Music Labels See Slower iTunes Sales Growth in Wake of Price Increases

[RMo]

Surprise, surprise. Like others have said, I've noticed that prices are usually lower on Amazon MP3. I always compare and buy at the cheaper store. If the prices aren't the same, Amazon almost always wins.

Also, remember how songs were supposed to be variably priced in iTunes? 69¢, 99¢, and $1.29? All I've seen are former 99¢ prices skyrocket to $1.29 while some stayed the same. I have very rarely encountered a 69¢ song.

 

[kalafalas]

I generally don't buy from iTunes anymore. Amazon is usually cheaper -- .89 or .99 cents. That's where my business went.

I would buy at amazon too, but I find that the quality bump from the AAC encoding used in the iTunes store, and the ease of the store being built into the program I use, and my phone, is worth the extra couple cents. If amazon swicthed to lossless, I would buy from them in a second, and if they swicthed to AAC over outdated-MP3, I would have to decide over the convience.

 

[TheIguana]

I have not and will not purchase songs that are priced at $1.29.

 

[ghostface147]

I'd like to hear some ideas from this community on how they would fix this industry to bring profits to everyone while decreasing prices for the end user and eliminate piracy 100%.

 

[roebeet]

I would buy at amazon too, but I find that the quality bump from the AAC encoding used in the iTunes store, and the ease of the store being built into the program I use, and my phone, is worth the extra couple cents. If amazon swicthed to lossless, I would buy from them in a second, and if they swicthed to AAC over outdated-MP3, I would have to decide over the convience.

I don't see a real audible difference between AAC 256kps and LAME V0. If you are buying a lossy digital file, they are pretty comparable imo (other than perhaps the file size). And, arguably, LAME V0 is also more compatible once you leave Apple's ecosystem. AAC is superior but, at V0, it's very hard to tell unless you have good ears and good headphones.

I'd like to hear some ideas from this community on how they would fix this industry to bring profits to everyone while decreasing prices for the end user and eliminate piracy 100%.

Piracy will always exist - the best that the industry can do is make consumers purchases appealing enough to reduce piracy. My personal suggestions are many:

- Reduce prices. I think that's obvious.
- Offer alternative music formats, especially lossless. Also work with the hardware vendors to support a common lossless format.
- Offer extras with your digital purchase, like liner notes.
- (For movies / TV shows). Work with the hardware vendors to agree on a common format and get rid of DRM.

 

[Prof.]

This is why I now purchase my music from lala.com for $0.89 as supposed to paying $1.29 on iTunes.

 

[theshirko]

when the songs were .99 i did buy the songs that i really love without even looking at piratebay and others..with some times occasional pirate bay business if i wanted a full album to just see what is it about since i know that i would rarely listen to a full album
now i stopped even looking at itune at all , i use as my music manager that it it,
if they make all songs at .69 i would never ever look at pirate bay...promise
i hope CEO MOFOS are reading this...

what would be really cool if they come up with a system where you only pay based on how many times you listen lol , like royalty , something like 1 cent per play , since most music is not worth more that 5 plays lol

 

[joel6653]

Whatever happened to three-tiered pricing?

When Apple introduced $1.29, they also introduced $0.69, and I recall someone saying they expected more music at the lower end than at the higher. I have not since seen a single song priced at $0.69. Has anyone else? Did the lower price get quietly dropped?

 

[ARF900]

I just refuse to buy Warner Music anymore because of the freakin youtube thing. The price increase on itunes doesnt bother me.

 

[jliverse]

Yup. Some people fell asleep in economics 101.

Amen. If a grocery store sold two identical cartons of milk but charged sixty cents more for one of them, it doesn't take the corpse of Adam Smith to figure out which one people will buy more of. Further, you'd expect that there would be a spike in puchases of older content as people buy albums they only had on cassette and vinyl or whatever. When DVDs first came out, there were a lot of Pippi Longstocking movies sold (replacing VHS copies) but only sales of The Matrix meant anything for the platform. I wish these numbers would always be broken down by release year...

 

[MorphingDragon]

Major record labels are stupid by design. Sony and its subsidiaries are the only recognizable ones left IMO.

I wish midnight youth went with Sub-Pop.

 

[AppleMactablet]

I get my songs for FREE-

Wait for it...Wait for it......Legally

-HOW?
My Coke Rewards-I can get 1.29 Napster songs for Free-I just grab the caps, before I recycle-11 Caps=1 free song

 

[theNEOone]

I'd like to hear some ideas from this community on how they would fix this industry to bring profits to everyone while decreasing prices for the end user and eliminate piracy 100%.

CUT OUT THE MIDDLE MAN.

I.E.:

NO MORE APPLE/ITUNES STORE
NO MORE AMAZON
NO MORE RECORD INDUSTRIES

Here's how I want my music

Artist/Band --> Me

Here's the model:
Possible Model #1
Pandora streams music all day, every day for free. They receive their revenue from selling ads (rather than by linking to online stores, which gives them a cut of sales and in turn increases prices). If I hear a song I like, Pandora links me to the band's webpage (no Amazon, iTunes, blah blah) where I can purchase their music. No premium is paid to pandora on a per-song basis. The idea is to create a model that's sustained by 3rd party ads - not song sales.

Possible Model #2
The benefit or retail stores (Walmart, BestBuy, etc.) is that they can provide a single place for me to shop for all of my hard goods. This is necessary. You know what my retail store should be for digital content?? GOOGLE. Google search for song/artist I like --> link to purchase direct from the source. End of story.

Of course you can combine elements of #1 & #2.

They're trying to create this distribution model for digital content that contains elements of a legacy retail paradigm. Cut the cord already. I don't need Amazon. I don't need iTunes. There is no value there for me, at least not one in which the prices of my goods are 300%+ more.

I forgot where I read this, but some time ago I saw a paper claiming that artists could charge ~$3 an album (if they were on their own) and still make more money than they do under a record label's contract. Hmmm $3 vs $10??? No brainer.

I know what the naysayers are thinking: The major roadblock here is obviously the record labels that scout talent and give artists exposure that they otherwise wouldn't be able to achieve on their own. To them I say: look at the quality (or lack thereof) being dumped on us by record labels. If that's what you call talent, then you can also call me Mozart.


=|

 

[MorphingDragon]

CUT OUT THE MIDDLE MAN.

I.E.:

NO MORE APPLE/ITUNES STORE
NO MORE AMAZON
NO MORE RECORD INDUSTRIES

Here's how I want my music

Artist/Band --> Me

Here's the model:
Possible Model #1
Pandora streams music all day, every day for free. They receive their revenue from selling ads (rather than by linking to online stores, which gives them a cut of sales and in turn increases prices). If I hear a song I like, Pandora links me to the band's webpage (no Amazon, iTunes, blah blah) where I can purchase their music. No premium is paid to pandora on a per-song basis. The idea is to create a model that's sustained by 3rd party ads - not song sales.

Possible Model #2
The benefit or retail stores (Walmart, BestBuy, etc.) is that they can provide a single place for me to shop for all of my hard goods. This is necessary. You know what my retail store should be for digital content?? GOOGLE. Google search for song/artist I like --> link to purchase direct from the source. End of story.

Of course you can combine elements of #1 & #2.

They're trying to create this distribution model for digital content that contains elements of a legacy retail paradigm. Cut the cord already. I don't need Amazon. I don't need iTunes. There is no value there for me, at least not one in which the prices of my goods are 300%+ more.

I forgot where I read this, but some time ago I saw a paper claiming that artists could charge ~$3 an album (if they were on their own) and still make more money than they do under a record label's contract. Hmmm $3 vs $10??? No brainer.

I know what the naysayers are thinking: The major roadblock here is obviously the record labels that scout talent and give artists exposure that they otherwise wouldn't be able to achieve on their own. To them I say: look at the quality (or lack thereof) being dumped on us by record labels. If that's what you call talent, then you can also call me Mozart.


=|

Or you take a NIN approach and make your own record label.

 

[Prof.]

Or you take a NIN approach and make your own record label.

Or the MODLIFE way.

 

[theNEOone]

Or you take a NIN approach and make your own record label.

At it's core, the NIN approach is exactly the model I'm suggesting:

Artist/band --> Consumer

Nothing in between.

How you get there isn't really the issue. What matters is the result.


=|

 

[paul4339]

Surprise, surprise. Like others have said, I've noticed that prices are usually lower on Amazon MP3. I always compare and buy at the cheaper store. If the prices aren't the same, Amazon almost always wins.

Also, remember how songs were supposed to be variably priced in iTunes? 69¢, 99¢, and $1.29? All I've seen are former 99¢ prices skyrocket to $1.29 while some stayed the same. I have very rarely encountered a 69¢ song.

I totally agree. When prices went up to $1.29, I seem to recall that the premium price was suppose to be for 'new' songs. $0.99 for older tunes; $0.69 for all the rest. (sorta like how it's like when you rent from blockbuster).
When it go to iTunes it's seems like most things are $1.29 and some at $0.99. Very few songs are $0.69.

Whether it was a recession or not, I don't think raising prices like that was a good idea. It's always better to _add value_ in some way... that is find a good excuse to raise prices, like adding interactive LP/booklet. Then you at least they can have a good reason to increase prices. Just raising prices to add to the bottom-line without adding some kind of value seems kinda lazy and non-creative to me.

 

[bamerican]

How about, instead of the greed of increasing prices, try dropping music prices to $.69 or $.79 per song? Maybe, just maybe they'd see such an uptick in the number of downloads that they would even make more on music?

I know... how dare I think rationally...

 

[kiljoy616]

Breaking news! Sales decrease if prices increase! What will they realize next?

That they all failed their Macro Economics class!

Dam how do these people get to their position, I am sure it was not by having some common sense.

 

[nik.cooper]

Basic Economics!

In other news...gravity keeps us from floating away!

*Slaps forehead* So THAT'S what does it...

Hahahaha

 

[GooMan]

I generally don't buy from iTunes anymore. Amazon is usually cheaper -- .89 or .99 cents. That's where my business went.

+1

I highly doubt that there are many people out there who were readily buying songs on iTunes for $0.99 and now scoff at the idea with prices of $1.29. It is still a throw away amount.

I "scoff at the idea" just out of spite. I have NEVER bought a MP3 at the $1.29 price and I don't ever plan to.

 

[Michael CM1]

Did this study take into account the economy doing a swan dive off a proverbial cliff?

This price hike hasn't changed my habits one bit. I buy albums most of the time, and those vary a lot. I do buy a lot of my albums at Amazon when it runs a daily $2.99 album that's normally $9.99. All things equal, I'll buy from iTunes because it uses a better codec and I don't have to delete the [explicit] tags from the song names.

iTunes and Amazon are doing a good job at competing with each other. I just wish they would team up on e-books instead of adding more incompatible books. I banked on Amazon's format winning out, believing Apple would make devices and let others sell books. Luckily, I only have about 10 Amazon e-books. I think I'm going to have to let all of this play out a bit.

 

[pondie84]

This doesn't surprise me at all. As soon as I see a song is at the higher price I don't bother downloading it from iTunes. I have no qualms at all buying a song at the lower price.

It also doesn't make sense to me why you'd price 'popular' songs higher. Wouldn't it be easier to download these songs for free from elsewhere? Shouldn't 'rarer' tracks be priced more as it's harder for people to download them for free elsewhere?

 

[bobertoq]

Absolutely shocking, isn't it! People are less likely to pay 33% more for a product!

 

[bludodge]

It's not because of the tiered pricing, look around, it is because of the economy, and consumers on a whole paying more attention to where their money is going (which is a good thing). How can anyone prove it is because of Apple's tiered pricing? Why is this even news?