Slashdot Mirror
Apple Sets Tune for Pricing of Song Downloads
PygmySurfer writes "Apple Computer on Monday revealed it had renewed contracts with the four largest record companies to sell songs through its iTunes digital store at 99 cents each. The agreements came after months of bargaining, and were a defeat for music companies that had been pushing for a variable pricing model."
Funnypics
the shortsighted me says horray for only having to pay $.99 a song still. i don't listen to the farsighted me.
but big label artists are still being boned.
/Big four record Labels "slip sliding away"
As long as older songs are less than $0.99, I wouldn't really mind. A dollar a song still seems a bit much. I'd rather just send the money to the artist instead. At least they get more money that way.
Anything that pisses off the RIAA im all for :)
---- Booth was a patriot ----
I call you when I need you, my hearts on fire
You come to me, come to me wild and wild
When you come to me
Give me every song I need
Give me a lifetime of DRM and a world of corporate music
You speak of giving the artist his fair share like you know what it means
And it can't be wrong
Take my iMac and make it strong baby
You're simply the best, better than all the rest
Better than Napster, Any of pieces of crap I've ever used
I'm stuck on your heart, and hang on every song you sing
Tear us apart, fuck RealPlayer, I would rather be dead
In your threads I see the encrypted bits of every song and every book I play
In your interface I get lost, I get washed away
Just as long as I'm here in your crappy GUI
I could be in no better place
You're simply the best, better than all the rest
Better than Napster, Any of pieces of crap I've ever used
I'm stuck on your heart, and hang on every song you sing
Tear us apart, fuck RealPlayer, I would rather be dead
Each time my Mac bombs I start losing control
You're walking away with my music and I can't get it back because I can't download the song again
I can feel your restrictions even when I'm asleep
Oh baby, don't give me any rights
$0.99 is far above my threshhold for a lossy, DRM-laden song. I realize that as long as Apple has to pay the record companies on the order of $0.70/song, the price will never become reasonable. Considering the low distribution cost to the record companies, they could sell these at half the cost and make a LOT more money -- on volume.
But that's not gonna happen.
Ignorance killed the cat. Curiosity was framed.
(note: I am not an iTMS customer. I don't even own an iPod)
Everything I have seen/heard/etc about the iTunes store is that it is simple.
People like simple. That's it. Why do companies not get this? How many people's VCR clocks blink 12:00 becuase (to them) it is too hard to actually set it?
Now, Apple is on to something with their pricing model. It is simple. Sure, some older songs are probably not worth as much and some newer songs might be worth more, but overall it is a good balance. It's simple. They would likely lose more revenue by going a variable (and more complex) pricing model than they do by not squeezing those last few cents out of the most popular songs.
for the time being, the labels need Apple more than Apple needs the labels. Now, if Apple begins to bank too heavily on the iPod and neglects their other profit centers, that might change. But for now, Apple has a lot of leverage, which just goes to show why the music industry has always fought to maintain control of distribution.
The higher the technology, the sharper that two-edged sword.
After the Sony DRM debacle, I've ruled out CD-based media altogether.
Say what you will about Apple DRM, but at least it's honest - and doesn't attempt to sabotage my CPUs. Good to know my pricing hasn't gone haywire in the near-term. For those who think that variable pricing is the way to go (except for whole albums) check out the raging success story that is google video. They're pay model is so - easy to understand - and easy to work with - no one I know is using it.
I'd say that's a ringing endorsement for keeping it simple.
We hear so often that variable pricing is good. I think it's interesting that newly released music is commonly considered more valuable just by virtue of being new. This particularly applies to covers, rehashes, etc.
is that people think the iTunes Music Store is somehow "sticking it to the RIAA." Nothing is further from the truth. While the RIAA may be accepting some losses, their goal is simple: to use companies like Apple to transfer music into a different medium, not a physical one, but one stronly resembling IP. Music no longer is something you can buy and physically own, it's something you can "license" to listen to on expensive (and DRM-secure) MP3 players of the future.
I'm sorry, but $.99 is still way too much for a compressed, restricted pop single from an artist I don't even want to listen to.
his secret? he just said, "no"
-- lol pwned
Not all negotiations result in COMPROMISE (which is what you've described). I can negotiate with no leverage whatsoever, get nothing, lose everything and still have negotiated. Cheers, Sam
Side note: what is Apple going to do about the French lawsuit?
I'm glad to see that Mr. Jobs got his way and the labels are forced to continue with the current pricing model. I'd like to see some expanded quality options, however. How does Jobs feel about selling the same song at a higher price if it's higher quality or lossless?
I don't own an iPod, and I still buy my music the old-fashioned way. Well, the kinda old-fashioned way. Involving a shiny disk.
What I want from a music download is for them to track what songs I have licensed/paid for and store that on their servers so I don't have to worry about keeping track of my song collection. I don't want to have to worry about whether I have a backup copy of 300 songs when my harddrive goes on the fritz and I don't want to have to spend a weekend figuring out what I need to save off and what can be erased when I decide to upgrade machines. I don't want to have to worry about how many times I've burned a song to CD. I don't EVER want to have to worry about having to re-purchase a song because I've lost my copy.
That's when I'll get involved in a music download service.
Runesabre
Enspira Online
You guys can stop complaining about .99 being too much. It's obviously far out of Apple's hands. I think we should put our hands together than thank Steve for fighting The Man. (And don't stay Steve is The Man... because he is, but he damn well isn't, too)
Now most of them are changing their tunes. They were saying before that Apple couldn't/wouldn't stand up to the labels over their pricing plan. Now they're all saying that $0.99 is just too much. Well, good luck finding the singles of the sam quality for less. Why not just admit that Apple has a good thing with the iTunes Music Store?
The big labels had absolutely no leverage unless they were willing to "go on strike" and cut Itunes off altogether. Given the numbers that Itunes has been pumping for the labels, the result (after the requisite bluster) was a forgone conclusion.
However, you can bet your ass that the labels are colluding to cut Apple out of the pie after getting a very public caning.
Cheers,
At last count, the breakdown of where that $.99 goes is (on average):
Apple - $.35
Label - $.53
Artist - $.11
And thats only after the label reclaims whatever they claim they spent in production costs.
See http://www.downhillbattle.org/itunes/ for details.
So they could charge more money for the hottest, newest songs.
They lost on that.
And they couldn't pull their catalogs from iTunes because that would hurt their sales.
When they can't afford to pull their product and cannot get concessions on the price, that is "losing".
Considering supply/demand, there is absolutely no reason a song should cost more because it's popular (besides bandwidth costs). It took absolutely no more effort on the RIAA's part or any Label's part to create it, and it can be distributed theoretically to an infinite amount of people from a single copy. It would have been a purely artificial inflation that's tantamount to price fixing.
... maximize profits.
Profit Maximization and its importance is taught in econ classes, and the sales crowd give it a rather exagerrated importance, but the fact that the 'market' is in fact people which have a tendency to behave according to their own choosing and not as mindless drones of the 'invisible hand' is not.
They always go for getting the maximum profit achievable with a given or minimum quantity of sales. The very thought at the end does not deliver what they want to get indeed :
If you make an easily obtainable/copyable product overpriced, you pump up piracy, or at the least unwillingness to buy your products in the target crowd.
How many of us would think 'well, its just nothing, let me get 5-10 songs tonight' if the price per song was $5 or $10 ? or would any of us get a 'cheaper' song because the song we wanted was priced much higher ? is it that simple that we are going to get the 'best obtainable' from the songs provided ? a sheer stupidity scratch for the marketing crowd ? yes .
Not only the 'profit maximizing' concept actually hampers the profits, but it also shatters market reach and market control - which is something priceless in most respects. Sell a song for just $0.10, and youll get hordes of people buying songs because 'its just nothing' in price - youll become a net standard.
Sell them for $5, and youll get piracy.
Read radical news here
Price as Signal
... so Econ 101 says they should lower the price and try to get a few more bucks filling up the theater with price-sensitive moviegoers.
Forbes: "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."
The story they're trying to tell you is that "older, less popular songs could be discounted, and in-demand singles could go for more than a dollar."
Let's think this through, because I think the recording industry is lying about why they want different prices.
Before I start with that, have you ever noticed that movie theaters charge the same price for all movies, whether they are Steven Spielberg blockbusters or crappy John Travolta religious quackery disguised as science fiction that nobody in their right mind would want to see?
Theoretically, when a super-duper-blockbuster comes out, like, say, Lord of the Rings, there's so much demand that the movie theaters just end up turning people away. Econ 101 says that they should raise the price on these ultra-popular movies. As long as the movie is sold out, why not jack up the price and make more money?
Similarly, when stinkers like Lesbian Gangster Yoga with Ben Affleck come out, the movie theatre is going to be pretty much empty anyway
And indeed this is what the recording industry is telling you that they want to do on iTunes. But they don't do it in movie theaters. Why not?
The answer is that pricing sends a signal. People have come to believe that "you get what you pay for." If you lowered the price of a movie, people would immediately infer from the low price that it's a crappy movie and they wouldn't go see it. If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway. The entertainment industry has to maintain a straight face and tell you that Gigli or Battlefield Earth are every bit as valuable as Wedding Crashers or Star Wars or nobody will go see them.
Now, the reason the music recording industry wants different prices has nothing to do with making a premium on the best songs. What they really want is a system they can manipulate to send signals about what songs are worth, and thus what songs you should buy. I assure you that when really bad songs come out, as long as they're new and the recording industry wants to promote those songs, they'll charge the full $2.49 or whatever it is to send a fake signal that the songs are better than they really are. It's the same reason we've had to put up with crappy radio for the last few decades: the music industry promotes what they want to promote, whether it's good or bad, and the main reason they want to promote something is because that's a bargaining chip they can use in their negotiations with artists.
Here's the dream world for the EMI Group, Sony/BMG, etc.: there are two prices for songs on iTunes, say, $2.49 and $0.99. All the new releases come out at $2.49. Some classic rock (Sweet Home Alabama) is at $2.49. Unwanted, old, crap, like, say, Brandy (You're A Fine Girl) -- the crap we only know because it was pushed on us in the 70s by paid-off disk jockeys -- would be deliberately priced at $0.99 to send a clear message that $0.99 = crap.
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.
And Apple? Apple wants the signaling to come from what they promote on the front page of the iTunes Music Store. In the battle between Apple and the recording industry over who gets to manipulate what songs you buy, Apple (like movie theaters) is going to be in f
I WISH people would 'get' that they don't HAVE to support DRM and the evil record companies.
allofmp3 (russia) does pay fees to artists (based on russian law, essentially a radio play fee for each downloaded song). but YOU get to decide if it has compression or if its flac or wav or whatever. all files are properly tagged and seem quite high quality (I've spent a few hundred $$ on that site - and I'll probably spend more, too).
when the cost of a WHOLE ALBUM is about a buck or so, why on earth would I pay 10x that for DRM versions??
boggle.
even if the itunes store was to price-match - it still has evil DRM. I will never ever buy any song that has DRM in it.
--
"It is now safe to switch off your computer."
It's too bad the contracts are only for four years...so we'll see this whole senseless charade again soon enough.
I had thought Apple might try to secure a longer term deal with the labels (maybe agreeing to a pcrice increase with inflation or something). My plan at Apple would be:
(1) Negotiate long-term deal with the labels (10 years or more).
(2) Spend the next year either inking a deal with Apple Records and the Beatles, winning the lawsuit, or buying them outright.
(3) Convince one or two BIG artists to sell directly themselves with Apple as the distributor. Offer them like 50% of the proceeds of sales, and sell through the iTunes Music Store exclusively, with possible physical distribution at Apple Stores.
(4) Other smaller artists take notice, and an Apple label (maybe not named 'Apple' if the Beatles situation can't be won) suddenly begins to gain momentum, and fuck over the labels in the process (which would make me rather happy).
(5) Profit.
You could throw another step in there, since Jobs is Disney's largest shareholder. Apple and Jobs could buy Disney outright, and gain some record distribution and music IP themselves, which they could immediately market at a different standard than the labels who "won't play nice". Then they could sign artists to Buena Vista Music or whatever.
I know, I know, the prospect of Apple having this kind of media control is a bit scary. But personally, I don't fear it because I believe all music and video is destined to be free ("pirated", if you want), anyway...but I would sure like to see someone (Apple would be fine) bend those record industry jerks over and do to them what they've been doing to us for the past 40 years.
I feel so much better after a nice diatribe...
gameDB
So much for the tired old line that I've heard way too often:
"If Apple gets into power they will abuse it just like Microsoft."
I can't wait for those people to admit they were dead wrong.
I wonder if the record companies will release fewer songs to Apple in the future, just so they can charge $1.99, or $2.49, or $n+1 later, on their own bitc...er, affiliates elsewhere.
These are some of the things molecules do...... given 4 billion years -Carl Sagan
I know it would still be a bit overpriced, but I would at least consider paying $0.99 for a downloadable copy of The Last Samurai in HD, or the latest edition of Microsoft Office if Apple would add movies and software to iTunes, too.
In problem solving/negotiation, you have compromises, in which the issue ends but nobody actually gets exactly what they wanted, a win-win, in which both parties get what they wanted (usually by understanding the actual things each party is after and finding a lateral solution instead of the midpoint) , and a shafting, in which one party gets what it wanted and the other thinks it has compromised. Music giants have wanted tiered pricing for a long time, and have succeeded in implementing it in some services. we know they wanted that and they concede they didn't get it. So they have compromised because they stil want the revenue they were getting. We don't know for sure what Jobs/Apple went into negotiations looking for, but the fact that they didn't even cop a price rise from three years ago suggests that they probably got a lot closer to what they wanted.
All available data suggest that regardless of any of this, the sun will still come up tomorrow.
People make it seem like iTunes is on our side against the big record companies or something. It's not. If the RIAA companies really disliked iTunes, they could stop iTunes from selling their songs any time. The RIAA likes iTunes. Sure, they would like to make even more money from it, but they make plenty now as well. All this "fighting" between Jobs and RIAA is just a show.
To make it simple, Apple and RIAA are in bed with each other. They just can't decide who's to be on top.
Pay money for music? People are still doing that?
I don't know of any at the moment but it can't be that hard to setup a site that allows the consumer to download with payment and the artist to setup a simple pay-per-click marketing campaign. I'm sure the artist can get more than 0.11 cents out of the dollar.
... is not so much that it's taking *money* away from the RIAA/metallica (that can come later), but that it's taking some degree of *POWER* away from the RIAA/metallica. It used to be that the music cartel held all of the cards, so to speak, and technology companies got boned (See the old-school incarnation of Napster.) But online music and iPods are not going away. And Steve Jobs just wrested that much more CONTROL away from the RIAA/metallica types.
A few years down, Apple is going to represent a larger and more important part of the sales pie. That will give Jobs more leverage than ever against the RIAA. He'll be able to, in effect, say to them: "These songs WILL be sold at $.99, or you will NOT be sold through iTMS." And iTunes will have grown that much more that the threat will stick.
And once Jobs has the power and control wrested from the RIAA/metallica, THEN you start diverting the greater share of the money away from them and into Apple's hands....
cya,
john
Imagine all the people...
My label (being owned by me) gives me a 100% share of (what Apple gives us) in iTunes sales. The artist should have known what they were getting into when the signed on the dotted line.
Of course the labels told me to "GO AWAY!", which is why I founded my own label...
Lots of folks in New Jersey and Las Vegas do it all the time. Its called book-making or handicapping. Tony Soprano types -- if there is such a thing that's even remotely close to what HBO portrays -- could probably rattle off such a process pretty quickly.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
Ten years is an eternity in this business. Four years ago, barely anyone bought music online the way they do now. Not to mention that inflation would erode $0.99 over that period significantly, and there's a great chance that we won't even buy media that way in ten years.
Some day I'd like to see more Creative Commons labels gain a bit more popularity, a nice simple alternative to commercial labels where the artists get paid on donations from people who liked their stuff. Until better bands start showing up there, I'll stick with my buck an album at AllOf for MP3s that do not limit me.
Apple doesn't pay any money to the RIAA when a song is sold on iTMS. They pay the record company
"RIAA" is a metonym for the major record labels and the largest minor record labels, all of which are members of RIAA.
I've heard of several accounts where someone had lost all their music, phoned Apple in desperation, and been given the right to download what they had already purchased.
I think Apple just don't want the administrative overhead (for no extra value to them) and there may also be legal issues with promising that sort of thing - or maybe they just don't want to set the precedent...
Still, I've heard it 3 or 4 times now from different people, and though I hope I'll never need it, it's nice to think there's *some* backup for my music on Apple's databases. It doesn't protect my ripped CD music, but at least I could get what I'd paid for...
Simon
Physicists get Hadrons!
greedy corporate america gets told to "stuff it"
Of the five companies involved in this negotiation (Apple Computer, Sony BMG Music Entertainment, Warner Music Group, Universal Music Group, and EMI Group), only Apple Computer and Warner Music are American corporations. Sony is Japanese; Universal is owned by Vivendi, which is French; and EMI is English.
I purchase all of my music from the used CD store. While I understand that I am helping to create a market for second hand CDs, thus reducing the risk of purchasing new music for others, I am also getting the full CD experience at a price I find acceptable while supporting the RIAA only indirectly. It's a compromise that I like.
Anyhoo, when I buy used CDs I get them anywhere from $5-$12 per CD, and I average something like $7.50 after tax. It's a bit harder to figure the average number of tracks per CD though, but it's certainly more than 10. Also, I have some choice in how I skew the numbers. CDs I'm confident in and are hard to find, I'll spend more on. Artists I'm less familiar with, I spend less on, and if I can't get them at a price I find acceptable, I pass, plain and simple. But the stock changes continuously, so I'll keep checking. It's not unusual to find the same CD marked at $5, $7, and $8 or some such, so there's reason to believe you might find it cheaper at a later time.
If I have reason to believe that the album tracks by a given artist suck, then I stick to hits compilations. But I delight in finding hidden treasures, so I try and get albums. The more recent artists who don't have compilations also tend to sell for cheaper anyway, so it works out.
As an example, last week I got 7 CDs: 3@$10, 2@$7, and 2@$5. The $10 items were things that are hard to find (Rolling Stones and Radiohead), and the $7 were by an artist I like and a friend recommended, and the $5 items were by an artist I wanted to explore and my friend strongly recommended. With a 10% frequent shopper discount, sales tax, it worked out right in line with my $7.50 average. I haven't done a track count, but I'll guess that I averaged $.60 a track. This is for unencumbered, non-lossy-compressed, works-everywhere, full case and sleeve CDs.
Granted, I do a little leg work to track this stuff down, but for me that's part of the fun. Also, every single time I've gone to the ITMS looking for something, they haven't had it. Good selection or no, a download service has to compete with this market. I don't know how big this market is, so maybe it's no big deal. But I get a lot of CDs ( > 100/year), so this average cost is very important to me. If you only want a handful of songs every year, then it just really doesn't matter much, the difference between $.50 and $.99 and $1.99 per song.
Now if the RIAA and MPAA would offer indemnity to anyone who promises to legally obtain all future music and movies. EG, any mp3s or movies you may have downloaded in the past (and presumably destroyed) could not be used against you. Then you'd have a bunch of people that are all of a sudden on a clean slate.
what is the statute of limitations on downloads anyway? EG RIAA/MPAA discovers you downloaded a few gb of mp3s in your college days, but its 5 years later?
I once bought an album off walmarts online site and realized that it was missing almost 1/3 of the songs
Did the lyrics to these 1/3 of songs contain the word "fuck"? I've read that Wal-Mart generally does not approve of lyrics that contain "fuck".
I don't understand why this shit is even popular???
At $0.99 per track, for a crappy quality download? You are better off buying the CD. All these places can go stuff it, until they're offering a lossless copy of the CD at less than the price of a CD... otherwise, I'll just keep getting the CDs I like and ripping as FLAC... wait does ipod even support flac? Bah... what a bunch of crap. all of it. bah humbug. I like my iaudio, usb hd flac (and ogg) supporting media player...
I'd be glad to live in a capitalist country, but such a thing simply doesn't exist. Instead, the United Airlines of the world sucker stockholders and employees to dump their life's savings into the company. Then, every so often, those at the helm shake the ship into their pockets and move on to raid other corporate coffers. Leaving us, the guys at the bottom, out cold.
don't forget magnatune!
Spoon not. Fork, or fork not. There is no spoon.
there is no way a major label will let you give all the money to the artist directly. the label, in theory, spends a ton of money promoting and recording artists and has to make sure all the revenue goes through them. buying a CD in a store, or downloading it from iTunes is not going to matter in the end. the artist will probably get the same amount. major labels do everything to protect their investment. these days most contracts include majority control over the music, a chunk of merchandise and even control of the band's website.
if you want to support an artist directly, you have to find an artist releasing their music themselves and buying it directly from them (physically, off their website etc), or buy a t-shirt or something.
as much as it sucks, if artists did not agree to sign those major label contracts, the industry would, in theory, change. i suppose most artists are totally replaceable and know there are a thousand people behind them that would be more than willing to sign anything. it's rare for artists to have much leverage in those situations unless they are super super super huge, and often those artists are locked into super long-term contracts already.
I don't think you or the RIAA necessarily have it completely right. Basically, you are railing against the name of the very concept that you are advocating, which puzzles me, unless there is a different name I am not remembering.
Profit maximization isn't about maximizing the profit per-unit but maximizing the total profit, sales volume in units times net profit per unit. Sometimes to maximize profits, you reduce the prices, sometimes, you increase them. It really depends on how the market responds and what volume you can sell. If maximizing profit means increasing the prices, whether "piracy" is increased is not the issue, the hypothetical total net profit/sales volume curve is supposed to take that into account.
Still, how many units would have sold at a different price is always a bit of a guess.
For a 99 cent sale, Apple pays the copyright owner 70 cents.
What the copyright owner chooses to do with that 70 cents is up to them.
If the artist sold their life, soul, and music over to a huge label in return for a massive advance, then the label is now the copyright owner (NOT the artist), and the label might pay the artist a pittance of that 70 cents. (Every contract between label and artist is different, and Apple has nothing to do with that.)
If the artist did not sell their soul to a label, then they are still the copyright owner, and the artist gets to keep the entire 70 cents.
I admire the Downward Battle guys in some ways, but their protest is misguided when they try to make Apple look like the bad guy because an artist chose to sell the rights to their music over to a big label.
It was the artist's choice give up ownership of their music. They could have remained independent but they chose the big up-front advance in return for no longer owning their own music.
I've spent some $ on iTunes. Hate the DRM, not a huge fan of mp3 (vinyl: new thing the cool kids are into), but .99 is just right for an impulse buy.
However,
The search engine blows. Having to find a Kelly Clarkson song for a young student (she's 10) I couldn't type Kelly Clarkson into the search. Had to go to the pop charts and follow a diffent hit. Get it together or have google do the indexing.
Physics is like sex: sure, it may give some practical results, but that's not why we do it.
No, the labels honestly chafe at playing the Apple game and would be gone in a heartbeat - if it did not mean letting go of a revenue stream pulling in tens of millions per year (heck, by now that might be per-month). They simply cannot resist the lure of recurring revenue and if they could figure out some way to sell songs online that would stick, they would just drop the contract like a hot rock and let the lawyers figure out the rest.
I think there is also some degree of artist demand to be on iTunes that the labels would have some trouble resisting altogether.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The distinction between the commodity (music) and value (price) or (currency). The two attributes of money = store of value and store of currency. iTunes has created a "money" where iTune is a store of value (fixed) and a store of currency (limited). In order to create a Music economy money (itunes) must be allowed to float freely in the marketplace.
Jobs is holding out on the big labels to lift their "limits" on itune's currency (currently 5) before he allows the value of itunes music to float free. Until then Jobs will keep it fixed.
Apple will be a MusicBank taking a fee in the transaction as an honest broker facilitating the exchange of music.
As long as older songs are less than $0.99, I wouldn't really mind.
You totallly misunderstand what the labels vant in the way of "variety". They mean to have the old songs stay at 0.99, while new songs are $2-$5 each. Seriously, check older news articles for the labels demands.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Well if you're going to steal from artists why not just download directly from P2P? Or break into thier house and take something.
.0001 for a song pretty much leaves less than .0001 for an artist, even IF they were actually getting paid ANYTHING.
What I wish people would GET is that paying
Your attempt to keep the Russian mafia rolling in vodka is very kind but let's not pretend it's anything like an ethical option, even if it's smei-technically legal under some wierd loophole.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I wondered why Apple stock was going up lately - I had missed this news. This was a big hurdle to overcome, if the Apple store had to give it it would have been a pretty mighty blow to the ITMS juggernaut.
I actually expected Sony to pull out of ITMS entirely just like they did in Japan when ITMS opened there. I guess they need the cash flow a little too much to just toss out a few hundred million a year...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I am not the type to place anyone on a pedestal, but damn, good job Jobs. Man, that reality distortion field was must have been set so high, those negotiators didn't have a chance. They must have believe in free love, down with big brother, and Macs are the faster PC's on Earth. Later, when the effects wore off, they were dumbfounded when they realized that the terms of the contract were the same as before.
You don't have to be smart to use a Mac, you just have to be smart enough to buy one
Not only have they been picking on Apple, but they have also been coming after my fav Internet radio station (3wk.com) this week.
I know the RIAA is pure evil and all, but why *now*? Call me a conspiracy nut, but it looks to me like they have realy been going apeshit (even moreso than usual) lately.
barack to the future?
Not a single recording artist has been paid one cent by allofmp3.com, and I defy you to prove otherwise.
C'mon. One scan of a royalty check. That's all it'd take.
News for Nerds. Stuff that Matters? Like hell.
http://fifthroom.blogspot.com/2006/01/why-apple-wa nts-free-music.html
Why Apple wants free music
The recording industry keeps asking for tiered pricing on iTunes, and Apple keeps saying no. This seems odd--why can't the two agree on how to make the most money off online music sales? In fact, I'm sure they agree, and I'm sure the recording industry is right: more money could be made with tiered pricing. The real problem is a conflict of interests--the recording industry makes money off music, and Apple makes money off iPods. Here are some numbers: in under 3 years, 600 million songs have been purchased on the iTunes music store. Apples cut of that comes to just over $210 million. Meanwhile, the Apple has sold 6.5 million iPods in the last quarter of 2005 alone. That's well over $1 billion in just 3 months; the money from iTunes is pocket change.
From the perspective, it's clear why Apple doesn't want to raise prices on iTunes. They could double revenue from the music store and they still wouldn't approach iPod level revenue. While the recording industry is interested in iTunes to generate revenue, Apple doesn't it see this way. They have other things in mind for iTunes:
1. Apple does not trust a 3rd party to develop a music store for the iPod. They have two reasons for this: first, making good software is tough, and I don't believe they would trust someone else to do it for them. iTunes is easy-to-use, well designed, and well programmed, and the iPod is all the more successful because of this. Second, depending on a 3rd party for a business critical application could put them in a strategic bind in the future. Napster's subscription model and other byzantine DRM restrictions pose obvious problems here.
2. The more stuff people put on their iPods, the better for Apple. I think this is Apple's main concern. Everyone who has taken Econ 101 knows about complement products--when the price of DVD's goes down, sales of DVD players increase. Alcohol prices on the rise? Bad news for Trojan. Music is a complement to the iPod, and the lower the price of music, the more iPods Apple can sell. If it were up to Apple, music downloads would be free, and we'd all be out buying 60GB iPods because our old 10GB models just can't fit everything. Do you think Apple is concerned that people are using iTunes to steal music? Not at all! Free music makes it easier for Apple to push their new, high capacity iPods. The motivation for the two latest additions to iTunes becomes clear in this light: fill up people's iPods faster (videos) and without asking for money (Podcasts).
"So we're left with the choice of DRM online music, 'protected' CDs or no music."
Not really. I've purchased a bunch of CD's over the past few months, and none have come with any DRM.
Oh, and I pay about $7 with shipping. (read that last sentence again before you comment).
I'll grant you that if you can't wait a week, you'll pay $12-15 for a CD, but *hardly any* have any sort of protection. In fact, despite my CD collection of over 1200 CD's, I have only one with any sort of DRM, and Winamp didn't even blink copying it to MP3.
So your choice is $10 for DRM laden songs from Apple, $7 for no-DRM CD's (wait a week), or $12 and go to Costco, no DRM CD.
Changes your conclusion quite a bit.
This wish for accounting is ahead of the market. Apple becomes the banker when it holds your account, facilitates musicplace transactions and "gets you involved in music" as a service.
Good nose for the future...
How many of us would think 'well, its just nothing, let me get 5-10 songs tonight' if the price per song was $5 or $10 ?
For one or two bands, I would. Lower that to $2 per song and I'll go up to 5 or 6 bands.
or would any of us get a 'cheaper' song because the song we wanted was priced much higher ?
I do, all the time. For $20 a CD had better be something I'm sure I'll love. For $10 I'll buy an album from someone who's played something I liked on the radio. For $5 I'll take a chance based on just word of mouth. Am I that abnormal, because I base my purchasing decisions on both price and expected value?
Of course, I'm not too sympathetic with the music industry here. They're supposed to be publishers, and if they'd been smart enough to start publishing over the internet ten years ago, Apple would be in no position to start dictating terms now. The labels would just undercut iTunes for any songs they wanted to price at less than $1, and they'd refuse to put on iTunes any songs they wanted to price at more than $1.
But they didn't want to do their jobs (Gosh, isn't the internet that place with all the pirates? We'd better stay away from that!) and now they're mad that they're being ordered around by a company who did their jobs for them. How sad! If the record companies get smart, they'll just be silently grateful that Apple hasn't started dealing with bands directly and cutting the less competent middlemen out altogether.
... they actually want to make redownloading take a telephone call, which will severely limit the access for it. Otherwise, they'll get somebody, somewhere who buys $3,000 worth of music and then get that account's username and password passed around the internets and before you know it its been "redownloaded" 50,000 times. Sure, they could put some sort of technological limiter on it, but we all know every DRM system gets gamed. Keeping a human in the loop gives a chance to catch the gaming and, at minimum, severely reduces the speed people could game at.
Help poke pirates in the eyepatch, arr.
People get involved in things. Engineers get involved in their projects. Filmmakers get involved in their films. They make a million decisions, and spend thousands of hours invested in getting this thing to work perfectly.
On the other end of things, people will walk away if they can't figure out your gadget in 15 seconds or so. 15 seconds. It's very difficult to keep perspective when you've gotten the equivalent of a Masters Degree in something, but the user needs to know how to use it intuitively.
I'm guilty of this as well. I know there were some decisions I've made in my career that made sense from the perspective of someone who has worked on something for 10 hours a day for 300 days, but didn't make sense to anyone else. Those games were my life for that year of development, but to a user they may just be 1/100th of their time in a week, and 1/100th of their attention.
KISS. Simplify it. Simplify it some more. Then when you think you've made it as simple as possible, simplify it some more. Then put it in the hands of an average 40 year old office worker. I guarantee you will find that it is still too complicated.
The ______ Agenda
If American car companies listened to you.... then they might stay in business.
However, executives would not be able to retire with the same bonuses. Unions would have to settle for less-than-perfect contracts.
As long as our culture de-values pure pride and quality (traits embodied by Apple and the Japanese for example) most American companies will only produce crap for however long it takes to loot the company and go bankrupt.
I suggest you read Slashdot
For every recorded song there are 2 copyrights--the copyright to the music and the copyright to the individual recorded performance. It is very common for contracts with record labels to assign copyright for the unique recorded performance to the label. The artist still owns the music and is free to re-record that song or play it live for more money, but the version on the album belongs to the label. For that reason I think it's disengenuous to imply that only sucker bands "give up ownership of their music" for a "massive advance." It is more complicated than that. My brother's bands have put out several albums through labels and in each case there was no advance other than the recording and distribution costs. Their songs sell through iTunes and I can assure you that they don't make 70 cents per song sold. I'm pretty sure that in each case the performance copyright was assigned and the music copyright retained. They receive a set royalty percentage every time a copy of an album or song is purchased. But they do not have to seek the label's permission to perform the songs live.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
No to complexity in government, yes to truthiness!
Sufficently chagrined I've been searching again.
Still getting nothing - I'm guessing PEBKAC (or a corrupted iTunes which I really doupt)
I'll look into it. Sorry for the waste of bandwidth.
Physics is like sex: sure, it may give some practical results, but that's not why we do it.
While it was once true you needed professional tools for good music..
Thats not true at all anymore. For $1000 you can buy your own hardware and produce music that sounds just as good as the "professional" now.
You must sell or support those old obsolete systems. Nobody else still claims you need a pro...
if a market has perfect elasticity, that curve would be a straight line at a 45 degree angle...
Actually, I think you're thinking of "unit elasticity," or an elasticity of 1. "Perfect elasticity" would be represented by a horizontal line. At price p the firm would sell as many as they could produce. At price p + $.01 consumers display their perfect willingness to refrain from purchasing, and the firm sells none of their product or service.
Here's a page with some diagrams:
http://www.answers.com/topic/elasticity-economics
From the GPA:
"The result is I simply quit buying CD's. How is this profitable?"
The correct answer to this question is "You are not a part of our target market."
A more popular song will be purchased (ie downloaded) more often than a non-popular song. This will require more bandwidth.
Disclaimer: I hate the RIAA and the MPAA.
It took absolutely no more effort on the RIAA's part or any Label's part to create it
Popular music is often the end result of a very long (and expensive) exercise in recruitment, collaboration, production, and marketing. This exercise is financed by the labels, generally from the profits of previous successes. Labels often sign promising new artists knowing that the first album will not be a commercial success, gambling that as the artist matures and the fanbase grows, there is the possibility of gold at the end. They're good at it. They are also rapacious, but pretending that these expenses do not occur is unrealistic.
Ever hear that story? The RIAA wants to kill the goose to get at the golden eggs it thinks are inside.
You can find more details about the revised legislation at Ars.
Basically, it looks as though companies can keep measures of protection and no longer need to worry about interoperability as long as the songs themselves can be copied. I wonder if the new provisions will affect any Microsoft DRm standards at all...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I had trouble understanding some of what you were trying to say, but you seem to be confusing short-term profit maximization with long-term profit maximization, which is really about economic sustainability. I would reply that the reason the RIAA firms are holding on to their old-fashioned business model (which looks like short-term profit maximization) is that nobody knows exactly what economic sutainability will require in the future of that industry. They can't just guess because they have too much investor money riding on the outcomes of their decisions. If it looks a little like they're paralyzed with fright, it's because they kind of are.
.
Apple has only been able to drive so strongly into this future because Steve Jobs is what's termed "a charismatic leader." Charismatic leaders can take those chances and try to innovate. Sometimes they fail. Steve has a long history of not failing, so investors are willing to follow him.
the fact that the 'market' is in fact people which have a tendency to behave according to their own choosing and not as mindless drones of the 'invisible hand' is not.
Actually, in the aggregate, they DO act as mindless drones. That's what the invisible hand is all about.
They always go for getting the maximum profit achievable with a given or minimum quantity of sales
Well, no. Sometimes firms go for volume at low prices (this is called 'penetration pricing'.) Consider, for instance, WalMart.
a sheer stupidity scratch for the marketing crowd ? yes
I'm not even sure what that was supposed to mean. I would just point out that listening to the marketing people has worked out pretty well for Bill Gates and friends.
In the Library, when you search, results update as you type.
That is not practical with the whole store, so you have to hit "return" to see your search results.
That seems most likley to be what is going wrong...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
What about the engineers who helped with the recording? You going to track them down too? The cover artist?
Just because the music companies take more than they should does not mean there are a few other people who really do deserve some money and recognition that I like their work.
The problem is just that musicians are too often signing up to really raw deals. The concept of a music company still has validity - look at CDBaby.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Some day I'd like to see ... a nice simple alternative ... where the artists get paid on donations from people who liked their stuff. Until better bands start showing up there, I'll stick with my buck an album at AllOf for MP3s that do not limit me.
Of course, YOU'RE not donating money to the bands whose music you're downloading from Russia. Neither is anyone else. And why would a band move to a license where they won't be ABLE to afford to spend their time making music?
They KNOW you won't support them, because you're ALREADY not supporting them. Nice.
The wash up is that even heavy discounting of current music would not get me to buy it, even when I'm still silly enough to pay $A14.99 yesterday for effectively one track that is unlikely to make it to iTMS any time soon and which, at over eight minutes, would almost certainly finish up marked as "buy whole album" if it did.
-- Our systemic servants do not good masters make.
How on earth can you people complain about $0.99 a download?
There are a lot of people that need to get paid out of each track sold, and bear in mind the razor thin profit margins apple themselves must be taking.
Here in the UK, we are paying £0.79 ($1.44) for EXACTLY the same music from iTunes.
Now THAT is a ripoff.
Not all songs are equally good. . . .why should they all cost the same?
Anyway those costs are still there.
Music costs can be simple broken down as follows.
COST DIFFERENCE BETWEEN OFFLINE AND ONLINE: 0
COST DIFFERENCE BETWEEN OFFLINE AND ONLINE: 0
COST DIFFERENCE BETWEEN OFFLINE AND ONLINE: 0
COST DIFFERENCE BETWEEN OFFLINE AND ONLINE: INFINITE
COST DIFFERENCE BETWEEN OFFLINE AND ONLINE: AS CLOSE TO INFINITE AS MAKES NO DIFFERENCE.
So where does that leave us. With a online cost that can easily be higher per song then getting the stuff on a CD.
Something smells fishy. If iTunes was not a huge scam they could be selling the songs for a dime and would still be rolling in it. Granted you would then have to charge people the cost of the credit card transaction but perhaps this would finally spur those micro payments we have been hearing about.
The music industry is too greedy to realize one simple thing. Sell for as low as possible to gain as many sales as possible.
The dutch owner of Freerecordshop has wanted to install a system in his stores where you could order any song from a central database and have it burned to CD or uploaded to your mp3 player. He has been turned down time and time again. The benefits are obvious. An infinite catalog with no stocking issues. It is money in the bank but the music industry just can't get their heads around it.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Well let me clear what im meaning a little :
In internet, profit maximization is about maximizing sales numbers. Because internet is the most advanced, boundless, effortless and most automated distribution/sales medium ever created. You can sell downloadable stuff to millions of people through a single site in a day, with ridiculous operating costs for you in comparison to operating a ring of merchandise stores all over the nation. And in addition, the product is easily reproducable - you just provide 1-2 versions of the download in 5-10 mb sizes and thats it - there is no cd copying, no labeling, no extra stuff. There is even no tech support afterwards if you are selling songs !
This is a place where excessive profits can neither be justified nor accepted by the public by force or other means.
Thus, considering both advantages and 'must do's of the internet, i propose that profit maximization can only be practiced by staggering amount of sales in respect to music downloads, or similar products.
Read radical news here
... controlling the whole chain from musician to consumer? Great! That's what the big recordcompanies always wanted, but couldn't get working. DRM heaven!
Error 001
Security Scan and Virus Detection do not work with your operating system.
Where the hell were you guys in my microeconomics class? This is a whole lot easier to understand than say...a Perovian lady who speaks English as her THIRD language. She kept saying stuff about guns vs. butter and the GTA player in me thought, buy the guns, shoot the guys with the butter, take the butter.
Maybe that's just me.
Alternately, you could go to England, or any of the other countries where bookmaking/oddsmaking is the legal method of taking bets on things like horse races, and probably take a class of some sort in how to do it. (Here in the U.S. we mostly use pari-mutual betting, which works differently and doesn't really require any skill on the part of the "house.")
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
As a hobbyist part-time musician myself (though much more part-time in recent years than before, thanks to a demanding day-job, a kid, etc.) - I do know what the Mackie costs, what studio time runs, and so on.
I'd still argue that producing "something that will sell" doesn't necessarily require all of the pricy gear and studio time. Those things make it *easier* to accomplish the task - but they're not requirements. It's a lot like the movie industry in that regard. You can easily produce a movie that looks "professional" when you have a big budget to spend on special f/x, top-quality HD digital cameras, etc. But some great movies are also done on a very tight budget, and filmed with no more than "prosumer" grade camcorders.
The first place an aspiring musician can "cut corners" is by ditching the high dollar studio time and replacing that with a good education on mixing and recording techniques. Let's face it. Most musicians know very little about such things as the right placement and types of mics to use to record, say, a drum kit or background vocals. For under $2000, anyone can set up a PC (or a Mac even) as a digtial recording studio with clarity and capabilities matching or exceeding the local recording studio's equipment. (Heck, many of the high $ studios in my area brag about having ProTools. Yet a Google search quickly reveals many pros saying ProTools is rather limiting compared to some other packages on the market. It seems to be popular more because of the status and recognition level of the product name.) The biggest limiting factor on "production quality" is the knowledge level of the person working the equipment. So a musician can either take the easy way out, saying "I don't know anything about that!" and shell out $'s for someone who does, OR they can invest some time and effort in *learning* those skills. Like practicing an instrument, the effort will pay back large dividends down the road....
Wow, all this debating and the record lables have managed to fake everyone out with the whole "6 of this or a half dozen of those" routine. The lables are arguing AND agreeing with the original price for a reason, they get the same cut. They were worried that songs would go down to $.75 or $.50, then they would get less money, but at $.99, they keep their same chunk of someone else's money. Now they don't even have to deal with pressing the albums, Apple just takes the cut that would have gone to materials and labor for pressing.
If ANYONE thinks $.99 is a good deal or even close to fair, I have some land in Florida if you're interested....
The phrase "Hoist by their own petard" means blown up by their own cannon. Petard==Bombard, an early form of seige cannon prone to blowing up due to poor metal-working at the time. Yes, I know you were making a joke, but there are probably plenty of people out there who have heard this phrase but have no idea what it means.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Sorry for the off-topic meta-comment.
When a comment that is a little longer than the "maximum" length gets modded up to +5 informative or insightful, it should not be truncated, requiring an extra click and page load for the 'Read More'. Thank you, have a nice day.
First against the wall when the revolution comes
Big corporations have been subverting capitalism as surely as they have been subverting democracy. We have to draw the line somewhere. Personally, I'm with Jesus on this, lending money for profit is a sin, but even if you are some kind of Libertarian Randroid you have to see that our current implementation of capitalism is being gamed by the rich and powerful.
Now, you may think you have interests in common with the ruling class, but unless you are making over a million a year, you have nothing in common with them. You are a worker, a drone, a number in their spreadsheet, nothing more. You will never be like them. Unless you sell your soul they will never let you in their little club. All your hard work makes them laugh, because real people don't get rich by working, they get rich by leeching off of others' work.
There is something inherently greedy about being a corporation. They exist simply to make a profit for their shareholders, and damn all consequences that can't be legally pinned on the corporation. That is greed taken to a sociopathic level. How can anyone argue with a straight face that putting greed on a pedastal and making a God out of money can lead to good things for society?
Being an American is inherently greedy too, given the disproportionate share of the world's resources we are consuming.
Finally, I love it when people say things like "I'm against (some natural outcome of capitalism) but not capitalism itself." It's like saying, "I'm against painful burning sensations in my hand, but not against touching a hot stove.
If you let them, the sociopaths and psychopaths in power will hold your hand to the stove again and again.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
99.95% of songs aren't worth a dollar.
.05% are worth only a dollar.
The other
Writing the retail price into a wholesale contract is exactly what "price-fixing" is all about.
Where's the district attorney on this?
I can't believe I wrote that. It's hard to believe that I actually have an MBA. Thanks for the gentle correction.
Yeah, and when my hard drive gets zapped and I can't find my original CDs, why won't Microsoft let me just download another copy of Windows and Office? I don't want any responsibility for taking care of my stuff!
</snark>
--R.J.
Electric-Escape.net