounts, etc. often don't apply to new release movies (so-called "special engagements").

Sure, when the studios talk up this plan, they talk about lowering the price on tracks no one will pay $1 for. Theoretically, there may be some low-level demand there that they could capture at the lowered price point, but I'll believe that when I see it.

Strange rules

[Prof. Pi]

What strange rules of economics are they suggesting that more expensive items are more appealing for the same quality?

I read in a wine book that in the 50's, California wine makers mostly sold their wine from big vats in regional supermarkets. You'd bring your own jug, and fill it from a spigot on the vat, like a big coffee urn. You'd pay by the quart or whatever. And they'd let you sample it, of course. Sellers found that if they put three urns out with three different prices, people would almost always claim the most expensive one tasted better, even when they put the same wine in all three!

You forgot about...

[PhilipPeake]

Their ultimate weapon - the lawmakers that they own. Together with Microsoft and the "trusted computing" initiative, you may well find that your computer/dvd player/cd player refuses to play *any* content unless it is digitally signed by a "trustworthy" mega corporation.

Its for the children.

To protect them from evil cyber terrorists.
See how far your indie bands get then.

The real real reason behind tiered pricing

[dtfinch]

I'll pay more for some songs than I would for others. There are a lot of old, good songs that I wouldn't buy for 99 cents, but which I might buy for a bit less. Consumers get fairer prices, and record companies see more profits due to the increased sales. Too bad for the musicians though. They'll still see an average of 2-3% of revenue.

Music stores don't sell all their CDs at the same price. And you wouldn't run an online software store where every program was $99. It's simple economics. You charge what people will pay, attempting to maximize profit.

Do I have this right?

[Phat_Tony]

I want to make sure I understand his accusations, because I feel like I might be missing something. He's saying that I'm going to not buy music that's cheap, and only buy music that's expensive, because people are only willing to buy expensive things, (because they must be better)?

Like, for instance, the way gas stations at intersections always compete to have the highest price, going so far as to advertise it out on the corner of the intersection in huge numbers, because everyone knows that people are only willing to buy the highest priced gas they can find, because it must be better. None of that cheap gas for Americans! That's why everyone's been so happy about gas prices going up. Thank god they're finally selling us the good gas, it must be so much better than that old gas that they'd sell for a paltry sub $2.00 a gallon!

To stick with his example- I like REM. So when the next REM album comes out, I'll drop by ITMS to pick it up, but I'll see that it's only $6 for the album! (Apparently because REM wouldn't buckle to some kind of blackmail, the studio decided that as punishment for REM, the studio would throw out millions of dollars in potential profits, because we all know that big business is all about voluntarily forgoing profits. That'll show REM!) Anyway, the theory is that I'll get to ITMS, and be all ready to buy that album, but when I see the price, I won't think "Wow! An REM album for only $6! That's great! Thank you, studios, for such a bargain!" Instead I'll think the only rational thing- "Gee, I thought my taste in music was that I like REM, and I thought I liked the first 30-seconds of these songs I heard on the ITMS, and liked the whole songs when I heard them on the radio, but I guess I must have been wrong, because I'm not the type to like cheap music. I wonder if Prada would sell me some music for like, $5,000 an album? I'd really like that."

Yes, it's common knowledge that capitalism breeds price competition, but I feel so silly- before reading this article, I had it all reversed! I thought that people shopped around to find the lowest prices. How silly of me! In fact, for my whole life, I've been doing it all wrong! It's good to know that I should be shopping around to try to find highest prices, to trick myself into perceiving the value of the item to be greater.

Re:Do I have this right?

[Anonymous Coward]

Like, for instance, the way gas stations at intersections always compete to have the highest price, going so far as to advertise it out on the corner of the intersection in huge numbers, because everyone knows that people are only willing to buy the highest priced gas they can find, because it must be better. None of that cheap gas for Americans! That's why everyone's been so happy about gas prices going up. Thank god they're finally selling us the good gas, it must be so much better than that old gas that they'd sell for a paltry sub $2.00 a gallon!

Except that there is the assumption that gas of similar octane will perform similarly, thus it's compared on price alone. Unlike music, where different artists, or even different songs by the same artist, vary wildly in quality. So yeah, incredibly broken analogy there.

To stick with his example- I like REM. So when the next REM album comes out, I'll drop by ITMS to pick it up, but I'll see that it's only $6 for the album! (Apparently because REM wouldn't buckle to some kind of blackmail, the studio decided that as punishment for REM, the studio would throw out millions of dollars in potential profits, because we all know that big business is all about voluntarily forgoing profits. That'll show REM!) Anyway, the theory is that I'll get to ITMS, and be all ready to buy that album, but when I see the price, I won't think "Wow! An REM album for only $6! That's great! Thank you, studios, for such a bargain!" Instead I'll think the only rational thing- "Gee, I thought my taste in music was that I like REM, and I thought I liked the first 30-seconds of these songs I heard on the ITMS, and liked the whole songs when I heard them on the radio, but I guess I must have been wrong, because I'm not the type to like cheap music. I wonder if Prada would sell me some music for like, $5,000 an album? I'd really like that."

I think it's more applicable when you think instead of all the bands that you don't know. Had you never heard of REM (or another similar band), you might be less likely to buy their music if it was "discount priced." Of course you wouldnt STOP liking REM because it was cheap, but you MIGHT be less likely to get into their music in the first place if it was. Think that sounds stupid? How often do you go sniffing around in the $4.99-or-less bins for your music and buy albums from artists you've never heard of? Maybe you're different, but most people I know that if it's cheap, and they've never heard of it, it's more than likely that it's crap.

As for 30-second previews and hearing whole songs on the radio, I say this. I've heard many a song where I couldn't tell if it was any good from the preview, and I've heard many an album where the 2 or 3 songs that played on the radio were the only good ones.

Heartbreaking...

[kzinti]

Whatever happened to artists of integrity, artists like Tom Petty who want their record prices kept low so their fans can afford them?

Re:Heartbreaking...

[frankmu]

i think "they" torched his house to keep him quiet

Apple's competition is not changing...

[B11]

It is still a one-price-for-all on P2P, $0 per song, no DRM, after all...

Wouldn't fly.

[Qbertino]

Imagine the Rolling Stones, REM, Madonna (and her indipendent label) and a handfull of others saying "No go." and opening up their own music plattform with a handfull of experts and some tweaked OSS software. No, the classic "touchable media" based business is rapidly declining and the publishers have finally gotten the message. And they won't get pissy with artists either - it's to easy to turn around and go away when all you need to distribute is a good name, some rackspace and automated electronic billing.

No it's not about that. It's probably about charging different prices at different times and from different people / target groups.

They're all Mafias..

[Flying pig]

I've been indebted for years to an Italian supplier to a company I used to work for who had a simple economic theory. There are producers, and there are mafiosi. A producer is someone whose business produces a real product. A mafiosi is someone who seeks to get in the way and steal some of the income, by creating a climate in which, through fear, legislation or other access control, you have to go to the mafia to get the product. Morally, all mafiosi are equally reprehensible. They steal value on the way from producer to user. In the long term, they depreciate the currency and destroy economies.

Apply this simple idea and you divide up economies pretty quickly.

Oil wells: producers. Oil distribution: Mafiosi
Coca farmers: producers. Drug dealers and legislators who create a shortage and push up prices: Mafiosi.
Musicians: producers. Recording industry, and the legislators who give them what they want: Mafiosi.
Physicians: Producers. Insurance companies and malpractice lawyers - you get it
The interesting thing about mafias is that they are all the same and work in the same way, and that though many of them commit illegal acts, they are rarely prosecuted (and as noted above benefit financially from the laws that make their activities illegal, by pushing up prices.) I'm sure a record exec could move smoothly from handing out brown envelopes to "opinion formers" in the interest of persuading the gullible to buy the latest Mrs. Ritchie, to handing out brown envelopes to bent policement to ignore the foot soldiers on the street corners.

The moral? The job of government is to create fair competition laws that oppose monopolies and trusts, and jail people who break them. Not, as seems to be the case at the moment, to be part of the problem and to pass laws at the behest of de facto cartels like industry trade associations.

Brandy

[ricky_charlet]

You know, I always did hope that Brandy made someone a good wife and that Looking Glass singer/songwriter guy shipwrecked somewhere lonely.

Another Reason

[Steve B]

IMO, attempts to up-price certain tracks are intended to suppress online distribution -- if they can't do it universally, they'll at least try to do it for their latest stars.

The underlying reason they wish to do so (besides the obvious desire to keep their monopoly) is that they're scared to death about what will happen if somebody has another set of independent sales stats. That would make it harder to divert royalties into the coke-and-roofies budget without getting caught.

Don't Bank on it...

[mpapet]

The rationale is flawed from the start. Joel has insightful things to say, but I think he's out of his core expertise here.

-$0.99 was a great, simple marketing pitch. It made selling the idea of losing control over the music you purchase for personal consumption easy to accept.

-Recording industry pretty much soaks up every last dime in record sales. An artist manages to sue a recording label every other year or so because of the cut they *thought* they were getting has complicated renumeration schemes that reduce their per-album royalty to almost zero.

-The recording labels are mad they aren't controlling the price or distribution of the music as they have in the past with CD's. THAT is what they want. They've lost control and they want it back.

-Screw the artist. They can always find another one to replace the troublesome one. How many times has the artist who legitimately threatens their control actually stay in the industry?

-My favorite band from my younger days Fugazi maintained control over the pricing of CD's and shows. (CD's had the price ($10)pre-printed on the back, shows about $10 in L.A.! Totally frozen out of commercial radio, even public radio to *some* degree. They did it, but they didn't "change" the industry and I don't think the recording industry is going to come tumbling down real soon either. They will totally control the majority of digital content because they can.

What's rootkits got to do with it?

[MS-06FZ]

The "we won't promote your music if you don't let us put rootkits on your CDs" kind of leverage.

What does that have to do with this story? What does that have to do with tiered pricing? How is that an example of leverage over artists, when artists aren't the ones most likely to take issue with such measures?

Beyond Econ 101

[rgoldste]

Why do people think themselves well-qualified to pontificate on economic matters with a freshman course in the subject? Econ 101 is only marginally more applicable to the real world than voodoo, with all its assumptions that don't hold true in reality and oversimplifications of complex relationships between actors. Note to future posters madquerading as economists: economic phenomena are not so simple as to be accurately modeled by a basic supply/demand curve; you need systems of partial differential equations to accurately model most phenomena.

That said, even assuming Econ 101 is adequate in this case, you're still wrong. Sure, an auction/fluid pricing system would maximize the seller's profits for that particular event. But a truly rational agent seeking to maximize profit isn't concerned merely about that event, but also looks to the long term (to infinity as a theoretical goal). Under this theory, it could well be profit-maximizing to rake in fewer profits today, even lose money, for bigger gains tomorrow. For example, it could be a good idea to sell tickets to a concert at a low flat rate to encourage a quick sell-out, generating lots of buzz that could enable an encore show.

We know that record labels think in this long-term manner at least sometimes because they invest tons of money on new bands, losing on the first album on the gamble that they'll make money later on. Similarly, the article's hypothesis could be correct if the lables think that artist rebellion is a significant threat to long-term profitability, and this kind of value manipulation can bring the artists back in line. That's a pretty reasonable conjecture.

Re:Beyond Econ 101

[skarth]

Why do people think themselves well-qualified to pontificate on economic matters with a freshman course in the subject?

Are you new here? ;^)

Re:Beyond Econ 101

[Coniptor]

I personally don't give a flying fuck how educated and eloquent you are. It means aboso-fucking-lutely *NOTHING* if your making a point in any context in favor of the likes of the RIAA/MPAA. In their minds and yours they have to make money. In my mind I have to eat and find content which is aligned with my will in everything. If it's not it will not even be considered. I appreciate the most lame posts that are against the RIAA more than I would ever appreciate a post from you or anyone else who essentially says. You know nothing of the foundation of the topic at hand. There for you are not qualified to make money purchase decisions for your self. Here listen to use without using you mind. We are right. We are good. All our naysayers know nothing. See you don't fucking get it. For what ever we don't know we DO have the RIAA/MPAA pegged and nothing you retards have to say will influence any of us except those that are sheep. To you sheep, fuck you! Don't like that? WAKE UP! Like it? I have nothing to say to you, go back to the trough.

Re:Beyond Econ 101

[radl33t]

You're late for pre algebra and I think you're failing English class. Mom will pick you up at 4.

Re:Beyond Econ 101

[John Frink]

You wouldn't believe how useful econ 101 is. For example recently on a call in radio show talking about how farmers are under economic strain one caller suggested that farmers just raise their prices. That is a person that doesn't understand ANYTHING about economics. If i had my way econ 101 would be a requirement in high school.

Independent music

[eclectic4]

Support independent music. It's much better than the crap you hear on the radio anyway...

Give the money to the artists of good music, not to the suits that follow formulas to sell to 12 year olds.

Seriously, for the love of *whatever*, stop enabling them!!!

mod parent up

[evoltap]

Exactly. The only real vote we have is with our money. Don't like high gas prices and wars? Don't give oil companies money! People seem to think that change comes about by simply bitching about things they don't like. INDUSTRIES WON'T CHANGE AS LONG AS WE STILL GIVE THEM MILLIONS OF OUR HARD EARNED DOLLARS. In fact, they will add insult to injury and try to get MORE money out of you.

He has it backwards....

[PierceLabs]

If you "dump" a song down to 0.99 cents, its like to sell MORE units than less. If you want to threaten an artist, threaten to sell his next CD at $2 a song. Then he'll be hurtin.

Nevertheless, all they really need to do is deal with these sorts of issues in the contract and change the royalty rate accordingly.

I got with the manipulation part...

[YesIAmAScript]

But I'm going a different way.

They'll make songs cheaper before they make #1. Why? Because they want the song to be a big seller. Then they raise the price. Make it a hit, then cash in. Heck, make the song $3 and the album $9 to get you to spend the extra money for the album.

I'm sure they have all kinds of plans, all of them manipulative. I wouldn't restrict their potential crassness to a single track.

Lossless Tracks for $1.29 - MusicGiants

[meehawl]

I can't see how Apple can get away for long with charging $1 for muddy sounding 128Kbits lossy when something like MusicGiants is charging only $1.29 for full quality, major label, lossless downloads. If the "premium" between the iTMS low quality and the "full" quality tracks is only 30 cents, then I am missing something. Either MusicGiants will be raising its prices soon, or Apple will be lowering its prices for 128Kbps or upping the quality.

My thinking on this is that if successful, it should prompt Apple to offer lossless downloads from the iTMS Service, if only because Apple likes to present a "high end" image, and having a competitor actively dissing iTMS by lumping it in, quality-wise, with "pirated music from p2p networks" has got to hurt.

Re:Lossless Tracks for $1.29 - MusicGiants

[BlueStrat]

" I can't see how Apple can get away for long with charging $1 for muddy sounding 128Kbits lossy when something like MusicGiants [musicgiants.com] is charging only $1.29 for full quality, major label, lossless downloads [meehawl.com]. If the "premium" between the iTMS low quality and the "full" quality tracks is only 30 cents, then I am missing something. Either MusicGiants will be raising its prices soon, or Apple will be lowering its prices for 128Kbps or upping the quality.

My thinking on this is that if successful, it should prompt Apple to offer lossless downloads from the iTMS Service, if only because Apple likes to present a "high end" image, and having a competitor actively dissing iTMS [musicgiants.com] by lumping it in, quality-wise, with "pirated music from p2p networks" has got to hurt."

I'm wondering why more people don't take advantage of foreign distribution channels that aren't as tied into the RIAA cartel and sell music by the megabyte like allofmp3.com http://www.allofmp3.com/ .

As far as I can tell, there are no laws against buying from allofmp3, despite what the RIAA etc would like people to believe.

I hope the word spreads about such distribution outlets, as this directly impacts the RIAA/labels' bottom lines, and the less they get, the happier I'll be, and the less they'll have in their warchests to influence lawmaking as well as less market control to enslave artists and screw over customers.

Plus, the wide selection of file formats and bitrates that can be customer-specified seems particularly friendly to non-proprietary operating systems and software.

Strat

Re:Lossless Tracks for $1.29 - MusicGiants

[Anonymous Coward]

> , I can load only 120 lossless tunes into my 4GB iPod nano. Wow, 120 songs in my pocket!

That's yuor fault 4 paying to much for such a gay apple POS with fuck all disk space.

Re:Lossless Tracks for $1.29 - MusicGiants

[argent]

As far as I can tell, there are no laws against buying from allofmp3

If that's your only concern, if the only thing that stops you from doing something unethical is "it's illegal", then frankly I don't see much difference between you and the labels. Neither of you has a moral compass to speak of, your only concern is your own self-interest.

Artists might only get a fraction of the cover price of a CD through the major labels, but they don't get anything from allofmp3.com. There's no ethical difference between downloading commercial music from allofmp3 and downloading it illegally via a P2P network. If you don't want your money to go to the labels, then buy different music, or buy directly from the artist. If you don't know how, just type "audioblog" into Google's search box and follow the links.

Re:Lossless Tracks for $1.29 - MusicGiants

[BlueStrat]

"As far as I can tell, there are no laws against buying from allofmp3

If that's your only concern, if the only thing that stops you from doing something unethical is "it's illegal", then frankly I don't see much difference between you and the labels. Neither of you has a moral compass to speak of, your only concern is your own self-interest.

Artists might only get a fraction of the cover price of a CD through the major labels, but they don't get anything from allofmp3.com. There's no ethical difference between downloading commercial music from allofmp3 and downloading it illegally via a P2P network. If you don't want your money to go to the labels, then buy different music, or buy directly from the artist. If you don't know how, just type "audioblog" into Google's search box and follow the links."

First, I *am* an artist, and give away recordings. I make money from music the old way..I perform.

Second, I don't care if other artists are foolish enough to base their income on selling the same performance over and over using an antiquated and corrupt media distribution system. If they choose the "dark side" they also choose the problems that come with it.

Third, if more people refused to keep feeding the music cartels, and the artisits find they can't make a living through the cartels, maybe things will change.

Finally, no, being illegal is not the only thing stopping me from doing something unethical, but we obviously have different definitions of "unethical".

Just because I don't feed the music cartels and reward the artists that are stupid or greedy enough to sign with them doesn't make me unethical, but perhaps you supporting the corrupt system might take your ethics-meter down a few pegs.

Strat

Re:Lossless Tracks for $1.29 - MusicGiants

[argent]

Finally, no, being illegal is not the only thing stopping me from doing something unethical, but we obviously have different definitions of "unethical".

Clearly.

It is your decision to be a performing artist.

It is their decision to be recording artists.

If they choose to participate in a system that distributes music in ways that you do not feel you can ethically support, then you're free to opt out and not buy their music.

But if you're not going to buy their music from them, or through the distribution channels that they have chosen to participate in, then the only ethical option I see is to do without that music.

If you buy their music from the Russian Mafia instead of the RIAA Mafia, all you're doing is supporting a different corrupt system. It seems to me more honest to simply pirate the tracks in defiance of the law.

Just because I don't feed the music cartels and reward the artists that are stupid or greedy enough to sign with them doesn't make me unethical, but perhaps you supporting the corrupt system might take your ethics-meter down a few pegs.

The vast majority of my music collection are tracks by unsigned artists and legal recordings of public performances, many purchased directly from the performers at performances. Where my options are to buy label music or do without, I occasionally choose the labels. But I don't pretend that there's a third option.

Re:Lossless Tracks for $1.29 - MusicGiants

[BlueStrat]

"Finally, no, being illegal is not the only thing stopping me from doing something unethical, but we obviously have different definitions of "unethical".

Clearly.

It is your decision to be a performing artist.

It is their decision to be recording artists.

If they choose to participate in a system that distributes music in ways that you do not feel you can ethically support, then you're free to opt out and not buy their music.

But if you're not going to buy their music from them, or through the distribution channels that they have chosen to participate in, then the only ethical option I see is to do without that music.

If you buy their music from the Russian Mafia instead of the RIAA Mafia, all you're doing is supporting a different corrupt system. It seems to me more honest to simply pirate the tracks in defiance of the law.

Just because I don't feed the music cartels and reward the artists that are stupid or greedy enough to sign with them doesn't make me unethical, but perhaps you supporting the corrupt system might take your ethics-meter down a few pegs.

The vast majority of my music collection are tracks by unsigned artists and legal recordings of public performances, many purchased directly from the performers at performances. Where my options are to buy label music or do without, I occasionally choose the labels. But I don't pretend that there's a third option."

I look at allofmp3.com as simply the world market at work. Markets are much like the internet in that they tend to route around damage, and a cartel like the music industry I consider damage, and the result is sources outside the control of the cartel supplying the demand at costs more in line with perceived value.

The cartels could stop anyone wanting to go to allofmp3.com next week, if they would only leverage the internet and offer the same service and file type/bitrate options, even at a higher price point.

It's not the price that holds any attraction to me, and I'd bet the same is true for many others. It's the ability to specify the file type and bitrate, along with the lack of DRM that is the draw.

The music cartel and U.S. copyright does not apply worldwide, so building a buisiness model around those controls being universal is a mistake.

I feel no remorse at all about using allofmp3.com (note: I have never actually purchased from allofmp3.com..but I would).

If the cartels and artists are determined to shoot themselves in the foot by denying reality, they are free to do so. I'm free to seek out reasonable alternatives if I wish.

I haven't purchased a CD in at least 10 years. All of my music is my own, or freely given to me by fellow artists, or public domain. I've never used P2P or bittorrent, other than for linux/FreeBSD .iso's and OSS software. I have no content I'm not entitled to under law.

I simply feel that things like allofmp3.com are a direct result and totally the responsibility of the music cartels and artists.

Strat

Re:Lossless Tracks for $1.29 - MusicGiants

[argent]

Would you mind using SOME mechanism to indicate what you're quoting and what you're writing? Life's too short.

The point I'm trying to get at is NOT that you should be supporting the RIAA, but that allofmp3 is not ethically superior to just ripping the tracks from a peer-to-peer net.

And... it may be that I DO have content I'm not entitled to under law, because I don't know ofor a fact that none of the artists who have sold their music directly were entitled to do so under their contracts.

And I'm not even going to TRY to defend that kind of contract. Because that's also beside the point.

The bottom line... "allofmp3 is legal" is not equivalent to "allofmp3 is ethical". If anything, you're on firmer ethical ground if you're outright ripping the tracks off.

How long do you plan to live?

[SuperKendall]

$5 a month forever strikes be as excessivly expensive for anything, unless you are 104 on your deathbed.

And that's of course assuming Yahoo stays in the music biz forever as well. When/if they exit because they are not making any money, the $5 a month "investment" for exactly squat is not going to seem like such a good idea.

Tiered pricing? Rootkits?

[AmazingRuss]

I suspect I'm not alone in making the decision that I will never give another dime to the recording industry.

Way to increase revenue....

"Won't promote your CD" leverage

[Ulrich Hobelmann]

Well, so what? That's like giving artists a really shitty deal. Just like every other shitty deal out there, in the long run that'll mean that nobody signs up for those companies any more, especially with good alternative labels out there.

Music Mafia go home!

The deal

[SuperKendall]

The theory though is that consumers will go looking through the $2.99 music first, thinking of that as "new" and ingoring for the most part the .99 stuff unless they are looking for something specific.

There is something to what you say but a lot of people actually would feel more compelled to look at "newer" music regardless of price.

Of course since Apple has a "new releases" section and also reccomendations based on artists, I don't think the trick would work as well online as it would in a store.

Joel should stick to software

[inchhigh]

Joel is off on this one. This IS about the record companies desire to increase revenue from the digital download sector. There is a HINT of what the Joel is saying within the motivation for mutil tiered pricing, but, but gaining more pricing flexibility in this early stage of the game is more what Big Music wants.

Big Music wants to be able to call all the shots, especially in an area like price which figures so heavily into the profit equation. When they signed up with Apple the first time, they never imagined that Apple would go on to dominate the landscape in the fashion that they have. Apple currently is the one setting the prices, they don't like that, plain and simple.

nothing to see here.... keep moving

Oh please...

[Anonymous Coward]

What will happen if a supposed 1.50 song is released at .99? More of it will sell and it will be considered a bargain.

The "percieved value" argument only works at the post-$1000 pricepoint. A Carl's burger isn't better than a McDonalds burger because it costs more (though it does cost more). It's better because there's more meat and it tastes good.

Sorry, I'm confused...

[The Master Control P]

Was anyone thinking that the music labels wanted tiered pricing because they thought it would be better for anyone but themselves? /laughs hysterically. That they would use thier power not to screw as many people as hard as possible but to help thier victims^Wartists? /laughs so hard my sides hurt.

They are corporations owned and controlled by people who know that the internet makes them redundant and shortly will make them irrelevant, as artists warm up to internet distribution. And like all evil people faced with what they see as a problem, they will try to preserve the status quo and not care how many people they hurt in the process (- we are here). Then they will go down in flames, cursing and blaming everyone but themselves the whole time (- eagerly looking forward to it).

So Simple...

[screaser]

I'll try to never buy any song priced over $0.99 if this happens. If you're all with me, problem solved.

probably been said before but

[whathappenedtomonday]

worth mentioning again: just one more reason to finally get rid of the music industry as we know it and rebuild it our way.

yeah, well

[digitalsushi]

when people say "they dont realize this" i sometimes wonder, "don't they?" i realize i am going to get old and die off... there's not much to do about it but i keep on doing my thing anyways.

Bullshit

[brass1]

The labels aren't that smart. It won't work anyway. Major media empires have only been successful on the Innernet when their content has been interesting to the Innernet consuming public.

Now a days if you put out shit, we treat it like shit. On the Innernet The Man can not decide what you like and do not like.

Re:Bullshit

[argent]

The labels aren't that smart. It won't work anyway.

The labels aren't smart enough to do something stupid?

Damn, and I thought I was cynical.

this is news?

[floodo1]

this wasnt blatantly obvious when they announced the tiered pricing?
everyone i told that to went "so they caved in to the record labels?"

Phi 1:18

[ketsugi]

/. seems to be an odd place to be having a religious discussion, but what do you think of Paul's words in Phillipians 1:18 in the context of these "fake" Christian bands? "But what does it matter? The important thing is that in every way, whether from false motives or true, Christ is preached. And because of this I rejoice." The assumption is, of course, that The Word is being preached properly, even if for the wrong reasons.

The true question....

[zymurgy_cat]

...is what does Joel have against the band Looking Glass? Brandy (You're a fine girl) was a cool song. Everyone knows that!

Christian music...

[SonicSpike]

I am big into Christian music and work in the industry every once in a while.

Check out my website and zip me an e-mail:

http://www.ultrasonicdesigns.com/

You've grasped the essence if it.

[crovira]

The iPod WITHOUT a iTunesMusicStore wouldn't be WORTH any more than any other player. It couldn't COST any more either.

Apple is able to command the prices it changes for the iPod because the entire package is actually worth it.

Also, with the podcasting revolution, content is becoming available from unusual sources for unusual uses, not just ditties. (One person's music is just another person's noise.)

----

I was using a wiki for all my ideas and getting no traction. Nobody cares about software development, or so it seemed. Also its hard to index the content of my database, no?

So I've shifted media and I've started blogging and podcasting, and I'm about to start vodcasting, (vod = video on demand,) though what I've been able to achieve with just pictures using PodcastAV is pretty impressive.)

Thinking up stuff and writing on a wiki is one thing but getting the blog out there (for the real information) and a podcast out there (for clarification and additional information,) and promoting it through iTunes is the bending end.

I recommend http://screencastsonline.com/ for great instructional info. It is really inspirational too.

I found out everything I actually needed to know about RSS feeds, podcast production, distribution and promotion through iTunesMusicStore.

I'm going to blow my own horn. :-)

I am now officially OiRc (Objects, instances; Relationships, connections) on http://oirc.blogspot.com/ http://oirc.libsyn.com/ and the OiRc Podcast on the iTunesMusicStore.

And now that the tests have all worked, I'm going to record 'casts for all the episodes.

----

From a McLuhanistic point of view, this medium is fantastic.

Its both cold, as print and sitting passively consuming movies in a theater was/is, and hot as television was supposed to be, with community TV I guess.

But with narrow casting of the information I want to share, but only with the individuals who can act on it, leaving the rest of the world blissfully unaware, I believe that podcasting is a real revolution in the media.

The barrier to entry has falled from multi-million dollar studios and specialized staff down to my Macintoshes and my ideas.

No I am not going to change the world.

No I'm not going to become rich and famous (through I can hope for some recognition.)

But if some people in the world of software development can at least hear and take notice of my ideas, even if they tell me I'm full of shit (I know I'm not,) I'll be satisfied.

Own Brand pricing

[blackest_k]

just concidering the food industry here when you have a product like say chicken soup a factory might be producing chicken soup for 10 different brands. trust me it is not the same chicken soup. Each run for a particular brand uses its own mix of ingredients. Cheaper ingredients do make cheaper products.

All produce gets rated for quality the best goes in the veg section of your supermarket-Standards vary between supermarkets. In the UK the best quality available goes to Marks & Spencer.

The worst quality of all are ingredients for packet soup
baby food is pretty low too-(its all mush and a baby knows no better and can't really complain).

As a general rule of thumb if a food has been processed your generally buying lower quality than if you buy fresh and if its pieces the smaller they are then the more likely the original was in poor shape.

unfortunately for me I have too much experience of food factorys.

Poland which did have high quality food, is now getting clobbered by companies like smithfield.

http://www.organicfood.co.uk/stories/polandinvasio n.html

Before eating anything it might be worth thinking do I really want to eat that, you are what you eat and its your choice of products which govern what gets produced.

The only way it would work

[HalAtWork]

The only way it would work is if songs were introduced at a neutral price level, and song prices were based on the % of userbase that purchased the song. Songs would have to launch cheap because they wouldn't be popular yet, and price would have to be relative to % of userbase that purchased it because that's the only way to realistically determine how popular it is.

Sounds like the method they're using is just a price gouge, launching at high prices and having popularity determined by arbitrary means.

As the old saying goes...

[87C751]

You've got your whole life to write your first album, and 12 months to write the second one. Back when I was a working musician, the common wisdom was "don't even look for a contract unless you have 3 albums' worth of solid material."

Misleading Headline!

[iRikk]

I see Slashdot has gone the way of the mainstream media... using untrue headlines to attract readers. Shame on you. I just left the ITMS and guess what? No tiered pricing! Same old 99 cent per song cost. So why not just give it a break and wait to see what Steve Jobs has up his sleeve. He's been pretty friggin' acccurate so far which is more than can be said for just about evereyopne else that's trying to cash in on the music/video markets! He's at least had the cajones to take the record companies head on. Everyone that believes the major labels are obsolete and exist solely to rip off the artists should be getting in line to support Apple and the ITMS in what is surely going to be a major fight.

Poet

[Anonymous Coward]

Faggots speak
For the weak

Madonna's label is not independent. Maverick=RIAA

[dave1212]

Madonna's label is not independent. Maverick Records is full-on RIAA.

And she would never leave the safety of her major-label daddies.

I Just Figured It Out

[Anonymous Coward]

I just figured it out - not how to make more money off iTMS, but how to make lots of money with a useless blog blathering useless blather.

Create paranoia - stir the pot, whip up the masses.

And let my faggot homo friends do the rest.

PS. Today's word was 'hubris'.

Another Doomed Technological forecast

[Anonymous Coward]

As self-replicating fabricators rapidly spread to thousands and then millions of people

Self replicators usually aren't designed to work completely from raw material feedstocks. Silicon wafer fabrication and etching is pretty specialized; it will be a long while before anything like this can make even a 486 computer. Add in that it's not expected for home use by 2025 and the energy crisis we'll need to face by then; it should be clear that the current music industry skirmish will be settled by other social technologies, one way or another.

Those who do not study their court settlements...

[abb3w]

It was a trademark issue. I can't see any trademark-related reason why Apple can't start a wholly-owned label called "iTunes Records" or the like as long as no Apple logo appears on the packaging.

The settlement agreement over the original trademark issue included terms saying Apple Computer would not enter the music business. AppleComp paid additional money out to AppleCorp in the early 90s, when they started producing computers that could play music from the speakers. The lawyers are currently talking; rumors about the settlement say it may involve BILLIONS in cash, large blocks of AppleComp stock, and a possible seat on Apple's board for McCartney, but only time (and a careful examination of the Apple quarterly SEC reports) will tell.

Starting their own record label might be possible after the new agreement, but before then it would be a blatant violation of the existing agreement about not entering the music business.

Re:Those who do not study their court settlements.

[tepples]

Starting their own record label might be possible after the new agreement, but before then it would be a blatant violation of the existing agreement about not entering the music business.

Were the exact terms of the original agreement published, or were they kept confidential? Under the original agreement, would it have been a violation for Apple Computer to own stock in Sony Corporation, given that Sony owns Sony BMG (a major record label)?

GENIUS

[oboreruhito]

I said it in the last thread, I'll say it again: Crap music will make the music I like cheaper! Steve Jobs is a FRICKIN' GENIUS. GEE-NYUS, brother, GEE-NYUS. You pay your $3 for Hollaback Girl, the Diddy Remix with Christina Aguilera's husband! I'll get my goddamned Deerhoof for .50 frigign' cents now! THAT IS BRILLIANT.

Read the "fine" summary...

[argent]

Geeze. Not only didn't you RTFA, you didn't RTFS.

Re:Read the "fine" summary...

[iRikk]

Huh? Sorry, but I've been out of the military far too long and am not current on the many new acronyms... can only reply WTF! to your RTFA & RTFS references. Forgive me if I've omehow sinned. Yikes.

Re:Read the "fine" summary...

[argent]

Read
The
"Fine"
Article

The third word is actually not "Fine", but if you were in the military you'll be able to figure it out.

Re:Read the "fine" summary...

[iRikk]

Well since you've decided to get nasty, fine. I did read the friggin article and the friggin summary... there's not a single word in there that would justify a completely misleading headline like: "The Real Reason Behind iTMS Tiered Pricing" That statement implies that there is already tiered pricing at iTMS and there isn't! So give it a figgin break and concentrate on something you actually have a clue on. "The Real Reason Behind the Push for Tiered Pricing at iTMS" more appropriately and truthfully describes the contents of the actual posted article. Now go play with people your own age.

Re:Read the "fine" summary...

[argent]

That statement implies that there is already tiered pricing at iTMS and there isn't!

The statement doesn't imply anything about the current pricing at iTMS. Any such conclusion is an inference on the part of the reader, because the possibility that Apple would have introduced tiered pricing at iTMS without at least *three* duplicate articles breathlessly announcing the fact is so remote that the possibility never entered my head.

So, I inferred that you were simply reacting to the headline.

Obviously my inference was as fallacious as yours.

Re:Read the "fine" summary...

[iRikk]

Yeah, okay, whatever. I guess I stand corrected, my degrees in journalism from William James College and Northwestern have obviously failed me... and the twenty three years spent working as a broadcast journalist have been a complete waste. All this time I've been operating under the assumption that the purpose of a headline is to encapsulate the crux of the article and to further intrigue the reader into additional interest in the story. Damn, my bad for being so mistaken. By the way, FWIW, the root of the word "fallacious" lays in deception and guile... to my knowledge, only Fox News still adheres to this... and it's not restricted to their headlines. Oh and one more thing... regarding the "inference..." er, how can there be a reason (as in The Real Reason Behind iTMS Tiered Pricing) for something (pricing) that doesn't exist? Peace, calmseas & Thanksgiving... out.

I don't have a golden ear... besides...

[argent]

We use Microsoft Windows Media Digital Rights Management software to make sure all the music you have is fast, safe and protected. For more information about Microsoft DRM, click here.

Won't play on any open systems or open source operating system, won't play in any open-source player, can't be burned to an audio CD, won't play in either of my MP3 players (only one of which is an iPod), won't even play on Windows 2000 unless I agree to let Microsoft install a rootkit called Windows Media Player 9 (Windows XP comes with Microsoft's rootkit pre-installed, which is another reason I'm sticking with Windows 2000 for my game console).

Since I don't have a Golden Ear, I'll stick with the honor-system DRM that iTMS uses, or buy physical CDs since they're often cheaper than iTMS for classical music, and there's a much better range available, and the great stuff I find on audioblogs is rarely available through label-driven digital music stores anyway.

For more information about Microsoft DRM, click here.

Did you read the article?

[argent]

The recording labels are mad they aren't controlling the price or distribution of the music as they have in the past with CD's. THAT is what they want. They've lost control and they want it back.

Erm, that's basically what Joel is saying.

You forget the past history of Hyundai

[Buran]

But they didn't always make "better" cars than Toyota (I don't think they do even now, but they are good enough now that I recommend them to people).

When they first sold cars in the US, they were terrible -- and first impressions are hard to get over. It's only been relatively recently that Hyundai has had a good reputation for long enough that they are now seen in a positive light by enough buyers.