iTunes Might Lose Labels 614
Dreamwalkerofyore writes "According to the New York Times, the iTunes music store might have to change its 99 cents per song policy or risk losing a huge amount of songs due to recent disputes with record companies, who demand an increase in the cost. From the article: 'If [Mr. Jobs] loses, the one-price model that iTunes has adopted 99 cents to download any song could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for $1.49, while a golden oldie could go for substantially less than 99 cents.'"
great! (Score:5, Insightful)
might change that 'it's new - it must be good' thingy people have in their heads..
Great! (Score:3, Insightful)
Yeah well (Score:5, Insightful)
Wow (Score:3, Insightful)
$99 wont last forever (Score:2, Insightful)
Geeeze (Score:4, Insightful)
$0.99? Yeah, right. (Score:5, Insightful)
Re:great! (Score:5, Insightful)
Re:Great! (Score:2, Insightful)
Greed, greed, greed... (Score:5, Insightful)
I really LIKE iTunes, and I *KNOW* how to steal music if I want to. I really LIKE the fact that I can buy a specific song for a pittance on a whim instead of hoping someone will upload it to the Usenet.
It's not that $1.49 is too much, but it just shows that they will try to reach a price that people will accept, however grudgingly. But the $1 mark is a psychological barrier; once they reach that, people will start to think, "Is this song worth $1.49?" and might not buy it after all.
In any case, good luck to 'em. I don't buy any new stuff anyway. Most of it is crap pushed by the payola artists.
Greedy bastards (Score:5, Insightful)
The record labels pretty much killed CDs by charging 20 bucks each for them, now they'll kill this outlet as well.
Re:Geeeze (Score:2, Insightful)
Re:great! (Score:5, Insightful)
better stick with web radios
AllOfMp3 (Score:5, Insightful)
I'm still waiting for the day when the general population knows about sites like AllOfMp3, where you can download an entire album in just about every popular format for around a dollar. You can even preview an entire album before purchasing, and the selection is pretty decent. Not as good as iTunes, but probably enough to satisfy a good chuck of iTMS users.
And given all this, the record companies want to make themselves look worse? Hilarious! Let them!
Include more indies (Score:5, Insightful)
It seems to me that the primary problem with the music industry is the history of price fixing.
Re:Great! (Score:5, Insightful)
Re:$99 wont last forever (Score:1, Insightful)
Re:Lost a customer (Score:3, Insightful)
Pffft, they don't care about you. You're most likely too educated for them anyway. They want impulse buyers, not those who actually care about copyright. Their war on p2p is merely: 1. another revenue source, or
2. a publicity stunt, or
3. a lever to pressure their congressmen into creating more draconian laws, or
4. to reduce the "cool" effect (with questionable success) of p2p, or
5. an effort to shame some downloaders into buying the music they've illegally downloaded, or
6. two or more of the above.
Re:great! (Score:2, Insightful)
Albums vs. single songs (Score:3, Insightful)
Re:Great! (Score:5, Insightful)
It's quite simple when you think about it: They are not demanding higher prices to discourage buyers from getting the popular tunes and steer them to obscure songs. They're asking for more because they want a net gain. Guess who's going to pay for that. The low end will have to pay for the reduced number of sales of high priced songs, so the price range for anything above garage band level is going to go from $0.99 to $1.49. The few songs which will sell for less you could probably get for free from a crappy website where a rightfully starving artist put them in a hopeless promotion attempt.
Re:Ignores the long tail... (Score:4, Insightful)
Nah... You just need to realize that the "could go for substantially less" part of the deal means maybe all the way down to $0.95. They threw that in there to make the idea more palatable, but in practice, it won't happen that way.
Also, consider that even a slight reduction could end up boosting sales of such material, in the same way that otherwise slow-selling unknowns fly out of the cutout/discount bin at any local music store... We might agonize over whether or not to buy a decent new release at $18.99, but we'll throw away a $50 without blinking on $5-$10 discs we've never heard of.
doesn't surprise me (Score:3, Insightful)
This way lies badness... (Score:3, Insightful)
The magic of the $0.99 is that its magnitude and uniformity places it on that mental shelf reserved for things nobody will bother to steal. But, if Apple starts making some nothings "more equal" than others, then that shelf and mindset become endangered...
Apple is the WalMart of Music Downloads (Score:5, Insightful)
Re:great! (Score:5, Insightful)
So while it's easy to see the record companies' points, they fall down under any scrutiny. It comes down to "what price will the market bear?"
And if they want more for the more popular songs, they will quickly find those songs less popular.
Which will be fine for the record companies, because they'd rather you buy out of their catalog so that they can tell new artists, "Sorry, kid, you don't sell," and screw them out of royalties, fame and etc. They may then go on to blame P2P for the failure of new artists.
You'll find Muddy Waters really cheap, though, because the record companies always owned all of his rights.
Re:To be fair to us Americans (Score:4, Insightful)
I don't think this has much of anything to do with actual profit by the labels. They're making plenty right now, and growing plenty simply by virtue of increased volume. This is a power play. This is the industry telling Apple, "We own you, we don't need you. You do what WE say."
Basically, since they can't compete with Apple in digital distribution individually, they are colluding to strong-arm Apple and will likely run iTMS into the ground eventually. I think laws are being broken here, but I don't expect anything to be done about it.
Re:iTunes monopoly (Score:4, Insightful)
Re:A Cent Sign (Score:5, Insightful)
Re:Great! (Score:5, Insightful)
This is about prices going UP.
And considering they already nearly match the price of an actual CD (without cover, case, physical medium, and at a lower quality with DRM to boot)) it's an incredibly bad deal for the consumer. But hey, it's convenient right?
Re:great! (Score:5, Insightful)
Re:Wow (Score:5, Insightful)
The cable company story doesn't really seem comparable. Cable companies have a lot of leverage on content and it is a hassle for people to switch cable companies. However, it is very easy for people to buy music from a different store than iTMS.
Apple does not have monopsony power.
Variable price != lower price (Score:2, Insightful)
Furthermore, while the "put sale stickers on old impopular stuff" works for physical media, the costs don't scale the same way with downloads. This is nothing more than a way for major labels to leverage price increases...
Greedy record industry? (Score:2, Insightful)
Deal with it, making music has become a lot easier and created new competition in the field!
Re:Yeah well (Score:1, Insightful)
Who here really thinks that, based on RIAA's history, the example will prove right? I'd bet that the unpopular music will stand at the current price of 99 cents, a regular at $1.49 and a hit song at $1.99. After all, the music industry keeps on citing customers' willingness to pay $2-3 for ringtones.
Sorry, RIAA has no "cutting price" in their dictionary. It only has entries like:
- golden goose: n. something to be killed
- customers: n. pl. thieves
- artists: n. pl. cattle to provide blood to suck on
Re:To be fair to us Americans (Score:2, Insightful)
(note: price of cds - hell, most soundtracks cost more than the damn dvd of the movie)
so there have been no cost reductions in the manufacturing of these cds since their inception?
riiiiight...
especially when i can pick up a cd from an indie artist with a low production yield (therefore higher price per cd) and grab it for between $5 and $10 and they still make quite the profit on the damn thing. $7-$12 if I get it through an indie label.
Not this $18-$22 stuff that is going on through the major labels.
Re:Wow (Score:5, Insightful)
I can just see the RIAA, overcome with jealousy over OPEC, arranging a Music shortage. Prices going to $60 an album, people waiting in giant lines at record stores just to pick up a new Black Eyed Peas album. People avoiding playing music while driving to work because it's a precious commodity, while the record industry rakes in profit. Network news would alternately go nuts about how apocalyptic it is, then reassure people that it actually isn't the highest price peralbum ever when adjusted for inflation, informing us that people used to pay more for wax cylinders that could barely hold a song. Then the record industry would graciously recieve generous subsidies from the US government as part of a giant omnibus Music bill. Politicians will promise to help reduce America's dependance on foreign music, and to help keep the chart hits American.
Then we'll invade France to take control of Khaled and his snappy North African pop beats.
Re:Greed, greed, greed... (Score:1, Insightful)
Re:Wow (Score:3, Insightful)
Instead, they'll rely on the rumor mill and their fanbase to do it for them. There's a reason we're reading this in the Times and not on apple.com.
Re:Variable price != lower price (Score:5, Insightful)
If varible prices led to an open market with artists competing on price, then variable prices would like lead to a drop in price.
There are several big ifs in the equation.
Our first big if is the assumption that the prices would have a decent minimum that is near the price of delivering the music. The second big if is the assumption that rights to music is held in enough hands that there will actually be pricing pressure. Right now, the big music collections are owned by a few mega corporations.
You are complete right. If Apple has a pricing structure that sets $.99 as a minimum, then we would see a big jump in price.
Re:remember that they can track sales. (Score:3, Insightful)
"Hey, man, check out this song being only 50 cents on iTunes!"
"What? It's $1.50 for me!"
Followed by a weblog post 5 minutes later. Followed by media attention and horrible PR.
Re:Yeah well (Score:5, Insightful)
If they're really lucky, these record labels won't see a further drop in their CD sales. Plus they won't have the revenue stream from Apple anymore. They'll come crawling back in no time.
Re:this news reads: (Score:1, Insightful)
Re:It was only a matter of time (Score:3, Insightful)
Pretty much no band is big enough to get Apple's attention by themselves. Bands on major labels have to heft of their labels to get them attention -- if not individual attention, then at least the attention that comes from being part of an established catalog.
Luckily for indie bands and labels (my shameless plug: http://www.loud-devices.com/ [loud-devices.com]) all the bands for which CDBaby [cdbaby.com] acts as "online distibutor" together constitute quite a formidable alternative catalog.
One has to wonder: if the major labels do succeed in forcing Apple to raise prices on their releases, might Apple and the artists/label of the alternative catalog be able to keep the old, psychologically much more attractive 99-cent price point? If so, the majors might just price themselves out of the huge iTunes market, sending all kinds of new business to the indies.
Re:Wow (Score:3, Insightful)
I wonder who leaked this story to the NYT?
It does put Apple in a better position for the coming negotiations, doesn't it. Seems to me Apple are playing exactly the game that you've outlined, in advance. You may recall similar stories about possible price rises last year.
Re:iTunes monopoly (Score:3, Insightful)
Microsoft chooses to license its DRM format to mp3 player manufactirers, because it's not in the mp3 player business. Apple chooses to make its DRM work on a non-Apple OS, because non-Apple OSs dominate the market. (And both are licensing their DRM to cell phone companies, as neither is in the cell phone business.)
Re:It was only a matter of time (Score:3, Insightful)
Why do people have to be so incredibly cheap? This is just insane.
Not only does CD Baby do the above, but they actually have a human being listen to the files to ensure that they didn't get messed up, and to set up the "sounds like" links. You are easily getting a couple hours worth of work for $35.
Okay, if you don't have a bar code yet, that is an additional $20, but try registering yourself for your own barcodes, it is a heck of a lot more than $20.
Re:A Cent Sign (Score:3, Insightful)
Ask a Windows user, and either they have no idea, or they have to open Word and use the character palette, or else an international keyboard.
Re:great! (Score:5, Insightful)
Perhaps increased demand should lead to higher prices...but then, if we're pricing music based on supply and demand, then the nearly infinite "supply" of digital music should make it damn near free.
I guess could agree that music should be priced at what the public is willing to pay, based on demand. But continued piracy of music online shows that even at 99 cents a song, much of the public feels that price is too high. One would argue that it's hard to compete with somebody giving away your product for free, but at the same time I really do feel there is a price point at which a vast majority of people would choose the legitimate market over the black market. I just don't think the record labels have dipped that low yet, and I know they don't want to.
Really, the quality of the product being given away for free is also much lower than what is being sold. I'm more than willing to give up good money to have a physical disc, at full audio quality, that I can re-rip should I lose my files. I like liner notes. Hell, I even think buying a full album on iTunes has some value...such as knowing that the entire CD will have been ripped at the same quality, with accurate and consistant tags without my having to take the time to do/fix it myself.
But is the physical CD worth $14.99 to me? Is the "virtual" CD worth $11.99 or $12.99 (the price the labels seem to be pushing for full albums on iTunes, compared to the original $9.99)? No.
For sake of argument, my personal price point would be more like $9.99 for physical CD's (and I'm not talking old/surplus stuff) and $6.99 or $7.99 for whole album downloads. $0.99 a song actually doesn't bother me, as for many CD's it would be saving me about ten bucks, as there is often only one song I want. Do the labels want to try these price points? Hell no. They'd argue that they cannot possibly make money at those levels.
At which point I would pull out a tape of MTV Cribs, which to me is absolute proof there is some room to lower prices. And that's just what artists pull in...I also know that there aren't many record execs driving Civics.
Re:great! (Score:2, Insightful)
Re:great! (Score:4, Insightful)
I was talking about how they justify the different pricing. And simply pointed out that supply and demand isn't their reason.
They also are not suggesting some sort of popularity model -- songs that sell X number of times per day cost $1.50, Y sales are $1, Z sales are $0.50 -- I could see that. That would be entirely popularity-based pricing, perhaps something like the stock exchange (roughly; don't think about it too much). That pricing might not be a bad idea, actually.
But it would freak out the record companies, because they don't want popular things to be more expensive. They want the things that they market heavily to be more expensive. That's the model that they are familiar with and one that they know works.
Apple, however, has completely changed everything about their economic model. Nothing makes sense to the recording industry anymore. There aren't any DJs to buy off with payolla, there aren't any record store chains to give under-the-table kickbacks to -- everything is above the board, and they don't even control the distribution channels.
The record companies want to guarantee hits. They want to control prices so that you are either buying (a) something that they've put a lot of money into at a high price or (b) something that has been sold at a high price for years and is nothing but pure profit. Hits or classics. Expensive or cheap.
But they don't want you buying independent music -- certainly not independent music that costs exactly the same as the stuff they've pumped millions into to convince you to buy.
Which begs to question why they are pumping all this money into promoting these artists if they can't guarantee a certain amount of profit.
But they're finding that when they put their heavily marketed tracks up on iTunes then they lose control. You've got classic music records from 1996 by Telrac Records right between "The Who Sings My Generation" and U2's "How To Dismantle An Atomic Bomb"; D.L. Menard's "Cajun Saturday Night" on Rounder Records in with Justin Timberlake and Travis. If Apple is selling that placement (and it wouldn't be too hard to convince me with the Timberlake appearance), it's certainly diluted.
There are five major labels -- Universal, EMI, BMG, Warner and Sony -- who own nearly everything.
The current new releases are Trick Pony (Curb->MCI->Universal); Craig David (Warner->Atlantic); The Flaming Lips (Warner Bros.); and Crazy Hits by Crazy Frog on Mach 1 Records Gmbh, which is owned by Ministry of Sound, which is definitely not one of the big five.
It's also at the bottom of today's top 10 album list. Coincidence? No.
Apple doesn't care because Apple just sells whatever people want for $1. But the record companies must be livid. Yes, they have 1-9, but they're used to having 1-100. And you can be damn sure they want more money for their efforts. (Though in the end, it will just do more for Crazy Frog.)
The real economics at work here is "Seller sets the price, buyer decides if it's too much." And we have two sellers who 1) disagree about how buyers will react and 2) have completely different motivations toward selling.
Apple thinks buyers will baulk on all sales if some are weirdly more expensive and want to keep everyone using iTunes to sell the most music to the most people. The record companies want more money for their product and don't care if they sell it through stores or iTunes or beam it directly into your head as you sleep (which they may already be doing) as long as they get the most money out of it.
So there you are.
Notice also that these models also never once involve the artists directly, even though one would hope that they did all the real work.
Labels like Sony don't get it. (Score:3, Insightful)
If they force a different pricing model with higher prices, I will pirate my music.
I have purchased 201.78 CAD (168.87 USD) since the opening of iTMS in Canada.
Before iTMS, I would buy a CD per year at the most. Most years, I would not buy any music. I'm not interested in complicated prices models, differing DRM rights per song or subscription services.
I'm a mac user and none of the other services support my platform and music player. I don't blame Apple for that at all but rather MSFT and their desire to trap everyone on windows.
Re:Greedy bastards (Score:2, Insightful)
Great! No new music... (Score:3, Insightful)
'Popular', meaning the latest 'artiste du jour' that they're warping into their 'sound', ripping off by making 'em pay for the studio time, the recording tame and material, the 'pressing' facilities, the 'cover art' and the promotion.
They're committing an internet suicide. You can't seriously do this without a broadcaster (and payola) structure. The buzz of an internet is completely counter to this.
When you (and I) can record, produce, publish and promote music at little or no cost, it makes no sense to go with a label.
This will mean the death of the ASCAP who will hate to start tracking playtime by song on an hourly cycle. And with an iPod shifting time, the results won't mean a thing anyway.
These **AA guys just love to shave by holding the straight edge razor against their necks and pressing down HARD.
They fuck up iTunes and I can predict their death as coming quite rapidly.
I can just see the ITMS front page:
"No non-indie songs anymore because the 'major' labels don't want to sell through us unless they can impose some nonsensical pay scales on us.
Indie music for sale at $.99 a pop."
What about longer music? (Score:2, Insightful)
There is one thing that really pisses me off about Apple's “one size fits all” business model: it's only reasonable for certain styles of music. What about contemporary art music, progrock, or jazz (styles of music I listen to heavily) where a 15-20 minute track is not an uncommon occurence? Hell, some of my favorite CDs have something like 3 tracks ($3) and 50 minutes worth of music. Are you telling me they're worth less than a punk album with 20 tracks ($20) and the same amount of actual music? As a composer, most of my works are 8min+, how does this benefit me? Had this price model been around during the mid 70s, Pink Floyd and Led Zeppelin would have gone broke, or would have been forced to put out cookie-cutter 3 minute tracks like every other shitty pop artist. Under this price model, punk artists become millionares, and art music professionals go broke. I've devoted my entire life to learning about, and teaching myself how to write better music; spending, litterally, THOUSANDS of hours on my own or in conservatory. Why is this suddenly a bad thing, and shunned by both popular culture and the corporate model?
Apple, I love you to death, but fuck you're business model; price by the second, not by the track!
Also, don't get me started on “The Death of the Album”, I couldn't be unhappier to see artists forced to write soully on a song-to-song basis because chances are that listeners won't buy their whole albums. I was just getting really happy seeing artists coming back to writing whole albums that work together as one body of work, to see it destroyed by the new revolution.
Sure, this model puts pressure on artists to raise the level of quality from a song-to-song basis, but it also gives them an incentive to write MORE and SHORTER songs, since, “if I split the track in two, I'll make more money,” right?
—EricRe:great! (Score:4, Insightful)
Oh, you mean like the Disney lawyers? Or Disney itself, which based most of its movies on public domain material?
You take some, and you put some back in. That's the way it works. The parasites are the people who don't want to pay back their debts...ever!