Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Let's just assume that the players get the same cut regardless of how it is sold.

What's better?
  • 40 individual tracks at $0.25
  • 10 individual tracks at $0.99
  • 1 album at $9.99

In each case the revenue is ~$10 so each player would get the same share.

If the volume goes up >4X at a price point of $0.25 (because you are now bringing in new business that would not buy at a higher price) all the players make a better living.

Now it's not clear that volume would or could go up that much, but it certainly is possible.

B
Silly argument because you are assuming more people will buy just because it's cheaper, but it's hard enough to get people to buy as it is (even though the prices ARE already lower than CDs) because so many people these days think they are entitled to everything for free (at least on this forum it seems) and when the songs/ albums are already set at a fair price and people STILL complain, imagine if it's lowered to a quarter a song? Then some of you would be saying "Well it's already a quarter a song, that's practically free so you might as well just give it to us for free!" I've already seen this kind of [il]logic happen in the software industry. It's the same for all the iPhone whiners that are constantly complaining about every little thing even though Apple provided a fairly good phone with some cool features... but no, not good enough for the almighty forum elite you think they rule the world and demand that everything be their way!
 
Let's just assume that the players get the same cut regardless of how it is sold.

What's better?
  • 40 individual tracks at $0.25
  • 10 individual tracks at $0.99
  • 1 album at $9.99

In each case the revenue is ~$10 so each player would get the same share.

If the volume goes up >4X at a price point of $0.25 (because you are now bringing in new business that would not buy at a higher price) all the players make a better living.

Now it's not clear that volume would or could go up that much, but it certainly is possible.

B

Unfortunately it doesn't work that way. Especially for independent artists. Just because the price is lower doesn't mean that the volume is going to go up. Also, all the "players" involved do not get the same cut. Believe me, I've been in the music industry for a LONG time and my dad was in the music industry (on the broadcasting and concert promotions side) and the mentality with this new generation is, unfortunately, very different than previous generations because there is such an almost unfair sense of entitlement that people have. People would rather sue because a product they bought 2 months ago dropped in price by a couple of hundred dollars than be happy with what they have. Very disconcerting...
 
competition is ALWAYS good for the market, though I hope apple continues to have a >50% marketshare to be able to keep all the labels on board. I love ITMS but if labels/networks etc. start dropping support so too will my usage drop off. For many people (not necessarily myself) this sort of dropping (NBC) has led to a return to p2p sources. I don't like this sideaffect, and hope to see it stopped. Other than that, way to go on price drops apple, always a welcome occurance.
 
Unfortunately it doesn't work that way. Especially for independent artists. Just because the price is lower doesn't mean that the volume is going to go up. Also, all the "players" involved do not get the same cut. Believe me, I've been in the music industry for a LONG time and my dad was in the music industry (on the broadcasting and concert promotions side) and the mentality with this new generation is, unfortunately, very different than previous generations because there is such an almost unfair sense of entitlement that people have. People would rather sue because a product they bought 2 months ago dropped in price by a couple of hundred dollars than be happy with what they have. Very disconcerting...
I think you're reading a different tone into my comments than I'm putting into them. I'm only speaking for myself here, and I won't claim to know the economics of independent music. I, like most, have finite resources so I'm forced to make decisions about where to focus them. If Apple decided to drop their Plus prices it is probably because they believe lower prices will bring higher volume. That might be true, but for me it hasn't crossed the threshold yet where my buying habits will change. For most of the music I buy now, I know I want it and I tend to buy it as albums-- so my demand is rather inelastic and the price hasn't really changed for me in any event.

If the price came down further, I'd explore more, and buy more music that I don't find as necessary. I don't know that I'm typical, but in my case that would tend to benefit new and independent artists, and artists in genres I'm less devoted to. Whether the added revenue from people like me would offset the loss in revenue from diehard fans is a decision someone else needs to make.

What I'm expressing isn't about entitlement. I don't think I deserve special privilege here. This is about value. What this music is worth to me. This is a market where buyer and seller need to decide on a price. If the price is higher than the value I place on the item, I have no music and the seller has less revenue.

Thanks for the link BTW.
 
....
If the volume goes up >4X at a price point of $0.25 (because you are now bringing in new business that would not buy at a higher price) all the players make a better living.

Now it's not clear that volume would or could go up that much, but it certainly is possible.

B

This is a classic business school problem. The way you solve this is to first figure out what the slope of the curve is. How much more do you sell if the price is less? You have to figure this out by collecting data. Then the classic solution is the use a bit of Calculus, take the derivative and solve it for zero to find a maxima.

The problem is that I'm sure Apple's goal is NOT to maximize profits in iTunes but to maximize overall corporate wide profits. I think they run iTunes at a break even point because having iTunes causes people to buy ipods. They may choose to charge more then they need to so that they can put the money into making iTunes a more atractive site so they will sell more iPods

Amazon is the same. I'm sure the goal is not to make money but drive traffic to Amazon where they cann sell other things. Notice how the Anazon MP3 store links to the physical CD.

I think Wallmart does the same thing with CDs. Sell them cheap just to get you to come into the store and buy some other stuff that has a much higher margin.
 
I think you're reading a different tone into my comments than I'm putting into them. I'm only speaking for myself here, and I won't claim to know the economics of independent music. I, like most, have finite resources so I'm forced to make decisions about where to focus them. If Apple decided to drop their Plus prices it is probably because they believe lower prices will bring higher volume. That might be true, but for me it hasn't crossed the threshold yet where my buying habits will change. For most of the music I buy now, I know I want it and I tend to buy it as albums-- so my demand is rather inelastic and the price hasn't really changed for me in any event.

If the price came down further, I'd explore more, and buy more music that I don't find as necessary. I don't know that I'm typical, but in my case that would tend to benefit new and independent artists, and artists in genres I'm less devoted to. Whether the added revenue from people like me would offset the loss in revenue from diehard fans is a decision someone else needs to make.

What I'm expressing isn't about entitlement. I don't think I deserve special privilege here. This is about value. What this music is worth to me. This is a market where buyer and seller need to decide on a price. If the price is higher than the value I place on the item, I have no music and the seller has less revenue.

Thanks for the link BTW.

You are probably right. And I am also sure I took your tone the wrong way originally (because again, I had just woken up and was grumpy! My bad.)

It is true I think that, independent artists could benefit from a drop in price because people would explore more, but it also means those artists need to spend more time and money of their own to get their music out there which isn't always as easy (certainly not as easy as having major label backing.)

One thing for sure though, with today's technology and online retailers like iTunes, Amazon and others, it has made it easier for independent artists to get their music out. I would have never been able to release my own stuff like I do now back in the 1980's (though I still kick myself sometimes for not accepting that Capitol Record deal back then!)
 
Unfortunately it doesn't work that way. Especially for independent artists. Just because the price is lower doesn't mean that the volume is going to go up.

All I know for sure is my own music buying habits. I bought over 500 CDs, many from indie artists over a 5 year period, when I lived near a couple of great record stores and could generally buy CDs for < $10. The next five years only added 100 CDs or so. Why? The stores near me didn't' carry the music I wanted to hear or were now charging > $15 per CD.

Now, I'm back to my old ways, buying ~1+ CDs/week including lots of tracks from smaller/indie acts, because the barrier to entry is much lower. I know I can try out a song or two for $0.99 each and buy the whole CD for $9.99 without leaving home.

Music is more of an impulse buy now than ever. Lowering the price only makes that easier. Friends and acquaintances also report the same phenomenon. Being able to buy single tracks allows them to remember a song and just go get it for instant gratification.

That said, for me, the competition provided by Amazon has actually dampened my impulse habit, since I now stop and see if I can perhaps get a song or album cheaper on Amazon than iTS. Though I have yet to find one,

Also, all the "players" involved do not get the same cut.

I certainly wasn't suggesting some sort of equal repartition of the revenue, I was just assuming that if the artist gets 1% of the $9.99 CD sale that they would also get 1% of a $0.25 song sale. (The middlemen of course taking the remaining 99% :p).

It is true I think that, independent artists could benefit from a drop in price because people would explore more, but it also means those artists need to spend more time and money of their own to get their music out there which isn't always as easy (certainly not as easy as having major label backing.)

FWIW the iTunes "Just for You" and Amazon recommendations systems know my tastes pretty well and I can usually find something I like without artist intervention.

Sigs like yours and even bumper stickers on cars have led me to various impulse iTuens buys.

B
 
I have to say I was quite impressed with Amazon's service. I downloaded the new Hooverphonic album using Amazon's download utility, and it was quick and easy. It also transfered it directly to iTunes for me.

8.99 for the album. DRM free MP3. 256 - no brainer!
 
Competition

Apple need to lower their song prices, especially as Amazon has now released its new music store, a sibling to Unbox video, which has been a bit of a failure for Amazon, because of high prices. Obviously, the market's got tough as the Virgin online music store has closed its doors, Apple really do need to lead this market, as the ipod family rely on it, in most cases.
 
All I know for sure is my own music buying habits. I bought over 500 CDs, many from indie artists over a 5 year period, when I lived near a couple of great record stores and could generally buy CDs for < $10. The next five years only added 100 CDs or so. Why? The stores near me didn't' carry the music I wanted to hear or were now charging > $15 per CD.

Now, I'm back to my old ways, buying ~1+ CDs/week including lots of tracks from smaller/indie acts, because the barrier to entry is much lower. I know I can try out a song or two for $0.99 each and buy the whole CD for $9.99 without leaving home.

Music is more of an impulse buy now than ever. Lowering the price only makes that easier. Friends and acquaintances also report the same phenomenon. Being able to buy single tracks allows them to remember a song and just go get it for instant gratification.

I must admit, my personal buying habits are pretty much the same as yours now. A couple of years ago I would buy 2 to 3 physical CDs every week (at least) and they were very specific ones that I wanted. Now, I haven't bought a physical CD in 2 years but I buy a lot more music through iTunes and most of it is very impulse buy. It is a curious phenomenon!

That said, for me, the competition provided by Amazon has actually dampened my impulse habit, since I now stop and see if I can perhaps get a song or album cheaper on Amazon than iTS. Though I have yet to find one,

Not for me, a few cents cheaper per song doesn't mean a whole lot to me. I still buy through iTunes because it's convenient and the price is already better than a physical CD in a store. I'm not a "penny pincher" so I'm not going to scour the internet to find the best price on music.



FWIW the iTunes "Just for You" and Amazon recommendations systems know my tastes pretty well and I can usually find something I like without artist intervention.

Though it still only recommends related artists based on how well they have previously sold (and based on how well that particular independent label promotes that artist.) Still, it helps...
 
Then hopefully your media management software includes a feature to automatically downsample your music as it is transfered to the portable player. That's been a feature in both iTunes and Windows Media Player for quite some time now.

So far, I only use bluetooth/memory card syncing and not aware of any media management apps from Nokia.

time to get an iphone... :rolleyes:

I will eventually (after my contract with T-mobile). Not into the hacking business.
 
After buying over 9,000 songs, countless TV shows and about 20 movies, I stopped cold.

I hate the video quality
I hate DRM
I strongly disliked the audio bit rate.

I still buy TV shows for the portability.

But I am back to buying CDs. Cheap on Craigslist. I will happily and willingly go back to Apple when there is more + content. I am happy about the move today, but I want to be able to upgrade my library to be future proof before I will feel comfortable buying online again.

But this is good progress.
 
Apple cuts prices on iTunes Plus
8:54a ET October 17, 2007 (MarketWatch)
NEW YORK (MarketWatch) -- Apple Inc. said Wednesday that it cut the price of its iTunes Plus tracks to 99 cents each and expanded the iTunes Plus catalog to more than 2 million songs. Tracks on iTunes Plus are free of digital-rights management, or DRM, software, meaning they can be played on many types of digital music players. With this price cut, iTunes Plus songs will be priced on par with those songs locked by the company's copy-protection software. Earlier this year, Apple struck a deal with record label EMI to offer some songs free of DRM software for about $1.39 each.


I want a refund on the songs that I already purchased at full price. :rolleyes:
 
Just in case...

Apple said:
iTunes Plus Now Offers Over Two Million Tracks at Just 99 Cents

Apple® today announced that it has expanded its iTunes® Plus offering to over two million tracks and lowered the price of all iTunes Plus tracks to just 99 cents. All iTunes Plus tracks feature DRM-free music with high quality 256 kbps AAC encoding for audio quality virtually indistinguishable from the original recordings (www.itunes.com). The iTunes Plus catalog is now the largest DRM-free catalog in the world, and includes artists from Sub Pop, Nettwerk, Beggars Group, IODA, The Orchard and many others, along with EMI’s digital catalog.

...
- http://www.apple.com/pr/library/2007/10/17itunes.html
 
Price drop has also taken effect in the UK store... screenshot attached. :)
 

Attachments

  • sdfsdf.jpg
    sdfsdf.jpg
    161.4 KB · Views: 96
Apple still needs to clean out some bugs with iTunes Plus. Just do a quick search on Nettwerk. I found two identical albums, but different offering ( iTunes Plus and non-iTunes Plus). Telling Apple.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.