Jobs Resists Music Industry Pressure 634
Drew writes "Steve Jobs is opposed to raising the price of online music sales, calling the music industry greedy, and
implying that price increases will bring about more piracy." From the article: "It may not seem like it, but it has been more than two years since the launch of the iTunes Music Store, and that alone has the music industry brimming with hopes for price-adjustments. They also don't buy Jobs' argument that a price increase will result in more piracy, but probably not for the reasons we might assume. I've long been of the conviction that piracy is not nearly as large of a problem as the RIAA makes it out to be." Also covered at Macworld.
What? (Score:5, Insightful)
Paradigm Shift (Score:2, Insightful)
Sure, something fundamentally needs to change with the record companies and their formulaic approach to building bands, instead of finding real talent out there, but that is a different argument.
The fact of the matter is, I should be able to rip my CDs, and purchase music online for whatever price, then I am on record as purchaseing/owning the right to listen to those songs. If 5 years from now songs that I have purchased already have been re-mastered from studio recordings and are now available in lossless, DTS 5-channel, MPEG-2 10 channel, whatever... I SHOULD BE ABLE TO FREELY DOWNLOAD THE NEW VERSIONS as they represent a more accurate representation of the recording I purchased the rights to hear. The money I paid was for the recording the artist laid down in the studio. If there is a new means of transmission that more faithfully reproduces the listening experience of that recording, great, give it to me. If not, when I purchase that song, give me the reel-to-reel, or DAT tape, or whatever.
How come no one has ever brought this up?
A different approach to the online music market (Score:3, Insightful)
It's revolutionary, and it's a model that iTunes could stand to look at. Never will I pay 99 cents a song again.
Marginal cost is nearly $0 (Score:5, Insightful)
As the price of reproduction drops, the price of the item should drop correspondingly. At least that's how the economic theory goes. Profit margins drop but profits are made through bulk sales, much like today's commodity ethernet cards and memory chips. It allows for many companies (or artists) to create a product, spurring competition, providing choice. All of this is good for the consumer.
Yeah, the RIAA is still trying to stick it to us.
Fake Piracy (Score:2, Insightful)
The music industry is just greedy and they're completely out of control. Someone needs to shut them down and quick. However, without their money many artists probably wouldn't get their albums published, so it's kind of a necessary evil that we have to deal with.
RIAA too greedy? (Score:1, Insightful)
Next he'll be saying that the movie industry is charging too much for all the product placement.
I remember when... (Score:2, Insightful)
WTF!?! (Score:5, Insightful)
Ok. First of all, I don't know exactly what they're talking about - online or Pressed CDS. But, selling a song for $.99 or $9.99 an album WITHOUT HAVING TO PRESS A CD, MAKE COVER ART, have a jewel case, and truck it to the stores, is pretty steep. I was part of a survey a couple of years ago asking "how much would you pay to download a song?" I answered, "$.25" Asked why, I answered, "Because the music publishers do not have any media costs other than bandwidth and royalties. Excluding the royalties (which are a constant), bandwidth is MUCH cheaper than jewel cases, CD, physical distribution costs (trucking of the CDs, etc...) and the artwork."
In short, I think Jobs is right on the money here.
Re:A different approach to the online music market (Score:4, Insightful)
Maybe naive (Score:5, Insightful)
Artist -> Online shop -> Customer makes more sense to me.
The online shop (iTunes for instance) could take care of the marketing as well.
There is no such thing as a FAIR price... (Score:5, Insightful)
The seller of a product will usually set the price of a product to a level that he thinks the market is able bear without turning to alternatives (theft, competition, abstinence, etc.). If the good ole' boys over at the RIAA think that $9.99 for a downloadable album is not enough (and trust me - they do!) then they'll explore every nook and cranny if they can get away with charging a few bucks more! Businesses have no sense of 'fair', 'good', or 'evil' - they produce a product and will try to squeeze as much profit out of their customers as possible. If the profits are less than expected than they will try to 'instill demand' (think advertising and other types of brainstorming) to somehow part Joe Shmoe with part of his earnings.
At the end of the day, it's a voting game - they rise the prices, we go back to piracy. Trust me, economic consequence is the only language they understand. Companies are by default pathological entities that have no compassion, vision (in most cases at least), remorse, or concience. It will squeeze you for all you got - that's why it is a commercial entity! The democratic mediator is the consumer and obviously most of the responses on this thread (it just started and I'm an early poster, but let me just guess ;-) will be against a price hike. If nothing else the RIAA is looking in the wrong direction - as competition brews I believe that these prices should come down, not go up. After all, there is no physical media involved and selling bags of bites is a great business to be in...
Re:Paradigm Shift (Score:4, Insightful)
And I thought to myself, that if she saw me listening to her music on my iPod she's probably be angry with me, but how many times did I buy the same album by her? I could actually count 4 times: LP, Cassette, CD, remastered "special edition" CD. The only records of hers I haven't bought more than once are out of print.
Prices need to go down not up (Score:5, Insightful)
And of course for non-chart music, you could probably pick up the actual CD for less just by scouring eBay, zShops or even a sale in a regular bricks & mortar store.
Re:What? (Score:2, Insightful)
Proprietary/Non-Portable format? What, you plan on running it on what? iTunes plays on Windows and Mac. What more do you want? Linux? There are plenty of ways to get a purchased song to work on Linux. Oh, and you do get album artwork.
Go back to drinking whatever flavor of Kool-Aid you have been drinking (me thinks it's Linux/Microsoft blend).
Re:WTF!?! (Score:5, Insightful)
this is bad (Score:5, Insightful)
I'll probably get modded as a troll for not saying "apple R0X0RZ", but whatever.
Re:What? (Score:2, Insightful)
Re:Paradigm Shift (Score:4, Insightful)
I find I like the original recordings better mostly. It's like Black and White movies. The artists work with whatever medium they had at the time, and got it to sound (or in the case of B&W movies, look) the way they wanted, and that was that.
I'm sure that the Beatles could have done some funky ass stuff with Dolby Surround. Lucy in the Sky with Diamonds could have been tripped out big time. But they didn't have access to it. So....why would I want a DTS5 channel version of it? Did John help remix it? No.
I do like my classic jazz remastered. But anything past like 1965 or so should be left alone.
Re:Greed. (Score:5, Insightful)
Re:RIAA too greedy? (Score:3, Insightful)
The music industry does not pay the bandwidth cost of the iTunes Music Store. Apple pays for that from the profits generated from iPods sold.
Why are you championing Real? Did Real pioneer the concept of buying music online? No, they were the main force behind MusicNet, which was a music rental system. It was totally unsuccessful.
Real also went ahead and broke the Fairplay DRM, which arguably is a violation of the DMCA. So again, how is Real the good guy here?
Re:Maybe naive (Score:2, Insightful)
Maybe a little. Depending on the style of music and their training, the artists might need some quite expensive equipment and trained personnel to come up with a production that you actually would enjoy listening to.
That does not mean your point is entirely wrong. But you might want to insert a producer in the production chain.
Re:On a semi-related note... (Score:5, Insightful)
See "Apple Records vs. Apple Computer".
Re:A different approach to the online music market (Score:3, Insightful)
No worries. (Score:5, Insightful)
What are the labels going to do if they don't like the terms of iTunes music store? Go to another store? No.
1. No other store has near the volume or reach of Apple's. No one else has the brand recognition or ease of use.
2. By far the number one music player is the iPod, and only the Apple music store can sell protected music files that work on that player. The labels could try and sell unprotected MP3 files but this seems unlikely.
So going above 99 cents per track means either convinving Jobs (not likely) or moving music off the Apple music store -- which means lost sales and possibly more piracy. Not going to happen. Jobs is in a great position.
Re:What? (Score:3, Insightful)
If you get a CD, you can rip it to whatever format you like - MP3, AAC or OGG - all unprotected, and play it on just about anything you damn well please.
Buy (or rent) a track from a store (okay, the 'big name' stores), you're stuck to playing it on a iPod, OR a WMV-based player, but not both.
So... what flavour Kool-Aid are YOU drinking?
Re:Paradigm Shift (Score:5, Insightful)
Just like you should have the rights to download OS or applicaiton updates forever? If you weren't happy with your music choice at the time you should not have purchased it, simply because it's improved later does NOT give you the right to receive a free upgrade.
"How come no one has ever brought this up?"
Because it is a stupid idea.
Re:allofmp3.com (Score:4, Insightful)
Because iTunes isn't operating out of the ex-Soviet-Union.
Re:What? (Score:5, Insightful)
Many people see a benefit in being able to just push a button and have their music right freakin' now. They don't particularly relish the idea of getting up, driving down to the mega mart or strip mall, digging through the racks in the hopes that the album they want is there, waiting in line to pay, and driving back home just to get a stupid song. Why jump through hoops when you can get it now for the same price?
What if all you want is one song? Heck, what if all you want is five songs off a single ten-track CD? Is it still of great value to you if you're spending twice as much for something you're only half interested in?
Many people don't give a rat's ass about album art, four-color glossy lyrics inserts, a video of the band brushing their teeth before bed, special offers from RecordClubInternational and all that. Many people don't even care about having the physical CD; in fact, many people would rather just not have another piece of plastic cluttering up their space. If all you want is music, there isn't much value in yet another jewelcase loaded with features you'll never use.
Finally, CDs aren't exactly portable formats anymore--go take a look at some of the caveats listed along the bottom of the CDs at the store, especially pertaining to playing audio CDs on a computer, especially pertaining to non-Windows computers. At least with iTMS, you can burn your music onto a completely unprotected audio CD. Yes, this is suboptimal for the gold-plated audiojack crowd, but it works just fine for those of us who are listening on car stereos, $30 earbuds and computer speakers.
iTMS ain't perfect, but to be perfectly frank, it's miles ahead of pretty much any other mass distribution model out there today, CDs included. For the typical music listener, there's little reason to get a CD instead of getting a song off iTMS.
Re:What? (Score:3, Insightful)
Online distribution changes that; distribution costs are rock-bottom. Many of those in the record industry probably felt bullied into the iTMS-- it was obvious where things were going, and whether they liked it or not, they had to get involved in the future.
However, bumping up prices becomes a win/win situation for the record companies. Either consumers pay the high prices, which represents amazing profit margins, or consumers refuse to pay, which means they stick with physical media.
You just have to remember that the RIAA selling music through iTMS is, at best, an uneasy alliance. If the RIAA wants to keep their strangle-hold on music distribution, they really have to sabotage online distribution sufficiently to keep it a niche market.
Re:Paradigm Shift (Score:2, Insightful)
Not really. You bought two things - the right to the intellectual property, and the media it was recorded on or transmitted over (and the retail mark up, storage/transportation costs, ect).
I agree that you shouldn't have to pay for the former a second time (but how that could be enforced, particularly without slashdotters complaing about privacy is beyond me), implying that you should not have to pay for the later means that people should work for free, just for you.
Re:A different approach to the online music market (Score:2, Insightful)
Re:Marginal cost is nearly $0 (Score:5, Insightful)
That's how the economic theory goes in a free market. Do not confuse the intellectual monopoly industries with free markets.
For a monopoly market, the price does not drop. It rises to follow slightly below the pricing point at which consumers can no longer afford the product. When production costs fall, great, more profit or money to spend on marketing. When people purchase more, for example, due to marketing or rising disposable incomes, raise prices until sales slow again. Use new money for profit or marketing. Rinse. Repeat.
As long as intellectual monopoly laws interfere in the free market their prices will simply never drop. That's simply an unavoidable economic consequence of these legal constructs.
Re:What? (Score:5, Insightful)
I own over a thousand CDs. I ripped them into AAC format for a couple of reasons, mainly because they are smaller and sound better than 192 VBR MP3s. That is what I was ripping my stuff until AAC came out.
As for players, I've tried a bunch. I owned one of those Creative MP3 players back in 2000. The one that is shaped like a CD player. Crap. iPod still is the best player. I have students who have Dells, and Rios, and whatever else. They are not as good as the iPod in my opinion.
I still buy CDs. I have only bought 20 or 30 songs off iTunes. Yet I seriously doubt I will be playing it on anything other than an iPod in the next couple of years....
Oh, please shut up (Score:3, Insightful)
Oh, please! Piracy and the "n word" are two completely different things and topics altogether. The "n word" (I don't feel like typing it here) isn't just a descriptive adjective, it is a racial slur. Piracy is a term used for infringing on the copyrights of software and music by copying it without the owner's permission. Please never compare "piracy" to a racial slur (especially the "n word"); it makes you look immature and ignorant.
And you condone piracy? Hey, I can't stand the RIAA's practices as much as the next Slashdotter, but shouldn't the artists get fair compensation from their works? If we don't buy music from the artists, then the artists won't get compensated for their performances. Piracy, to me, is selfish and doesn't reward the artist at all. Now, do I believe that the RIAA should be suing 13 year olds left and right? No. However, I believe that piracy is wrong and shouldn't be condoned.
Just NEVER compare piracy to the "n word" ever again!
Re:Greed. (Score:5, Insightful)
They are... (Score:3, Insightful)
Of course, becoming an actual record label might not be a good idea. First of all you have legal issues with Apple (I doubt Apple could afford to buy Apple Records), then you have the "expected" crap that artists get; the cars and the image and all of that junk. Then you have to fight with MTV and the RIAA to get any playtime. And by the time you've gone through the whole cycle, you're just as bad as the record companies that exist now.
iTunes is allowing the model of music to change. Instead of skimming as much as possible, and giving it back in the way of highly-discounted cars, album deals, etc, Apple can just let the consumers consume. And the artist gets the big part of the money made. Win-Win if you ask me.
Re:Paradigm Shift (Score:3, Insightful)
Re:What? (Score:3, Insightful)
I'm sure I'll not be the only one to point this out
All of the albums I've bought over the last several years have been from niche groups, none of whom will ever receive any airplay on any commercial radio (except college radio maybe).
I like all of the songs on the albums I buy. I find the "only one listenable song" group of artists to be the ones most heavily hyped and promoted by the music industry.
Burned to CD for my home and car, on my ipod shuffle, uploaded in MP3 format to my office machine so I can have music there. Pretty much where I so choose when and how I listen to it.
Hmmm
I've never bought anything from iTunes, nor am I likely to. I buy all of my own CDs and rip 'em my own damned self. The collection is created on/resides on a FreeBSD file server, and served up to the devices I want to attach to it.
That's what I expect to be able to do with my music.
Re:No worries. (Score:3, Insightful)
OK, I can live with that.
m-
Comment removed (Score:3, Insightful)
Re:A different approach to the online music market (Score:5, Insightful)
I'm appalled there are still people who believe in that myth. I know bands who recorded their albums in near-pro quality for a few thousands dollars. Studios, equipment and engineers are only expensive if you want them to be. For example, if you need to use computers to pitch-correct your vocals because your fake so-called "artist" can't sing (that's 90% of the shit you hear on radio). Record producers and other middlemen get way too much control and too much credit for the work of artists.
DZM
Jobs at least understands the consumer (somewhat) (Score:2, Insightful)
Re:Greed. (Score:3, Insightful)
Apple is essentially in the position of being a huge music reseller, like any record store. That's a very different thing from becoming a music label.
Re:I'm with you, Steve (Score:3, Insightful)
Re:Greed. (Score:5, Insightful)
Oh but that's just good press for Microsoft you say. So what? Running the largest charitable foundation in the world is an excellent way to get good press, and it benefits people all over the world.
So Jobs gets a $1 salary. Wheee. And a Lear jet, and hundreds of thousands of dollars in reimbursements from Apple.
I'm not trying to say Jobs is the evil one. Hell, both of them are business men, both have used nasty business tactics (if you think Jobs is a saint, read some of what Woz has said happened at Apple), both of them are rich and can afford a fancy house or personal jet plane. There is no reason to deify or demonize either of them. But buying into Apple's PR image of Jobs is just silly.
(Larry Ellison however, IS the devil incarnate)
Re:What? (Score:3, Insightful)
I don't care if the iPod is way cool (I do like it) and I'm not bashing an innovative and original company like Apple (because the world needs more of them), this is a rant against the media providers who insist on treating me like a criminal before I've even committed a crime and Apple's collusion with them.
I want to buy their stuff but I'm not prepared to be told how I can use it. Only the IT industry have anything as ridiculous. I don't have Fiat telling me what I can do with my car, why do Apple as the agent of the recording industry have the right to tell me where and when I can listen to my music?
Re:Greed. (Score:5, Insightful)
If you don't think there are real costs associated with distributing music, you are mistaken. The server space, the CPU, and the bandwidth needed to store, process, and deliver the ~5mb/each songs to the end user, are not free. Apple pays royalties on the songs and pays for the above, so their profit, while significant, is not 100% of the money they get.
I, for one, applaud Jobs - instead of succumbing to pressure and using the price increase to increase his profit margins, he's doing something decent by resisting the record companies' pressure. Granted, his motives may not be entirely altruistic, but nevertheless, Apple is setting a superb example that, no doubt, many companies will follow. If Jobs keeps prices at 99c a song, competing services will hardly be able to raise prices without losing customers to Apple - something they decidedly do not want to do. So in this case, Jobs is keeping the market stable in the face of significant pressure from the record companies.
The age of free legal (or even semi-legal) mainstream music has come and passed. You still have advertisement-supported radio, but to legally get ad-free, high-quality music, you can no longer go to a source like KaZaa and BitTorrent and expect the transaction to be risk-free (although I haven't heard of anyone being nabbed for getting MP3s from newsgroups, IRC, or various FTPs.) Not to say that there is significant risk - about 15 of the ~1200 tracks on my iPod were obtained through "good" sources, and I've yet to hear a word from anyone - but it is no longer as convenient or as safe to download them illegally as it is to buy them. This creates a balancing act between the difficulty of obtaining music freely/morality/risk factor and the price of legal music, and Jobs realizes that disrupting that balancing act by raising prices could create a trend of dissatisfied customers that decide to switch to illegal methods.
What puzzles me, though, is how blindly record companies are pressuring the distribution networks that are, in a way, their safety net for the tech-savvy majority of the highly appealing 18-25 demographic. While I've stopped expecting intelligent decisions from them long ago, the RIAA are now crossing the boundary between pure greed and pure stupidity. I believe that this will, eventually, kill them, and I, for one, have no objections to that.
Re:What? (Score:5, Insightful)
Heck, if you're gonna break the law to get your music, why not just steal a copy of the CD from the record store? You get a top-quality version with all the trimmings, and you'll face a much gentler punishment if you're caught doing it.
Re:What? (Score:3, Insightful)
You said nice and iRiver in the same sentance? Wow. Grado headphones are overrated. Sennheiser 580s all the way man.
How can you say iTunes is the worst player ever? What do you use? WinAmp? Yikes...
Re:What? (Score:3, Insightful)
Steve Jobs and public schools (Score:2, Insightful)
Re:What? (Score:3, Insightful)
I want it to work on my MP3-compatible car cd player (without having to re-encode it and decrease the quality). Being able to listing to over 6 hours of music and never changing the disk is a wonderful feature, and I refuse to be denied it because of some jackass putting usage barriers in place for PAYING CUSTOMERS.
Miss them? Vinyl isn't dead yet! (Score:3, Insightful)
Okay, admittedly, it depends where you live. I actually spend most of my time in Edmonton, MiddleofnowhereAlberta, and here it's damn impossible to find new vinyl. Most of what I currently have I picked up from Zulu Records [zulurecords.com] last time I was in Vancouver; every record store I went to there, though, had actual records, so I'd go as far as to say that in major cities across North America you'll be able to buy new vinyl with at most a small amount of hassle (the ones I picked up at Zulu Records were little pricier, if at all, than the CD version would be; and to be able to find an unopened copy of "Surfer Rosa" [wikipedia.org] for less than a new CD of the album would be is just wonderous).
On a more topical sidenote; it does get a bit tricky when speaking of modern recordings, as to the sound quality. I was tempted to pick up a copy of "With Teeth" [nin.com] recently, but I resisted; true, the track order is even different and includes a song not on the "normal" version (Trent Reznor notably recently railed against the terrible lack of options for packaging nowadays with CDs, and so like he often does, the vinyl release of his latest album gives a big thumbs-up to vinyl collectors), but I had to admit that I already had the dualdisc version . . .
See, older albums would have been recorded with analog means, but anything relatively recent is going to have been recorded at least in a large part digitally, and mixed thusly and so forth. So often analog won't give you nearly the theoretical audio-quality increase that it used to with older releases. Furthermore, as is the case with the aforementioned dualdisc version of "With Teeth", the album might come in higher-than-CD quality digital, with characteristics that vinyl can't reproduce (in this example, having been recorded and engineered, by someone who really knows how to do this, in 5.1).
So, alas, vinyl has its strong suits and its weaknesses. But it certainly beats iTMS quality, for more than just the cover art question, and I could never give up the ability to flip on Side B of "Surfer Rosa" and here that "whooooooooo-stop" as Where Is My Mind begins with those slight, slight crackles audible clearly at the insane volume I've turned it up to . . .
So, parent, props to you, I mostly agree, but I'm going to paraphrase: Break out the old turntable, grab a favorite vinyl from a store, and remember how music still can be!