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Music Media

Would You Pay 5 Cents For a Song? 905

Posted by CmdrTaco from the over-and-over-again dept.
irikar writes "An academic at McGill University has a simple plan to stop the plague of unauthorized music downloads on the Internet. But it entails changing the entire music industry as we know it, and Apple Computers, which may have the power to make the change, is listening."
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Would You Pay 5 Cents For a Song? More

Would You Pay 5 Cents For a Song?

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  • No matter what free will always win... (Score:3, Insightful)

    by garcia ( 6573 ) * on Wednesday March 09, 2005 @11:39AM (#11889499)
    Yet, Pearlman went further. He said that since this plan puts the onus on a massive Internet presence to distribute all the music in the world, why not have such computer companies as Apple and such major Internet companies as Yahoo simply buy up the world's four major record labels? Pearlman was careful to add, though, that he doesn't see his plan killing off demand for CDs.

    And somehow this isn't a pie-in-the-sky idea? Oh give me a break! So what? Apple, Yahoo, Google, Foo buy up the companies and what happens? Their bean-counters decide that well if we can make billions selling songs for .05/download we could make 10x as much if we sell them for .50/download and 20x as much if we sell them for .99/download.

    Pearlman said that Pfohl misunderstood the idea. Then again, another record-industry type, casually speaking to Pearlman after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?

    Thank you so very much for proving my point.

    It would also obliterate musicians' choices on how their music could be sold by conscripting them into a 5-cents-a-song system. And it would destroy record companies' incentive to invest in new acts, Pfohl said.

    Somehow I doubt that most of the musicians that are under the current cartel's contracts care how their music is distributed as long as they get paid. Those that don't give a shit already allow their music to be distributed for free on the Internet.

    Let's stop with the whining and bitching about the artists you sleazy fuckers and start talking from your own business perspective. Everyone and their grandmothers know that you don't give one iota of a shit about the musicians unless they are filling your ever greedier pockets with money that you can throw at more shitty musicians and sympathetic lawmakers that will kowtow to your bullshit. Someday you will lose but I'm certain that this plan won't do it to you...

    It amazes me that no one looks at the successful bands that have been distributing their music for free for years and says, "hmm, why is this still working for them and we are continuing to put out class acts like Ashlee Lipsynchson and we are hemorrhaging money?"

    Some of the more recent big bands that allow their music to be distributed include Wilco and Los Lonely Boys. Wilco won the best alternative album this year. Hmm and yet they allow me to download their shows. Guess what RIAA? I would buy their album ANY DAY over someone like Ashlee who lip synchs her live crap and refuses to let us hear it for nothing. I mean, it's not even her doing anything why shouldn't it be free?

    Just a FYI Apple, no matter how cheap something is it is NEVER as cheap as free. Free will always win out.

    • No matter what free will always win...dead end. (Score:5, Insightful)

      by Anonymous Coward on Wednesday March 09, 2005 @11:43AM (#11889555)
      "Just a FYI Apple, no matter how cheap something is it is NEVER as cheap as free. Free will always win out."

      Until there's nothing left to be free. Then free loses badly.
    • Seems like a very far-fetched idea that the computer giants could buy the four major music labels. Would they even have enough money to do that?

    • Re:No matter what free will always win... (Score:5, Insightful)

      by Henry V .009 ( 518000 ) on Wednesday March 09, 2005 @11:45AM (#11889598) Journal
      Their bean-counters decide that well if we can make billions selling songs for .05/download we could make 10x as much if we sell them for .50/download and 20x as much if we sell them for .99/download. Unless their bean-counters have taken Econ 101 and know the most basic things about supply and demand. As you increase price, you decrease volume. There is always a sweet spot that maximizes profit.

      • Re:No matter what free will always win... (Score:4, Insightful)

        by stecoop ( 759508 ) on Wednesday March 09, 2005 @11:53AM (#11889712) Journal
        As you increase price, you decrease volume. There is always a sweet spot that maximizes profit.

        Well if you would take Marketing 101 you would learn a couple of other formulas too. You notice at Pizza hut that they sell pizza for $10 dollars for the first one and say $7 for the second one. There is a profit point during the transaction that you can maximize returns buy adding another one to a product that you are already going to buy. Now you have $10 for the 1st $7 for the 2nd and 5$ for the third. Well as you eat more and more pizza there becomes a point where you wont buy another no matter what the price is and then you have reached saturation at that price point. Therefore even though you have saturated the market you can still gather further funds from a fixed sale/profit point.

        • Re:No matter what free will always win... (Score:5, Funny)

          by Sj0 ( 472011 ) on Wednesday March 09, 2005 @12:07PM (#11889901) Journal
          Fast Food is an interesting one because the more calories you can give to your customers cheaper, the better chance that they'll return soon to consume more. :)

        • Re:No matter what free will always win... (Score:5, Funny)

          by beakerMeep ( 716990 ) on Wednesday March 09, 2005 @12:40PM (#11890434)
          Well if you would take Pizza Eating 101 you would learn that I can eat many, MANY pizzas.
        • you've just described "Diminishing Utility", which is something that you learn in Econ 101 as well. Quite frankly, it does nothing to disprove his point, as it doesn't negate the law of demand. Not only that, the Utility considered in downloadable music is FAR FAR too large and the diminishing of it is far too small to make it worthwile to mention in this discussion at all.

      • Re:No matter what free will always win... (Score:4, Insightful)

        by rainman_bc ( 735332 ) on Wednesday March 09, 2005 @12:22PM (#11890095)
        Unless their bean-counters have taken Econ 101

        Obviously you never took economics 101 either.

        Now true the cheaper you go, the more a person will download. The trick, however is to maximize profits. They are in business to make money. Period.

        They feel that 99 cents / song maximizes their reveues. Their choice - it's their product, and if you don't like it, move on and listen to the radio.

        • Re:No matter what free will always win... (Score:5, Insightful)

          by DeathFlame ( 839265 ) on Wednesday March 09, 2005 @12:56PM (#11890662)
          And this is exactly what the article is adressing.

          That they are wrong about their pricing, and people have moved on, but not to radio, to downloading the songs for free. The only way to win back these people downloading for free is to offer a price of nearly free. Most people downloading 1000 songs a month would never pay $1 a song. But would they pay $0.05 a song? Maybe. And more likley are the people downloading 100 songs a month. $100 is a lot of money.. but $5? Do you think there are 20x the number of people downloading 100 songs a month than buying 100 songs a month? Probably. Therefore, there is money to be made.

          And any mention of artists not liking this sort of distribution system is crap. "Um.. no I don't want to sell my songs for cheaper so that everyone can hear them, only those spending lots get to hear my songs"

          Someone mentioned above something about higher pricing to make it appear the CDs (and by association, the music) 'worth more'. Well it's obvious by the number of downloaders that the CD's are not 'worth more' because of their price...

        • Re:No matter what free will always win... (Score:5, Insightful)

          by JWW ( 79176 ) on Wednesday March 09, 2005 @12:58PM (#11890691)
          But illegal downloading far outstrips legal downloading. What the article is really talking about is what would it take to get nearly everyone downloading music legally. I believe that his price point would probably do it as it is an almost disposible amount of money to consumers. And hey, you would have a legal download, too.

          Now the why not 10 cents argument is valid, but I think its still basically a curve. Where 5 cents is the point at where almost everybody leagally downloads music, I think 10 cents might be the point at which half of the people leagally download music.

          The music industry is being greedy, not logical when they determine their pricing right now. We we already burned on the change from cassettes to CD which were going to be much cheaper once they were adopted. So the real feeling allowing people to live with the fact that they're illegally downloading music is that the price for music is obscenely high. No CD is worth $ 16, most aren't even worth $ 13, some aren't even worth $ 2.

          In real manufacturing, real market forces cut the margins down, but with the recording industry prices are artifically set by the RIAA.

          If the recording idustry took an honest look at their options this 5 cents/download option would make them huge amounts of money and save them boatloads on legal fees and bribes for government officials.

          • Re:No matter what free will always win... (Score:5, Interesting)

            by Kombat ( 93720 ) <kevin@swanweddingphotography.com> on Wednesday March 09, 2005 @02:40PM (#11892098)
            The music industry is being greedy, not logical when they determine their pricing right now. [T]he price for music is obscenely high. No CD is worth $ 16

            The hair on the back of my neck stands up whenever I hear someone claim that "CDs cost too much." CDs are the cheapest form of entertainment, on a dollar-per-hour-enjoyed basis of anything I can think of. For the price of $12 or $15, you can buy an hour's worth of high-quality (fidelity, if not artistic merit) music and enjoy it over and over, for thousands of hours, as many times as you want. And when you finally get bored with it, you can sell it and recoup some of your money.

            NOTHING else is as cheap. No pro sports, concerts, operas, plays, ballets, movies, dinners, truck shows, car races, or comedy clubs give you anywhere near that many hours of entertainment, for anywhere close that such a low price. Nor can you get any of your money back when you're finished "enjoying" anything I just listed, except for CDs.

            Quit complaining. CDs are cheap.
            • Um, no. How about DVDs? Many of them are cheaper and you can enjoy them as long as you want too. And on a dollar-per-hour basis, practically any video game has CDs beat too. Pretty much any form of entertainment you do at home is cheaper than CDs, but of course you decided to compare it to the wrong kinds of things to make your point.

        • Re:No matter what free will always win... (Score:5, Insightful)

          by Dashing Leech ( 688077 ) on Wednesday March 09, 2005 @01:14PM (#11890945)
          "Obviously you never took economics 101 either. Now true the cheaper you go, the more a person will download. The trick, however is to maximize profits. They are in business to make money. Period."

          I'm confused at your point. The "sweet spot" he was talking about was the maximum profit point. That is, selling 100 units at 1$ each earns you $100 whereas selling 10,000 units at 5 cents a piece earns you $500 dollars. The question is where is price*volume at a maximum and that requires understanding the volume that people will buy as a function of price.

          "They feel that 99 cents / song maximizes their reveues. Their choice - it's their product, and if you don't like it, move on and listen to the radio."

          That's true. Any company is allowed to do things less than best for themselves and even drive themself into the ground. It certainly doesn't mean 99 cents actually is the sweet spot to maximize their profits thought. They might make a lot more money at 5 cents per song if that entices more than a 20 fold increase in sales.

      • Re:No matter what free will always win... (Score:4, Interesting)

        by nagora ( 177841 ) on Wednesday March 09, 2005 @12:33PM (#11890303)
        Unless their bean-counters have taken Econ 101 and know the most basic things about supply and demand.

        However, in Econ 301 they learned that running a cartel to fix prices is the best system of all, so that's what they did. Supply and demand have nothing to do with the record industry's prices.

        TWW

      • Has the music industry taken Econ 101 though? (Score:5, Insightful)

        by metamatic ( 202216 ) on Wednesday March 09, 2005 @01:57PM (#11891516) Homepage Journal
        As you increase price, you decrease volume. There is always a sweet spot that maximizes profit.

        Well, I don't know about you, but my perception is that the music industry is way over to the right of the "sweet spot" on the sales-against-price graph. I hardly ever buy CDs these days, because I hardly ever see them for a price I'm willing to pay.

        When Mute Records released a sizeable chunk of their back-catalog for under $10, I sent in a $150 order--as opposed to a $0 order while the prices were $15 and up.

        As I wrote to a record store owner who was wondering how he could stay in business: I could easily put together a list of ten CDs I'd buy tomorrow if they were $10 or less. But they're not, so I spend $0 and wait for a sale.

    • I didn't see anywhere in the article that answered the "who is going to pay for this?" question. Based on what it costs Apple to run the iTMS, somehow I don't see five cents doing much more than covering overhead, if that. If you're just ignoring copyright law and distributing illegally, like a certain site oft-mentioned here, you could make a profit out of it. But if everyone does it, say hello to less new music... right?
      • As idealistic as this sounds I don't think people get into music for the money. Think about how many bands you've seen playing clubs. Those guys don't make shit from thier music and a lot of them have to have day jobs to make a living. So would we "say hello to less music"?

        Maybe not, but if what you're saying is right, we might end up with less career musicians.

        Although, if you look at some of those old bands that are still touring (aerosmith, the stones etc.) and are just rehashing thier old stuff over

    • Re:No matter what free will always win... (Score:5, Insightful)

      by Migrant Programmer ( 19727 ) on Wednesday March 09, 2005 @11:48AM (#11889651) Journal
      Their bean-counters decide that well if we can make billions selling songs for .05/download we could make 10x as much if we sell them for .50/download and 20x as much if we sell them for .99/download.

      Please look up the term "elasticity" in your friendly neighbourhood economics textbook.
    • "Pearlman said that Pfohl misunderstood the idea. Then again, another record-industry type, casually speaking to Pearlman after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?

      Thank you so very much for proving my point."

      it doesn't not prove your point, it mearly states that it is a counter point, to which I say the market would decide. The market will drive the price down, if that price is below cost, the business will cease. Unles

      • Re:No matter what free will always win... (Score:5, Interesting)

        by RevMike ( 632002 ) <revMike@@@gmail...com> on Wednesday March 09, 2005 @01:12PM (#11890919) Journal
        I think you should know, AShly simpson is an 'entertainer' not a musician. No, I don't personaly find her entertaining. PIF, most people don't. I used to think I was just out of touch with the music scene. I've been talking to be in the industry recently and it turns out a lot of these names everyone heres about don't sell many tickets. Most people in one of there concerts are people in the industry that are there to be seen.

        My wife and I have been talking about this quite a bit recently. We've been watching "American Idol". Anwar Robinson is clearly the most musically talented person to ever be on that show, but the stuff he does is not what the record companies want to market. This past Monday he got up and sang Louis Armstrong's "Wonderful World". He started out singing like Louis Armstrong, then series of runs as he moved the style into something more reminicent of Sammy Davis Jr., and finally ended the song in a soul style. His talent should win, but he won't fit into the marketing machine of the record companies.

    • Comment removed (Score:5, Interesting)

      by account_deleted ( 4530225 ) on Wednesday March 09, 2005 @11:56AM (#11889750)
      Comment removed based on user account deletion
      • The subject line is facetious; I listed to a couple of tracks and they sounded pretty good. If you were playing my local club I wouldn't suddenly feel compelled to go outside for a smoke.

        But I wouldn't call the marketing machine a BFD. It's the difference between you doing this for kicks on evenings and weekends and becoming a multi-zillionaire, making videos, playing stadiums, getting a heroin habit, and eventually your own biography on E!.

        Seriously, it's a matter of to-each-his-own. You wanna make mu

      • Re:Speaking as a musician (Score:5, Interesting)

        by ZephyrXero ( 750822 ) <zephyrxero.yahoo@com> on Wednesday March 09, 2005 @12:57PM (#11890672) Homepage Journal
        Your argument pretty much justifies the things that I have been saying for years. Most bands don't make hardly any money off CD sales in the first place, they make their money through live shows and merch. So, I never understood why all these big bands/performers [metallica.com] complained so much about us downloading their songs...

        But, then you also have to take into consideration musicians who only produce studio work and never play live. There are quite a few people, especially in electronica, who only record music and never set foot on a stage.

        I say a mixture is in order. Release all your songs online in a lossy format, with a slightly sub par bitrate, and allow them to be distributed freely (96k mp3 or even better, a Q0(~64k) Ogg [vorbis.com]). Then charge people for the "full quality" CDs or Lossless (FLAC,etc) files. I wouldn't mind paying $1 for each song if I got to download a "decent", full length version of it for free and try it out for a while first. And of course, no DRM encumbered formats would be used ;) I always "try before I buy" with my music these days. If you make good music, you have nothing to lose. If you are a no talent, one hit wonder pop star, then you don't deserve to be in the music industry in the first place. My current favorite band, Celldweller [celldweller.com], has no record label and distributes the majority of their music from the web [cdbaby.com].

    • Re:No matter what free will always win... (Score:5, Insightful)

      by jigoman ( 853944 ) on Wednesday March 09, 2005 @11:57AM (#11889759) Homepage
      While you're completely right that nothing beats free, you can't deny the number downloads iTMS has garnered since its start. While free music will always be available, don't underestimate the 'guilt-free' factor. A clean conscience for 5 cents/song is about as good a deal as you can get.
      • They've been given it away for free for years on the radio. I can go over to my friend's place and listen to his music for free. Plus the whole concept of receiving payment for recordings of music was unheard of, prior to the advent of recording technology. Prior to that, musicians got paid when they played...to an audience. Now the ability to mass replicate digital media across a shared network has rendered the "payment for recordings" model obsolete, which had in turn made obsolete a different model.

    • Re:No matter what free will always win... (Score:5, Insightful)

      by TheKubrix ( 585297 ) on Wednesday March 09, 2005 @11:58AM (#11889778) Homepage
      I'm not so sure about that. Granted free is better than paying even a penny, but regardless going via the "free" route is not only more difficult, but leads you down a road of problems. On the extreme end of the scale you can end up having the RIAA knock down your door. Then theres the problem of having spyware/virii ridden software (to this day I still clean/remove Kazaa from people's computer and slap them on the hand/head). Furthermore, theres the issue of not having an entirely clean track. You have to be concerned about having the right song, having the entire song, and then quality, AND the amount of time it takes to be in the queue and to finally download it. All that for what? To save you a few pennies? Unless you're a complete cheap bastard or simply bent on the idea of ripping off musciains, then a major drop in prices will DEFINATLY help. Essentially if they can devise a system where you are a click and a couple minutes (assuming bandwidth conex) away from getting an album for a couple bucks, then I'm positive that pirating would go down.

    • Free doesn't always win - Re:No matter what ... (Score:5, Insightful)

      by jackDuhRipper ( 67743 ) on Wednesday March 09, 2005 @12:04PM (#11889852) Homepage
      Getting music is only "free" if your time and effort are worthless: if it's easier, faster and of higher quality to get the new Beck record from iTunes , it's worth it to purchase legitimately than to try and get it other ways.

      Much like the scheme presented in the article, please remember that the "free" file sharing networks requires a broad base of participants to make them run. The utility of the "free" networks improves or deteriorates based on the numbers of people engaged in the activity of sharing freely:

      even at US$.99, I would bet there has been an affect on the quality/quantity/availability of music on the "free" sharing networks. Presumably, that would deteriorate further if "legitimate" online services appealed to an even broader audience (as some or all of that broader audience would likely participate less in the "free" networks).

    • The artists make very little money from music sale (Score:5, Interesting)

      by big-giant-head ( 148077 ) on Wednesday March 09, 2005 @12:05PM (#11889877)
      They get like maybe 1$ per cd. They've always made money from touring. The rule has been the record companies get the money from the sales and the artist gets the money from touring.

      Now the greedy record companies want a piece of artists touring money as well. The folks killing music right now are the record labels not the downloaders.

      This is a great idea, a band could pay thier own studio costs, put the music directly up for download and then who needs the record companies??
      I don't mind right now paying $.88 a song, I do have a problem that very little of that actully goes to the musicans.

      People need to face the facts record labels are as relevent in the digital age as say manufacturers of long bows, chain maille armour and broadswords.

      The people I'm referring to are of course the folks working at the record label. In this age of oursourceing, downsizing and cost cutting there is no room left for record labels that suck up 90% of the cash from music sales and then complain that they don't get enough.

      • Re:The artists make very little money from music s (Score:5, Informative)

        by EspressoMachine ( 815675 ) on Wednesday March 09, 2005 @12:37PM (#11890375)

        They get like maybe 1$ per cd.

        If only that were true. Artists generally make $.05-$.12 a CD. If you want more info about the industry and contracts, etc., I highly recommend This Business of Music [amazon.com]. It's chock full of interesting details like formulas used to determine artist royalties. For instance, did you know the labels still take money for R&D costs on the "new technology" of the Compact Disc? Or that many still take out $$ to cover "breakage", which is a hold over from distribution of albums on vinyl?

        Oy.

    • Re:No matter what free will always win... (Score:5, Insightful)

      by mikeplokta ( 223052 ) on Wednesday March 09, 2005 @12:30PM (#11890242)
      No, free won't always win. Convenience will always win, and free is part of convenient. But I would rather (for example) pay US$1 to download an episode of a TV show instead of messing around with BitTorrent, as long as they genuinely make it more convenient -- which means a big fat pipe and a choice of unDRMed video formats.

      The big mistake that the music industry is making, and the TV and movie industries are stumbling into, is to make their products less convenient on other grounds as well as more expensive -- region codes, release windows, DRM, etc. Once something is released to the public, it needs to be released to the public -- TV shows and movies need to be available for download on the day that they're first shown.

  • Yes (Score:5, Funny)

    by XMyth ( 266414 ) on Wednesday March 09, 2005 @11:40AM (#11889512) Homepage
    Yes, I would pay 5 cents a song and I currently do thanks to some kind Russians. =)

    • Re:Yes (Score:3, Funny)

      by ArsonSmith ( 13997 )
      hmm, must resist urge....songs buy you for 5 cen....ahhhhhhhhhh

    • Apple's Strategy (Score:3, Interesting)

      by hugesmile ( 587771 )
      If someone at Apple actually believes that the 5-cent model will work, then Apple should go buy a few RIAA companies [riaa.com] and give it a try.

      If it works, then they could probably corner the music market. If not, well then it'd only be the death of a few RIAA members - no big loss...

  • Way too optimistic article... (Score:2, Insightful)

    by Anonymous Coward
    Apple might be listening, but I bet you that the RIAA is not.

  • Death of the CD (Score:5, Interesting)

    by bje2 ( 533276 ) * on Wednesday March 09, 2005 @11:42AM (#11889531)
    Yet, Pearlman went further. He said that since this plan puts the onus on a massive Internet presence to distribute all the music in the world, why not have such computer companies as Apple and such major Internet companies as Yahoo simply buy up the world's four major record labels? Pearlman was careful to add, though, that he doesn't see his plan killing off demand for CDs.
    while the plan may be good, i have to disagree with the last part...this would (in my opinion) surely kill off the demand for CDs...right now, iTunes isn't killing the demand, becuase it's roughly equivalent to download 15 songs for $0.99 per song, or pay $15 for the CD...however, if i could download 15 songs for only $0.75, so why should i ever buy a CD again?
    • 1)People like to buy things.
      2) It's easier to rip from a CD
      3) A lot of people find creating a CD to be listened on a standered CD player intemidating.
      4) Artwork (In theory. I have yet to see a cd with good artwork)

      these answers are a generality. Certianly YOU may never buy one again, but a lot of people would. Also, thye would become cheaper.

    • Re:Death of the CD (Score:5, Informative)

      by R.Caley ( 126968 ) on Wednesday March 09, 2005 @12:09PM (#11889918)
      If i could download 15 songs for only $0.75, so why should i ever buy a CD again?

      Depends on who `i' is. For variosu people there are:

      • Downloads, as easily available to the bod in the street now, sound crap, so if you will ever listen to music on something other than a crappy little MP3 player you will have to buy it again.
      • Downloads are ephemeral, so you have to burn CDs and life is too short to do grunt work.
      • Downloads don't come with artwork, lyrics, credits etc. unless you go download them and print them and life is too short to do grunt work.
      • Downloads are harder to buy than picking up a CD at the supermarket, and life is too short to do online grunt work.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Wednesday March 09, 2005 @11:42AM (#11889532)
    Comment removed based on user account deletion

  • You can forget the "stealing tax" (Score:5, Insightful)

    by bigtallmofo ( 695287 ) on Wednesday March 09, 2005 @11:42AM (#11889538)
    In addition, a 1 per cent sales tax would be placed on Internet services and new computers -- two industries that many argue have profited enormously from rampant file-sharing, but haven't had to compensate artists.

    This is the same scheme that we have today on blank CDs and the like and it is total BS to apply it to computers. I have no idea why anyone outside the entertainment business thinks that it's OK to put a music-stealing tax on every computer, or DRM on every computer when not every computer is even considered for such use. What about the company that buys 10,000 computers per year and because some 12 year old is "stealing" music they have to pay an additional tax and further have to have their computers crippled with DRM?

    • I'd be okay with such a tax if they'd decriminalize the sharing. Which they won't - they just want the free money.

    • Exactly. The question is not "would you pay 5 cents for a song?", but "would you shell out money even if you never buy music just so that other people can buy music cheauper?"

      According to his argument that it's OK because the industry has benefited, there should also be a tax to subsidize porn site subscriptions, any other subscription-based content, the movie and tv industry, and even sites that currently run annoying ads to pay the bills.

      What's so special about the music industry?

  • Commodites (Score:4, Insightful)

    by BWJones ( 18351 ) * on Wednesday March 09, 2005 @11:42AM (#11889540) Homepage Journal
    Apple should simply be charging 5 cents instead of 99 cents a song, he said.

    The issue is not what Apple is charging, but what the record companies are charging Apple. As I understand it, Apple Computer Inc. is making essentially nothing on the sale of each song, but rather are using song sales to drive sales of iPod and thus Macintosh computers and Apple software. I am sure that Apple would be more than happy to participate in a 5 cents/song pricing scheme, but it is the record industry that is going to be the hard ones to convince. I do not understand how the recording industry can say it would destroy record companies' incentive to invest in new acts when the potential for much greater revenues can be had with increased volume and lower prices. What they are missing is that new music is what is going to be transiently valuable, but that pre-existing libraries of music are a commodity and should economically be treated as such according to all economic theories I am aware of. This means low prices and high volume.

  • In addition, a 1 per cent sales tax would be placed on Internet services and new computers -- two industries that many argue have profited enormously from rampant file-sharing, but haven't had to compensate artists.

    Ahem.
  • For that much, I'd want a song and dance.

  • Dear Slashdot: More Apple Stories Please (Score:2, Funny)

    by Anonymous Coward
    Slashdot simply isn't posting enough about Apple. I demand more Apple-related stories!!!
  • Why pay 5 cents if you can pay 0 cents? Here in Canada, it's pretty much understood that music downloaders won't be prosecuted. Besides, if this ever were to happen and the music industry decided 5 cents wasn't enough, they'd have a tough time raising the price now that the bar would be so low.

    Here's a thought: how about artists GIVE their music away for free and make money doing concert tours? Oh wait...that's the way it works right now.
  • Would You Pay 5 Cents For a Song?

    Of Course [allofmp3.com].

  • No, no and no! (Score:5, Insightful)

    by Sebby ( 238625 ) on Wednesday March 09, 2005 @11:43AM (#11889559)
    I stopped reading when I got to this sentence: "In addition, a 1 per cent sales tax would be placed on Internet services and new computers"

    No, no and fucking no! I refuse to finance any industry which I don't have anything to do with.

    When I buy computers for my business, I don't buy them for anything music-related, so I see NO reason to pay a tax, or levy or whatever the fuck they want to call it to support any music-related thing.

    I'm tired of corporations and government thinking society exists for the sole purpose of ensure their profit.



    • Re:No, no and no! (Score:5, Interesting)

      by pg110404 ( 836120 ) on Wednesday March 09, 2005 @01:06PM (#11890825)
      Canada just recinded a 3 or 4 year old blank cd media tax.

      Up here, lobbyists pressured the gov't to tax blank CD media which would then be handed over to the music industry. Their reason: people will steal music no matter what, so let's just obfuscate the the music industry's perceived profits by making people pay for it one way or another.

      A few years back ontario deregulated the hydro and within the first year, some people were paying 50 cents per kilowatthour (average is about 6 cents) and their hydro bills were astronomical at the peak of the summer. Later, the ontario gov't put a cap of 4.7 cents but the balance was paid for by our taxes. It was a kick in the balls and a pat on the head move and is not going to be the last.

      Whatever happened to the days where companies stood or fell on their own terms, and not propped up by the handouts of some third party such as the gov't?

      As a democracy, I say we all rise up and quell any further stupid shit that spews forth from our parliament/congress/whatever. I say we bring back the gillotine.

  • Oh, right! (Score:3, Interesting)

    by greg_barton ( 5551 ) * <greg_barton@yahooAUDEN.com minus poet> on Wednesday March 09, 2005 @11:43AM (#11889562) Homepage Journal
    From the article:

    Richard Pfohl, general council for the Canadian Recording Industry Association, refuted Pearlman on numerous points at the conference forum, arguing that the plan would violate every international intellectual property law that Canada has signed in the last 100 years. It would also obliterate musicians' choices on how their music could be sold by conscripting them into a 5-cents-a-song system.

    Oh, right! Like they have a "choice" now with the labels? Have you seen the frikkin' contracts you've got to sign to get on with a major label? You sell your arm, leg, and any potential children's arms and legs. Give me a break!
  • Just in case you didn't know what the music industry was all about, read this (context is not really important to get the idea:

    Another record-industry type, casually speaking to Pearlman [progenitor of this idea] after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?

    Yes, guys and gals, it's money.

    Money, money, money, money.

  • I stopped at this sentence: (Score:3, Insightful)

    by Shamashmuddamiq ( 588220 ) on Wednesday March 09, 2005 @11:44AM (#11889570)
    "In addition, a 1 per cent sales tax would be placed on Internet services and new computers -- two industries that many argue have profited enormously from rampant file-sharing..."

    No thanks.

  • yes!

    hell i'd even pay 10.
  • I had an opportunity to pay a nickel for a song once. This homeless guy was selling them. "Hey buddy, wanna hear an original song, I swear to God it's original. Spare change please?"

    Give him a nickel and he started singing. It wasn't very good.
  • So, am I the only person left in the world paying over a dollar per song by, you know, actually buying CDs?

  • Depends on the song, of course (Score:4, Funny)

    by m50d ( 797211 ) on Wednesday March 09, 2005 @11:44AM (#11889583) Homepage Journal
    I used to buy a very few CDs and download most. With the rise of iTMS I buy more. At £.05 (dollar prices are almost always translated directly to pounds for things like music, grr) I'd probably buy most of my songs. But not all. Some just aren't worth that much. I don't think they're ever going to eliminate "piracy" completely, except by cutting prices to zero.
  • I'll listen to 1 whole Brittany Spears song for 5 cents. I'll drive around the block with my windows down playing one of Brittany's songs for 5 dollars.

    Any takers?

  • Laffer Curve of file sharing. (Score:5, Insightful)

    by Vengie ( 533896 ) on Wednesday March 09, 2005 @11:45AM (#11889594)
    Basically, he's saying that "If you sell x songs at 99 cents a song" and that "If you drop the price to 5 cents, you will sell more than 20x songs" -- he claims the growth could be "exponential."

    To a certain extent, he's somewhat right. It would substantially lower the bar and you'd have far more impulse buys (and drunk song-buying binges wouldn't hurt as much. Fear the drunken one-click shopping spree!)

    However, I am not such a big fan of his idea of taxing PCs. However, the last line of the article is THE MOST INFORMATIVE OF ALL:
    Then again, another record-industry type, casually speaking to Pearlman after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?


    These guys don't even get *OLD ESTABLISHED CONCEPTS* let alone "new fangled concepts." Pearlman's response is that if you double the price, you cut the sales by more than half, so you actually DECREASE your revenue.

    They just don't get it. [I'm not saying Pearlman is necessarily right with the .05$ price point, but the "industry type" missed the entire point of the talk!]
  • From the article ...

    Then again, another record-industry type, casually speaking to Pearlman after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?

    You wonder why we have so many problems with the RIAA and friends?

  • if the recording industry is agin' it... (Score:5, Interesting)

    by yagu ( 721525 ) <<moc.liamg> <ta> <ugayay>> on Wednesday March 09, 2005 @11:45AM (#11889606) Journal

    When first reading the article, my instinct was to not go along with the notion charging for downloaded music, even only $.05 a song. Especially with DRM, etc., always on the sideline poised to come in and wrap you around the axle anytime to you try to play the song (in the proper spirit of fair use)... (I'm STILL upset about one of my recent CD's purchased not playing on my car CD player.... took it in, they would only exchange it... and, sure enough, the exchanged CD failed to play in exactly the same places in exactly the same way... had to demo this to the store personnel before they would agree to a refund.)

    But, maybe they have something there... certainly when: "..., The recording industry is against Pearlman's plan. ..., ", I've got to think it may be something that could work.

  • Sure, lower prices would create vastly more legal sales, and far fewer 'illegal' downloads. And quite possibly more profit.

    The part of this idea that I have a hard time with is "In addition, a 1 per cent sales tax would be placed on Internet services and new computers".
    Is there a tax on TV's that goes back to the networks/TV industry? How about stereo equipment?
    How about if I don't use this particular PC for music? Does that tax apply? What about a PC I built from parts?

  • Clearly doesn't understand IT costs (Score:4, Insightful)

    by BlakeCaldwell ( 459842 ) * on Wednesday March 09, 2005 @11:46AM (#11889612) Journal
    Mr. Pearlman seems to understand economics pretty well, but not IT. Here's the breakdown of an ITunes purchase of $0.99:

    Label(s): $0.55
    Apple: $0.34
    Artist(s): $0.10

    Now, let's chop that down to $0.05 instead of $0.99. Let's break it down this way:

    Label: $0.03
    Apple: $0.02
    Artist: $0.1

    So, when a customer goes to ITunes, they'll surf through several (large)-database-driven webpages to find the songs they want. They'll make a purchase against their already-paid-for credit through ITunes (of probably $10 increments), then download the 5MB song.

    So, Apple now has to run power-hungry servers with a large staff of IT guys making sure they're patched and running correctly. They gotta hit customers' credit cards and give probably 5-10% back to the credit card company.

    All of this... for $0.02 per song?!?

    His model makes sense, but maybe for $0.25 per song... there's no chance Apple would make money by giving up that much bandwidth.

    just my $0.02.

    • Re:Clearly doesn't understand IT costs (Score:5, Funny)

      by shark72 ( 702619 ) on Wednesday March 09, 2005 @12:02PM (#11889817)

      "So, Apple now has to run power-hungry servers with a large staff of IT guys making sure they're patched and running correctly."

      I think the general consensus here is "artists and record companies should stop being so greedy." In the spirit of this goal to drive music to $0.05, perhaps IT guys should stop being greedy as well, and just work for the pure joy of providing music, rather than for a salary.

      Yes, I know, IT guys have to pay rent or mortgage and support families. Yet artists and employees of record companies do, too. If they can suck it up in the new Slashdot world music order, so can IT professionals.

  • my $.05 (Score:3, Interesting)

    by to_kallon ( 778547 ) on Wednesday March 09, 2005 @11:46AM (#11889614)
    The recording industry is against Pearlman's plan.
    hrmmm....what a shock! the music industry not willing to adopt change?? surely not!
    seriously, this sounds like a decent proposal, although i highly doubt it will make a significant change (free is less than $.05), but let's face it, will probably never happen. apple can listen all they want, and that's great, but the recording industry will never go along with it. the best idea i found in that article is "why not have such computer companies as Apple and such major Internet companies as Yahoo simply buy up the world's four major record labels?" now *there's* the kind of change that needs to take place.

  • End file swapping? (Score:2, Insightful)

    by Exitar ( 809068 )
    McGill academic has a plan to end file swapping and save the music industry

    File swapping isn't just music.
    it's movies, TV series, software and ebooks too...

  • Record companies never, ever get it (Score:3, Interesting)

    by FunWithHeadlines ( 644929 ) on Wednesday March 09, 2005 @11:47AM (#11889630) Homepage
    OK, so his proposal is to drop the price of a song online from .99 to .05, and then supplement it with a 1% tax on ISP charges and computer purchases on the assumption that users of those service and equipment are the ones doing all the music downloading. I don't think the 1% tax will go down too well, although in Canada they already have such a tax on CDs and tapes. So I suppose people could adjust to the idea of paying $30.30 a month for an ISP instead of $30.

    But the quotes at the end are hilarious!

    "The recording industry is against Pearlman's plan. Richard Pfohl, general council for the Canadian Recording Industry Association, refuted Pearlman on numerous points at the conference forum, arguing that the plan would violate every international intellectual property law that Canada has signed in the last 100 years. [SO CHANGE THE LAWS!] It would also obliterate musicians' choices on how their music could be sold by conscripting them into a 5-cents-a-song system. [OR THEY COULD JUST OPT OUT AND DO THEIR OWN DISTRIBUTION AND CHARGE WHAT THEY WANT] And it would destroy record companies' incentive to invest in new acts, Pfohl said. [WHY, BECAUSE IT WOULD BRING IN HUNDREDS OF MILLIONS OF DOLLARS IN REVENUE?]

    Pearlman said that Pfohl misunderstood the idea. [DUH!] Then again, another record-industry type, casually speaking to Pearlman after the talk, had perhaps the most succinct counter suggestion. Why not charge 10 cents, instead of 5, and double the revenue?"

    ROFL! Don't you just know that will be the endless series of suggestions they will make. "Hey, look at how much money is coming in! Let's double again to 20 cents and get lots more moola!"

  • base the price on recent popularity of the download

    then i can get an album by paying for the good songs and the crummy ones come along for free

    and artists can make bank on hits while getting real in-the-wallet feedback on crap

    supply and demand. it's not just a good idea, it's the law.

  • You guys are retarded (Score:2, Insightful)

    by Hhhhh ( 864263 )
    PLEASE. While I agree that several patents are whacko and I am a big advocate of Open Source, music and movie copyrights MAKE sense. After all, people actually work making the movies (it looks like many Slasdotters don't) and they need to sustain themselves. I wouldn't waste my time watching "free as in freedom" movies

  • 5 cents? (Score:3, Funny)

    by northcat ( 827059 ) on Wednesday March 09, 2005 @11:48AM (#11889641) Journal
    5 cents? Is that a new rapper? 50 cent's midget brother?

  • really now? (Score:4, Insightful)

    by LiquidMind ( 150126 ) on Wednesday March 09, 2005 @11:58AM (#11889770)
    "...Pearlman was careful to add, though, that he doesn't see his plan killing off demand for CDs."

    *BLANK* CDs maybe.

    i mean $.05 x 13 songs = $.65
    factor in $.25 for a blank CD and voila, that's still under a dollar. Unless they plan on *severely* reducing the price of retail CDs, I don't quite see that working out.

  • Canada's Laws favorable... (Score:4, Insightful)

    by Fox_1 ( 128616 ) on Wednesday March 09, 2005 @12:03PM (#11889833)
    This is kinda of a neat statement without a lot of explanation behind it. We do have entities in place which collect revenue on behalf of the artists from different industries that benifit from the artist work. The big example is the tax on blank cd's. It sucks that I pay extra for a cd that may hold pictures instead of songs, but I'm also not blind, 1/2 of my fiances music cd collection is burned cd's. I'm also paying a fee so a DJ can play music at the wedding to some organization that gives money back to the artists. There are other little quirks and decisions made by the gov't here and courts. In December 2003, the Canadian Copyright Board stated that downloading music was legal. They also went on to say that sharing would still be considered illegal.


    Here is a site that tries to give more information on our favorable laws
    The Canadian Internet Policy and Public Interest Clinic [cippic.ca]

  • The curious searchers' pricing model (Score:5, Interesting)

    by buckhead_buddy ( 186384 ) on Wednesday March 09, 2005 @12:04PM (#11889865)
    Personally, I use the iTunes store to listen to those thirty second previews of songs far more than I download music. I have a quirky set of tastes where I'll often want to find just the right version of a song. For example, after seeing the end of the Dead Like Me pilot and wanting to find that version of Que Sera, Sera that was played in a minor key toward the end, I found the iTunes music store's preview function invaluable.

    I heard many, many different variations. And most of them were sung in the style of Doris Day's version (giddy and happy and making me want to slap the singer). There were some versions that came close, but I couldn't decide whether that was what I wanted or not. Ultimately at the $1 price per song I didn't download any of my "candidates" since I didn't hear enough to convince me before the sale that that was the type I was looking for. Had the price been $0.05 per song I probably would have downloaded most of the candidates and not given the price much thought.

    While this wouldn't help sell the big name artists at all, it would get the casual music listener like me. Whether there are enough of my type around is a completely different question and one that I can't begin to answer.

    (As an aside, I never found the right version of Que Sera, Sera and in general that isn't the type of music I listen to. Just something that struck a nerve at that particular moment.)

  • I tried, I really tried (Score:5, Funny)

    by Leo McGarry ( 843676 ) on Wednesday March 09, 2005 @12:05PM (#11889873)
    I tried to read the article. I really did. But when I got to the end of the second paragraph, my natural aversion to incredibly bad writing kicked in and my mouse-hand clicked the window's close box without my conscious intent.

    Peering out from under his de rigueur cap, music-industry veteran Sandy Pearlman, a former producer of the Clash and now a visiting scholar at McGill, spoke with a kind of nervous glee while describing his idea at the Canadian Music Week conference in Toronto last week.

    Awful, vapid writing? You're soaking in it.

  • Of course (Score:3, Interesting)

    by zpok ( 604055 ) on Wednesday March 09, 2005 @01:19PM (#11891014) Homepage
    Of course I would pay 5 c for a song. For that price you can't even buy a whistle. A guitar costs fortunes, and anyway, my voice sucks big time.

    It's an interesting idea, maybe even applicable to other areas as well.

    I know I'm going to get a lot of "hippie commie shitheat" comments, but it would be a wonderful thing if we could get this money thing behind us. It's a great way to barter, it's so universal one could almost believe it's pre-wired like language, it beats having to kick your neighbour out of the tree to keep your bananas (like our close cousins do...) but after so many thousands of years of social and technical evolution it would be great to find a meaningful way to feed the tribe without all this money and poverty stuff.

  • Here's your 1 percent... right here... (Score:3, Insightful)

    by hoggoth ( 414195 ) on Wednesday March 09, 2005 @02:35PM (#11892015) Journal
    From TFA: "In addition, a 1 per cent sales tax would be placed on Internet services and new computers"

    I don't care about downloaded music. I don't bother with it. I shouldn't have to pay a sales tax to the RIAA for product I am not using. My company has hundreds of computers and CERTAINLY shouldn't have to pay the F*ing music industry for their workstations!

    Can you imagine telling Citibank, Exxon, Chase, IBM, etc. they have to pay the RIAA a tax for every desk?!

    This is the stupidest idea since... well since paying a tax on every blank CD sold.

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