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Apple To Grant All Labels DRM-Free Distribution
SexCaptain writes "MacRumors.com reveals a letter circulated by Apple to all producers of content for the iTunes Store, announcing that from May onward they can sell their music at higher quality and free of DRM. Hopefully this opens the doors for labels like Netwerk. This is a big step in the right direction, although it's unclear exactly what Apple means by 'higher quality,' and there is no mention of price changes. (Apple charges $0.30 more per song for DRM-free content from EMI and encodes it at 256K.) Quoting from the letter: 'Many of you have reached out to iTunes to find out how you can make your songs available higher quality and DRM-free," Apple wrote in the communication. "Starting next month, iTunes will begin offering higher-quality, DRM-free music and DRM-free music videos to all customers."
Of course, at 1.30 per song, iTunes' DRM-free AAC cost about 6 times as much as eMusic DRM-free MP3, but for all those people looking for DRM-free top-40-type music, dream come true, eh? (how big is that overlap, anyway?)
It seems pretty clear to me-- they're offering the same pricing scheme that they've announced with EMI. They will continue to sell 128 kbps DRM-wrapped AACs for $0.99, but will additionally offer 256kbps DRM-free AACs for $1.29. Anyone familiar with Apple's tactics will tell you that they'll want to keep it simple. They'll offer the same pricing for the same product across the board.
I'd guess that this is all transitional anyway. Apple will continue to try to pressure labels to drop prices and remove DRM on everything. In the mean time, this is a step in the right direction.
Agreed. It's now significantly more expensive to buy music from Apple compared to Wal-mart. This is progress?
Translation from Jobs-esque:
"People asked for DRM-free content, and EMI said fine, but we'll charge more. So we said, ok, we'll up the bitrate and justify the higher price with that."
Actually here's an even better translation:
"EU asked for DRM-free content, and EMI wanted higher prices. So we said fine, we give you higher prices (we'll justify with bumping up the bitrate), you give us DRM-free tracks & we got a deal."
If they do this... they open the Pandora's box of also making new songs higher priced.
Personally... I prefer the consistency approach.
Just wondering.. Is the price hike with higher bitrate a similiar justification to the older change in format from cassette tapes to cd. Didn't the record labels do that? Claiming its new technology! so it'll cost ya. But is it apple doing this now?
I think you misunderstood something-- Apple is offering HIGHER quality AAC's w/ NO DRM for $1.29. The $.99 deal still applies for the DRM'd version, which is the same quality it always has been (or at least, as far back as I remember).
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No, letting the labels set their own prices WON'T result in lower prices. Here major label logic for you:
Popular Tracks: Need to cost more to cover the demand for them
Unpopular: Need to cost more to cover the cost of making them available.
If anything 99 cents will be the 'base' cost and things will just go up for there.
Or at least $.05, if allofmp3.com proved anything. Whatever the price point is there's a lot of money being left on the table because the labels aren't smart enough to go after it.
Do you have ESP?
It would also allow smaller labels labels and independent musicians to compete by leveraging their lower overheads--one can sell for less when a album was self-produced in a week with no advance and no A&R guys to feed.
This is exactly why I'd expect the RIAA to pull out of iTunes if they allow this. No matter what, they don't want an efficient market - not when they're selling artificial scarcity.
It's interesting to see Apple as the potentate with the ability to change the music industry with small changes in policy. I think they're doing a good job as benovolent dictator, but there's some deeper meaning, I'm sure, to the fact that iTunes is only 5 years old and we're talking about things this way. The power of the Internet to change markets, demonstrated, perhaps.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Agreed. It's now significantly more expensive to buy music from Apple compared to Wal-mart. This is progress?
It's also considerably more convenient. And not that much more expensive. Apple doesn't censor the music or movies they carry. You can buy one song at a time or the entire album. And there's no wasteful packaging.
Yeah, I'd call that progress.
If they do this... they open the Pandora's box of also making new songs higher priced.
So what if they do? It's just new music; nobody needs it to survive, and nobody is being forced to buy it.
and the need to physically purchase the product.
Don't discount *that* - that's the argument in a nutshell. I have to spend $10 in mileage costs to go buy a physical CD. If I was billing the round-trip time to a client instead of driving to go get it that CD probably costs well over a hundred dollars (not that I work 24/7/365 - I sleep too, but you get the point).
I will admit for single track purchases the money for the DRM free is compelling.
Yeah, especially if you don't have to give up the sound quality as well. I have CD's that I've tried ripping to 128K AAC and it's not good enough to replace the CD's for all needs.
WHat did Steve Jobs say? iTunes has to compete with free? How exactly does this scheme do this?
Some people would rather download the lossless or high-quality track from P2P rather than buy a very lossy version from iTunes (see the above for reasons why they might not just go buy the CD).
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Yes, its amazing if you steal something how cheaply you can then sell it for.
Less flippantly: an item is worth what the market will pay for it.
Integrate Keynote and LaTeX
When Jobs came out with his "Thoughts on Music", I made all kinds of cynical comments saying that he was being disingenious for this or that reason. After all, Job's in incredibly successful and people all over the world laud him and his company's products, so he NEEDS to be brought down a notch.
Well now he's making me look like an ass.
And the answer is, they don't want to be in the music business, at least no more than they have to be. The only reason they are curently is because the music business provides content for their hardware business, which is where the real money is made. The iTunes Store is effectively a loss-leader to sell iPods. Jobs has said as much already.
"The guide is definitive, reality is frequently inaccurate."
I'll give them $2.00 a song if they will give up on this compressed stuff and sell me lossless. I'd like to have the same music that comes on the real CD. That way I can compare a checksum with a "global public" value, and make sure they haven't watermarked the song. They could even go to $3.00 a song for people who are aficionados and release the 24 bit stuff.
So we have...
$0.99 = DRM'ed AAC at 128kbps
$1.30 = Non-DRM'ed AAC at 256kbps
$2.00 = Non-DRM'ed, lossless.
$3.00 = Non-DRM'ed, 96KHz-24bit per Channel.
Still dreaming.
Yes, letting the labels set their own prices WILL result in lower prices. Here [sic] Indy label logic for you:
:D
RIAA Tracks: prices just went up, and customers aren't happy with that
Indy Tracks: 25 - 99, we'll make it up in volume!
Don't call me back. Give me a call back. Bye. So yeah. But bye our, well, but alright we are on a shirt this chill.
Agreed, people are willing to pay a lot more for the latest from (insert pop star of the week) on their cell phone, for a fraction of the song, at a fraction of the quality.
I don't care if they charge $3 for whatever the #1 pop single is... more power to them.. that's what a free market is about... If I can get the new Bionic Jive album from iTMS for
I think the price lock really sucks... it would be easy enough to give the big labels, and independents a control panel to set their own pricing. If people aren't buying, they can lower it... Hell, could even make it so they can only go up in price on a song/album once... IE, first 1000 downloads of Jessica Simpson's newest single go for $.25, then jumps to $3... then can only go down from there... Could be used as a better promotional tool.
Michael J. Ryan - tracker1.info
Yay for Apple fan logic.
Generally I would expect that not needing packaging, delivery trucks, shelf space, etc, would result in the end product being cheaper due to the lack of need to pay for all that stuff... but no, somehow delivering less is a "feature" that makes sense to pay extra money for.
Don't get me wrong, I don't care much for the packaging either, but calling it progress to pay extra for the lack of something is quite bizarre.
Their entire catalog [zunior.com] is in non-DRM format and they have been doing it this way for a lot longer than Apple.
Your argument is significantly undermined by the fact that their entire catalog consists of artists and labels I've never heard of before in my life.
They could price their albums at $1.25 apiece, and most people still wouldn't be interested.
I'm very skeptical that it will be OSX in anything but name, or possibly kernel. But almost any application that is suitable for a phone would not be very usable on a desktop and vice versa. Video games have a much higher threshold on a desktop. Excel would be a travesty on a phone. Even the VNC version that I have on my desktop would positively suck on a phone. Even phone-centered apps like Address Book or iCal are not suited to the tiny screen on the iPhone.
Even if the iPhone worked perfectly with all OSX applications, it would be but one example in an ocean of counter-examples. I have never seen a Palm or WindowsMobile application that is as functional as it's desktop equivalent.
I'm not saying that DRM doesn't restrict software - clearly it does (as in your vmware example). I'm just saying that we, as a society, seem to hold software to a different standard than music, and I was simply pontificating on why I thought that was the case.
I think that video is somewhere in between the two - perhaps when it takes less than 2 hours to encode a H264 movie people will start to care more. Right now, ripping a CD takes about 2 minutes and it's pretty bulletproof.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
And it doesn't.
But once again, much to our collective befuddlement, the buyers don't seem to care much about the costs. They just demand X quantity at Y price and the ever watchful marketeers are happy to sell them X much and collect X*Y in cold hard cash.
"Sacrifice for the good of The State" - The State
Yay for a complete lack of understanding of economics.
The price Apple charges has nothing to do with the cost of delivering it. It is simply the highest price that users will pay, such that Apple maximises their profits.
And as for all the rest, it probably wouldn't hurt you to venture outside of top-40 music and try something different.
It is not convenient when you use Linux.
Nothing is convenient when you use Linux.
Don't become a regular here -- you will become retarded.
You are only looking at a fraction of the actual costs. How do you know what Apple's costs are, vs. the costs incurred by a physical distribution company? The costs are not just for the physical media and distribution, or the network bandwidth, iTMS development and hosting costs, but also the negotiated per-title royalties that must be paid. The labels get their cut, and that's probably the most expensive component of the price.
And even after all that, sure, Apple's costs may be lower. But Apple's prices are apparently higher by your measure, and I think that's why you're complaining.
You see, there's this funny idea called 'Capitalism'. Capitalism pretty much means "if you want to sell a product at whatever price you want to sell it, go for it. If you make money, congratulations. If you lose money, tough." The corollary to that is "if you want something and are willing to pay the asked-for price, you can buy it. If you are unwilling to pay that price, you can try to negotiate a new lower price, shop elsewhere, or go without."
So if you think a DRM-free song is worth only $0.25, why not write to Apple and ask them to sell you that song for $0.25? If they're unwilling to negotiate with you, then you are free to go to another source and pay their asking price. Otherwise, contact the record labels yourself and start a music distribution business of your own, set your prices at $0.25, and make lots of money. Let us know how that works out for you.
John
"The cost of downloaded music by all logic should be below the half of what the CD of the same stuff costs."
This article is a bit wordy, but it does a pretty good job of explaining why retailers do not set their pricing according to the cost of production. It happens in other markets, too: Kenneth Cole can sell a shirt for $150, while Sears sells one for $15, and they have roughly the same cost of goods. I'm sure you can think of many more examples. It even happens in other forms of media: movie A might be an art house flick that cost $10MM to make, and movie B might have cost $100MM. Yet both will cost about nine bucks to see in the theatre, and both will cost about $20 when they're released on DVD.
Believe me, you're not the first one to be befuddled by this... but it's a widely recognized principal. We can complain, but it won't help. Kenneth Cole will keep selling those $150 shirts as long as people will keep buying them. Logic be damned!
"Now allofmp3.com had reasonable prices."
...and allofmp3.com is there to serve a certain type of customer. The iTunes store serves a different type. There's room for both of us in this world.
As an aside, I think lots of Slashdotters have a flow chart in their head which has a constant terminus labelled "...and thus, I am still morally entitled to pirate music!". The flow chart keeps changing along with the market. Ten years ago, it was price and selection (tracks were $3.00 and selection was pitiful). Once Apple drove the price down and online catalogs exploded, the path was modified to encompass DRM. Now that DRM seems to be going the way of the dodo, it's back to price.
Sitting in my day care, the art is decopainted.
And don't forget that by buying off iTunes you're also saving the planet. Just think of all those dirty emissions you avoided creating by staying at home instead of driving. Add to that the emissions saved by by using 1 less CDs worth of plastic, packaging and transport to the store of your choice.
You just got greener
Don't get me wrong, I don't care much for the packaging either, but calling it progress to pay extra for the lack of something is quite bizarre.
Really?
There seem to be many people willing to pay extra for the lack of something.
Like those willing to pay for satellite radio, because it lacks stupid DJ's and excessive ads.
Or those willing to pay more for their steak, because it lacks the fat and toughness of a cheaper steak.
Or those willing to pay more for their new car, because it lacks the mechanical problems of a cheaper used car.
Point being, there are countless times when paying more for "less" makes sense. But then again, in those cases, "less" is very subjective, depending on who is actually doling out the cash.
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
Not to be a conspiracy theorist or anything, but I wonder about this. That is Jobs' pitch to the record companies: "We're not your competition, we just want to sell iPods." But is it really true? Jobs thinks long-term. Maybe he's just lying low, trying not to spook his prey until it's too late. With iTunes becoming huge, what young musician wouldn't be tempted to sign up with iTunes as a label? Particularly if, instead of the artists getting a small slice of the record companies' cut of an iTunes sale, they got most or all of it? Wouldn't that increase the artists' income from digital sales by something like 400%?
The major labels would excrete bricks if this happened, but if iTunes gets much larger, it may be inevitable. At that point Jobs will have the major record companies over a barrel, and could make them obsolete while getting cheers from everyone else by vastly increasing what musicians make for digital sales and giving the fans what they want.
Imagine the PR coup that would be. I see it as a "One more thing..." item at a future MacWorld Expo keynote.
Q: What does the "B." in Benoit B. Mandelbrot stand for? A: Benoit B. Mandelbrot
Apple fan logic? No, not quite Mr. foxy-second-life turds-for-brains. Economically speaking, consider a 10 song album with only 2 songs that have "pop appeal". If the label spends money on producing the album, producing cover art, shipping copies that don't sell to stores, etc..., they need to recover the costs somehow. So, if people wish to buy the single songs instead of the album, you push the single song price up to try to recover that cost from singles versus the album as a whole since 8/10 of the CD is not selling well. Your average teenager or non-music-obsessed adult prefers singles - they want the songs they like, the don't want the stuff they don't like. The record companies price for this, the average consumer (NOT for outliers who can't understand this pricing scheme). If most of your listeners just want one song, you have to push the price for that one song up. But that won't work for two reasons - first, if you price those songs up higher than the rest, consumers may have an inclination to not buy them since they appear more expensive. Second, you can't predict the popular songs from an album when you set prices before it hits the market. Therefore you pick a pricepoint somewhere in the middle and price them all the same.
You need to read up on something called 'amortization'. Just because YOU download the song doesn't mean they didn't pay for packaging and shipping for a CD that went to a walmart that is now sitting collecting dust. They need to make up that cost, thus they amortize costs across all venues where the songs are sold.
If this is apple fan logic, what is your logic then? I hope I get to metamod the moderator who gave you bogus points.
Actually people going around telling their friends and aquaintances that a certain vendor is too expensive and they can buy the same product cheaper somewhere else is also a part of Capitalism.
Given that the theoretical baseline for old fashioned Free Market theories (100% information awareness for all participants) doesn't really exist, the real world way of compensating for the information gap (between single consumers and multimilion dollar companies with big consumer research and marketing departments) is doing exactly what the GP is doing: "Dessiminating the information that he has".
Actually, the only reason why we don't have DRM free music at $0.25 a pop is because Government has created and granted artificial monopoly rights (aka copyright) to some of the players.
You really don't get it, and that is why you will never make it as a business owner. It's not ripping off the customer if the customer is willing to pay the price you ask. It's good business. Supply and demand. Capitalism. Take your pick.
You think 40% margin is high? It's not. If you want to talk about profit margins, take a look at what the profit margin of a cup of coffee is at the gas station, or the price difference between a 2-liter of Pepsi, and a 20 oz. bottle.
Or better yet. . . Check out the prices of a hot dog and a coke at your next professional sporting event, and compare that with the already huge margin on the same product at your local convience store. Then compare that with the cost you would incure if you purchased a package of franks at your local supermart.
So it cost a fraction more to get the convience of purchasing a per tract, at home song, then it does to drive down to the store and purchase a complete cd (even if you only wanted one song). Hmm. . . who has the bigger profit margins?
Self proclaimed wannabe geek. You know how it is. Most of us who read this stuff probably fit in that category.