Apple iTunes Australia - Oct 3rd?

[Stella]

B.S

Not before the entire music industry have driven people back to piracy due to unrealistic high prices.

 

[mikataur]

All I can say is...

If this rumour is from Russell Crowe, I'm going to throw a ROKR at him!

 

[Wardofsky]

Another date for the Australian iTMS? Not again...

I remember back when we all thought it was coming out on January 22nd because Apple.com.au changed their privacy policy to cover iTMS

 

[mad jew]

Yeah, I'll believe it when it happens. Although, I do have that feeling in my bones. It shouldn't be too long now...

 

[Abstract]

I disagree.

In the not-so-distant past (about 2000) Sony, Warner and the rest of the "major" record labels now doing business with Apple were sued by 40+ states for violating anti-trust laws by "artificially raising the price of songs" to consumers. In other words, the labels colluded with each other to arbitrarily set the lowest price for CD's that consumers would pay, preventing any discounting at retail and thus bringing the overall market price up. The labels didn't prevail in the suit and ended up settling the case (more on that later).

Prior to setting up the iTunes music store (which, tellingly, was Jobs idea, not the labels) the labels were, at that time, more preoccupied with keeping music off the internet. Jobs eventually convinced them that they could make money selling songs on the net, but the labels hedged the bet. By exposing the iTunes store to just Mac users, the labels felt less threatened from abuse by the small market share compared with Windows. They also felt, according to their sales projections, that the numbers from the upstart iTunes store would be very low, hence, they charged at least .70 for every .99 song sale. This wasn't due to their costs involved in providing iTunes compatible music, Apple does all of the encoding. All the labels needed to do was basically Fed-Ex the existing two-track master for the CD to Apple. So the labels figured if sales were low - and given that they still believed it wouldn't begin to dent the ubiquitousness of free file-shared songs - the absurdly high .70 per song share reflected at least some profitability (remember their cost) from the expected low volume of sales and eventual failure of Jobs' idea.

Apple knew better, but even Apple's most optimistic projections for the iTunes store didn't come close to predicting the almost immediate success of the store. Needless to say, it just blew away the labels expectations. The labels became believers, and thats when "hell froze over." The rest is rather well documented history and 80+ market share compared with other online music store wannabes. Apple did it's homework, and it paid off. Especially for the record companies. Apple initially lost money on the store, then broke even for awhile, and only recently has reported a modest profit specific to song sales from iTunes. In that regard, .70 per song was a huge amount to pay the record companies, and Apple saw the iPod as it's saviour.

The New York Times covered this story regarding the label's interest in variable pricing about a week ago. As it turns out, that's not all they're interested in. It seems the labels have become a little envious of Apple's iPod success now, and feel (God knows why) that maybe they should see a part of that action too. It's just amazing. The head of Sony Records mentioned that Apple sees two "revenue streams;" one from iTunes music store sales (what?), and one from the iPod. His next breath was to mention that Sony only sees one revenue stream, just from the music store. Then he says that revenue stream is so small "it would take a medical professional" to find it. This, on the heels of Apple's announcement that it sold over a half billion songs. Not to mention that Sony, in particular, is also involved in online sales and portable devices and is selling it's Sony label songs there. So I count three "revenue streams" One lucrative one from Apple (Sony's share of a half billion songs sold at .70 per song net profit) and two revenue streams from it's music store and portable players, which probably do need a surgeon to find any profit from those.

So if Job's doesn't want to be the labels's new partner in the latest price fixing scam, then perhaps he will fork over a percentage of iPod revenue. It's just amazing, expecially after Jobs (and no one else) saved their ass when the net looked, to them, like this: 😕

All in all, my problem with the record companies is that they are serial liars. Despite the phenomenal success of iTunes, the online music business is still very much in it's infancy and expansion - as Australians (among others) will attest. Apple has established the undisputed (in terms of market share) formula for success, which includes song pricing. Customers know the price of songs before they even log on to the music store. Changing the formula now, at this early stage of development, risks changing how purchasing music on the net is perceived. And since raising prices without justification is never perceived well, the former method off obtaining music on the net may enjoy a newfound renaissance. You don't need to be an economist to figure that out.

By the way, part of the settlement for the labels' antitrust suit called for them to donate CD's to public libraries in the states bringing suit. What did the labels do? They ended up unloading hundreds of copies of CDs from unknowns, artists that never sold, and stuff from their back catalog they couldn't sell. In other words, junk. In most cases, it was hundreds of copies of the same worthless CD. And yes the libraries complained, and ended up tossing almost all of what was the labels "settlement"

Nice guys, huh? 😡

Wow, very informative. Not sure on the accuracy, but informative. 🙂

 

[VanNess]

VanNess, your post was quite informative and interesting, but I'm confused about one thing. I said new songs are worth more to consumers than old songs and that therefore tiered pricing isn't illogical. I could certainly be wrong, but I can't tell what part of my claim you are disagreeing with.

Probably because I got on my soapbox too long 🙂

Okay, here it is: I don't agree that tiered pricing is logical because, although consumers do value music on a personal and emotive level (basically non-tangible levels), they still seek (and appreciate) a fair, reasonable price. Encountering arbitrary price increases relative to other songs being sold based solely on it's popularity, i.e., sales figures, at the time is more likely to leave the impression of outright gouging rather than a reflection of the honest "value" of the song, which is otherwise non-tangible to customers. Particularly when there are other songs which could be perceived as "valuable" in that sense on the store selling for less.

Prior to the explosion of file-sharing on the net, there were at least two main and rather vocal complaints about CDs. One was the lack of good (valuable) songs on any given CD (a few songs, maybe), and the other was the ever rising cost. And "popular" CDs weren't immune to that criticism. It certainly gave rise to file-sharing as an alternative, and you could get the songs that you wanted without the baggage of unwanted songs - and of course the price was right. iTunes essentially capitalized on that concept but reasoned that a song was still within almost everyone's grasp at .99, and offering the iTunes/music store/iPod triumvirate along with Apple's panache for doing it right was something that couldn't be matched by the file trading nets and would attract customers. It wasn't an overnight death nail to file sharing, but it reconnected a lot of consumers with a concept that had been missing in action for quite some time: a reasonable price for the music you want, not matter what your choice, taste, style, or preferences may be.

Variable pricing? To paraphrase Shakespeare, price gouging is still gouging by any other name

 

[conditionals]

Yeah, I'll believe it when it happens. Although, I do have that feeling in my bones. It shouldn't be too long now...

I had that feeling in my bones 9 months ago. Now my bones are withered, melty and incapable of feeling.

 

[broken_keyboard]

Apple's main advantage is that no other online music store can sell to iPod owners. And most everyone has an iPod. That gives them a very strong negotiating position.

Of course, one gutsy move the labels could make would be to start selling plain unprotected mp3 files from their stores.

It's funny, it was the labels that wanted DRM in the first place. And now DRM is the reason Steve has them by the balls. Karma? All their carefully laid plains were out-thought by Steve who even managed to turn the small market share of the Mac in to an advantage instead of a disadvantage. I marvel at his strategy sometimes.

 

[aswitcher]

Wow, very informative. Not sure on the accuracy, but informative. 🙂

I agree, an interesting insight.

 

[kretzy]

Well I hope we're not disappointed again...if we are there's always Limewire hehe (seeing as Kazaa just lost a law suit here in Aus)

 

[risc]

All I can say is...

If this rumour is from Russell Crowe, I'm going to throw a ROKR at him!

Too funny, I read this and spat my drink at my PowerBook thanks! 🙂

Here's hoping it's true this time, but I've heard it so many times now I'll believe in the .au store when I actually see that .au store!

 

[winmacguy]

How surprising the Australian music executives are haggling over how much they can rip off the public to ensure what ever percentage of people use iTune Music Store will still be compensating for that one less physical cd.

The industry here is a huge rip off to say the least and the irony is the executives get fatter whilst the talent gets lousier.

Given this tiered pricing system (or a ridiculous $1.75 per song) may be close to likely, iTMS here in Australia will probably only be used by the gullible or kids with access to mummy and daddy's wallets.

Buy the original cd I say and just be done with it.

I do that already and rip at 192kbps .aac

 

[Kace]

cheers to that mate

This is very good news, even though I'm not in Australia! I'm all for everyone to enjoy iTMS. Everyone should have access to it. I hope it comes through nicely for all you Australians out there! 🙂

nice, very nice... 3rd october. i don't know though, we've been dissapointed in the past. but if it comes through, would be just the icing on the cake, with my new nano set to arrive come monday.
-------
steve jobs to replace johnny hoo..

 

[conditionals]

...

Hmm, but the ho-ratio of Aus ITMS date predictions to actual Aus ITMS is like 5:0

 

[GilGrissom]

Hmm, but the ho-ratio of Aus ITMS date predictions to actual Aus ITMS is like 5:0

I know...I'm not saying it will happen or anything, I'm just saying how great it would be if it were true. I'm an optimist!! 🙂

 

[conditionals]

I know...I'm not saying it will happen or anything, I'm just saying how great it would be if it were true. I'm an optimist!! 🙂

Actually what I said was just an excuse for a lame CSI pun.

 

[yinyang]

How surprising the Australian music executives are haggling over how much they can rip off the public to ensure what ever percentage of people use iTune Music Store will still be compensating for that one less physical cd.

The industry here is a huge rip off to say the least and the irony is the executives get fatter whilst the talent gets lousier.

Given this tiered pricing system (or a ridiculous $1.75 per song) may be close to likely, iTMS here in Australia will probably only be used by the gullible or kids with access to mummy and daddy's wallets.

Buy the original cd I say and just be done with it.

according to this, these wonderful music execs have realised that they've lost on potentially 6 million sales through holding out for more money for doing very little....

http://blogs.smh.com.au/razor/archives/online_music_and_video/002078.html

not very bright are they 😡

and as for the pricing, i think it's going to be AU$1.69, cos that was the price for most of the tracks when that window of opportunity was available to buy off iTMSAu.

only a few weeks to go to see if the rumours are true, but getting a bit bored with this "will they won't they" stupidity.

 

[GilGrissom]

Actually what I said was just an excuse for a lame CSI pun.

Ah right! lol! Sorry about that!! I was a bit slow this morning!! All is forgiven! I get ya! 😱

 

[DJY]

i think it's going to be AU$1.69.

According to my Currency conversion widget that would be USD$1.31 (well actually 1.307 correct as at 9 Sep 05... mmmm

 

[samh004]

According to my Currency conversion widget that would be USD$1.31 (well actually 1.307 correct as at 9 Sep 05... mmmm

Isn't the UK getting an even worse deal on pricing... we'll always get screwed by the exchange rates... 🙁

 

[pmoeser]

Yeah...right. Aus iTMS? When Sony goes bankrupt

This $1.75/song stuff is crap. You and I both know it'll be $2 per song despite the exchange rate being where it is. The US-->Aussie exchange rate certainly isn't 1.75 or 2.0, but Australia charges way too much for music, and the people here don't know any better, so they pay.

And MR always seems to post "iTMS Australia coming (date here)." I say don't post this on Page 1. Post it on Page 2 from now on. I think you guys have gotten it wrong 5-6 times now. It's embarrassing.

Hey Abstract, if you wear a tornique on your left arm and around your pen%s to m#@turbate, it feels like someone else is doing it to another person. Think about it...
Pretty much what the Aus music industry is doing to people who want to buy the songs they want without being forced to buy complete albums of ***** music.
As a musician who tries to sell his own compositions, I hate the idea of Limewire etc, but as long as it is difficult to legally purchase music, that is where the kiddies will go.
Get real Sony/Warner, join the revoltion, don't fight it. You will lose. It is only a matter of time.
October 3rd? Maybe when the Beatles do a reunion concert...
I will never buy a Sony Warner product unless it is from an iTMS
The same should apply for every Australian and every Mac iTMS user

 

[Kobushi]

Probably because I got on my soapbox too long 🙂

You and your big ol' posts 😛 That's okay, I think most of us really do enjoy them.

Okay, here it is: I don't agree that tiered pricing is logical because, although consumers do value music on a personal and emotive level (basically non-tangible levels), they still seek (and appreciate) a fair, reasonable price. Encountering arbitrary price increases relative to other songs being sold based solely on it's popularity, i.e., sales figures, at the time is more likely to leave the impression of outright gouging rather than a reflection of the honest "value" of the song, which is otherwise non-tangible to customers. Particularly when there are other songs which could be perceived as "valuable" in that sense on the store selling for less.

I disagree (in part). If there is to be any kind of gouging (aka tiered pricing), basing it on the popularity of the song is pretty much the only way to do it. As you alluded to, basing pricing on the perceived "value" of a song is too subjective. No two people are going to agree on the emotional value of a song as was evidenced not long ago in a thread regarding the new motorolla ad. (summary: basically everyone said everyone else's music sucked)🙄 However, subjectivity is not the only reason this ambigous definition of value would not work. Could you imagine if you were an artist selling music on iTMS? Say you're Brittney Spears and you see that your emotionally and intellectually devoid music is selling for $.49 while some no name person (who actually has talent) is able to sell his/her music for $1.49. You'd probably throw a hissy fit, stomp around the room yelling "I want my two dollars😡", and tell your label you don't want to sell through apple anymore.

While I don't agree that the label execs should be gouging people on any level, populartiy would appear to be the only way to do it. Besides, higher prices may discourage people from encouraging some of the um...."musically challenged" artists coming out nowadays. 😉

 

[aswitcher]

According to my Currency conversion widget that would be USD$1.31 (well actually 1.307 correct as at 9 Sep 05... mmmm

+ GST is $1.44 AUD. 🙂

+ Apple profit gouging (no shipping costs with electronic only goods, likely to be run off the same USA servers) ...

 

[irock]

Sorry if this is off-topic... but do you guys think iTunes is going to launch iTunes Taiwan & iTunes Hong Kong?

iPod sells really well here in HK probably due to Apple's heavy ads bombardment.

I am willing to pay $10 HKD a song ($1.28 USD) given all phone carriers here sell theirs at $14 / song.

Granted, HK is a pretty small market compared to the places where iTunes stores have launched, and most people download MP3s from the net like there's no tomorrow. 😱

But there are people who are willing to pay... too bad they are limited to WMA DRM.

 

[zv470]

Fair Go is the sort of junk that you'd expect from state television. Shame on you for even watching it let alone taking it seriously.

😉 State run is still better than Sky TV, but anyway... I do take it seriously... next day people at my work were talking about Fair Go, about how bad iPods were, and how Apple make crap that is too easy to damage, I had to do some serious damage control.

And... as things turn out the kid has confessed about lying, he'd dropped it, the LCD didn't have a manufacturers fault. I hope next week they will set things straight. I bet his mum is really embarrased.