Apple to End iTunes Music Store Uniform Pricing Model?

[Disturbed]

What Music Company Exec has Mac Er on his/her payroll. . . One can only speculate. I can, however, assure you, Mac Er, that this is not the place to fly that flag. Demi God or not.

DRFSR. I love it.
Now, it's time to raise your fists to the labels!

There is no doubt that we are talking about pure greed. With digital music, the gross profit margin is much higher because there is no physical product to manufacture and no physical distribution. I wonder what their gross profit is on an album that is sold for $9.99 - perhaps $8 or $9? So, the gross profit is ~80%-90%. I don't know what it is for a CD, but I bet it's around 40% or so.

If digital albums cost about the same as physical CDs, I will go back to CDs. Better yet, maybe I'll just join BMG or Columbia House again. Or maybe I'll just go to allofmp3.com again. (Of which I have not used in a long time. I buy all of my music from the iTMS.)

😡

 

[Fukui]

I think the music industry does understand this.
What I don't understand, is why a large portion of people on this board don't understand "supply and demand."

This is an example of demand. If the demand is high they get to charge more.

Um, does supply and demand theory apply to non-physical sales? So if pathfinder 4 (yes! its comming!) turns out to be incredibly popular they should raise the price becuase the demand is so hight they cant download it fast enough, so they gotta raise the price to reduce the load?

It sounds ridiculous doesnt it?

Supply and demand applies to products that are manufactured at a fixed cost and must be balanced with supply in order to reach equilibrium, but in the virtual world, there is basically an unlimited supply! Increasing bandwidth to allow downloads at the millions is grossly cheaper than sending millions of CD's out to retail.

In this case, its trying to apply old rules to a new system because the old people in charge are too old.

 

[gugy]

like I said many times before,

Itunes
1 song $0.99
whole albums $5.99

if Apple is pressure to change the cost of 1 song we'll see an increase of illegal downloads and Steve already said the same.
Whole albums must be cheap. I don't see advantage to buy an album at Itunes. No artwork bad compression. I would rather go to Amoeba and buy an used CD for $9.
All Itunes music should be 192kpbs.

Music industry is just sucks CDs should cost $9 nowadays. It's just greed to charge $18 for a CD with production costs so cheap. Greed, Greed, Greed!😡

 

[quigleybc]

1. Sueing people for downloading music. Kids mind you.
2. Putting software in CDs to disable music playing on your computer. Thus infecting your computer with a virus.
3. Charging $20 for a freakin CD of songs that have like 3 good ones and the rest suck.
4. Thwarting good technology in the name of keeping copyright infringment down.
5. Making it illegal to do anything with a cd like copying it, ripping it, lending it to a friend all in the name of copyright infringment.


Burn baby burn. They sure will.

Great post, couldn't have said it better myself....

 

[OnaMacSince1989]

I had heard the new Madonna album was good, so I went over to iTunes to preview it. It comes with 12 tracks, some digital booklet, and a music video, all for $12.99. I thought about $12.99 showing up on my statement (I am a student part time work, make about $50 every two weeks), and I thought I just can't spend that money. I need to buy shoes and clothes for winter. Real things thatwon't disappear if my computer crashes. And so I thought how much would I pay for that album with the video. At $2 I might be tempted. LOL...anyhow, yeah I get the two free downloads a week though.

You are smoking dope if you think you will get 12 songs and a video for $2. And what exactly did you do when you bought CDs? That same album in traditional CD format is probably $14.99-$17.99

As with many popular new releases during the first week of release, you can pick up Madonna's new CD this week at many retailers (ie: Best Buy, Target, Circuit City, etc.) for only $9.99. I much prefer to have the original high-quality manufactured CD and liner rather than the downloaded versions with materials printed on my home printer. No way would I pay the same amount for inferior downloads as I would manufactured CD's. The music labels are kidding themselves if they think they can grow their business by charging more for downloaded music.

PS. This is THE Madonna album to buy...best in years!

 

[lolex]

To be success ,you need access to the majority of people,
To access to majority of people, you need something people affordable.🙄

In the music industry, I don't see a model which can successfully accessed to the majority of people like the Mcdonnal's , Coka Cola, Apple, Google etc, which you always have good faith with these Label,

Itune is looming , to liberate the market and potentially be the one finally accessed the majority, and music label will be decimated. 🙂

 

[Disturbed]

I agree that this is not a supply and demand issue. This is a conscious attempt to try to capitalize on the digital download trend, which is still in its infancy. It is incredibly shortsighted to make changes at this early juncture. I am very sure that all music stores will be affected. Would subscription services make more sense then? I don't know. Perhaps they too will go up in cost.

At this juncture, I am not going to pay 2 bucks for one song. Simply is not going to happen. It's the point. Now, I could see a small increase - say 10 cents or so. All costs go up due to inflation, etc..., but if it went from $0.99 to $1.49, that is not fair. A 50% increase overnight.

What if automobiles went up by 50%? Or your electric bill? Or your cable/satellite bill? It is a matter of principal and fairness. I'm not saying that they should never be able to raise prices, that is not the issue. As long as it's a reasonable increase, I'm fine with an increase.

 

[quigleybc]

Hypothetical:

ITMS prices go up-
More and more people switch to p2p and Bit Torrent-
Even more people people "pirate" music-
The music industry goes competely bankrupt-
There is no major industry to record, promote, and sell music anymore-
Music recording goes back to indepenant, underground enthusiasts-
Music is sold out of the trunk of cars, and at street perfomances and shows-
It is a level playing field where you will succeed only if you have talent-
No longer can 16 girls with a pretty face undergo a makeover and team of assistants and song writers to be succesful-

ya right.......😱

 

[ioinc]

Um, does supply and demand theory apply to non-physical sales? So if pathfinder 4 (yes! its comming!) turns out to be incredibly popular they should raise the price becuase the demand is so hight they cant download it fast enough, so they gotta raise the price to reduce the load?

It sounds ridiculous doesnt it?

Supply and demand applies to products that are manufactured at a fixed cost and must be balanced with supply in order to reach equilibrium, but in the virtual world, there is basically an unlimited supply! Increasing bandwidth to allow downloads at the millions is grossly cheaper than sending millions of CD's out to retail.

In this case, its trying to apply old rules to a new system because the old people in charge are too old.

Is there an unlimited supply of popular music?

There is a limited supply of popular music that consumers are willing to pay a premium for.

There is a high demand for popular music (by definition of being popular)

There is a cost associated with marketing and production of music.

The rules are the same.

We can't reinvent the rules of a free market economy just because we want to pay less.

Stealing music off of Limewire is no different to than taking a CD off the store shelf and not paying.

For all those people that say they will go back to limewire... why not just pick them up at Wal-Mart for free. All you need is a coat with big pockets and no morals.

 

[woolfgang]

I've worked in the music industry and I've worked in bookkeeping. The reality of the situation is that the companies write losses to piracy into their price to begin with. So they're already being covered and if the piracy is less than expected, they make even more. It's pure greed.

 

[ioinc]

At this juncture, I am not going to pay 2 bucks for one song. Simply is not going to happen. It's the point. Now, I could see a small increase - say 10 cents or so. All costs go up due to inflation, etc..., but if it went from $0.99 to $1.49, that is not fair. A 50% increase overnight.

What if automobiles went up by 50%? Or your electric bill? Or your cable/satellite bill? It is a matter of principal and fairness. I'm not saying that they should never be able to raise prices, that is not the issue. As long as it's a reasonable increase, I'm fine with an increase.

Its not a question of fair or not fair. There is not constitutional (or God given) right to cheap music.

It is a question of what price the market will bear. If it goes beyond a point you want to pay... don't buy it.

Its not unfair that I can't buy a Ferrari. The car is simply out of my price range and I don't buy it.

Electric bill is a bit different since they don't compete in a free market (and they typically have limitations on increases in charges).

Cable is not. If they price of cable goes to high get a dish. If that too is too high read a book.

 

[qevlhma]

sup and demand

ioinc:

You are actually wrong about this... sorry to have to be the one to say it.

The very concept of supply and demand relies on a limit to physical goods.

ie: there is a finate amount of water in the worLd, so everyone could not have as much as they want.

Technically speaking there is an unlimited amount of copies of a digital work.

We are not re-inventing the wheel here.. if you think about it..

What is the supply and demand for air that you breathe?

 

[whiteg]

Great News

Gripe a

 

[whiteg]

llll

 

[yadmonkey]

Now people, I don't think you understand the stress these major artists suffer... how else can Justin Timberlake afford a gold-plated shark-tank bar if he gets the same money as some crappy jazz or classical musician? Lesser artists don't NEED a gold-plated shark-tank bar, but an artist of his calibre has an image to maintain.

I know we have brothers and sisters around the world starving with flies on their lips, but what would MTV Cribs be if female artists couldn't afford 3500 square foot shoe closets fitted with plasma televisions? Would you have them wear the same pair of shoes twice? I think even my starving brothers and sisters would shutter at that notion.

 

[rickvanr]

Now people, I don't think you understand the stress these major artists suffer... how else can Justin Timberlake afford a gold-plated shark-tank bar if he gets the same money as some crappy jazz or classical musician? Lesser artists don't NEED a gold-plated shark-tank bar, but an artist of his calibre has an image to maintain.

I know we have brothers and sisters around the world starving with flies on their lips, but what would MTV Cribs be if female artists couldn't afford 3500 square foot shoe closets fitted with plasma televisions? Would you have them wear the same pair of shoes twice? I think even my starving brothers and sisters would shutter at that notion.

Took the words right out my mouth. Couldn't agree more... 😀

 

[yadmonkey]

And if you've ever written a song you'd play for someone that's decent, you know it takes a significant amount of guts to do it.

Well said. As a struggling jazz musician, I can certainly say you are correct. So few musicians ever make it past the dreamer stage and those who do pay dearly in sweat and blood, figurtively and literally. They usually do it without the respect and blessing of their piers and families, they do it without the basic comforts most of us take for granted... it's the ultimate labor of love and in the end, few ever achieve anything close to financial abundance.

Even a mega-successful artist like Eminem has more than paid the piper and in my opinion, deserves every penny he gets.

 

[ioinc]

ioinc:

You are actually wrong about this... sorry to have to be the one to say it.

The very concept of supply and demand relies on a limit to physical goods.

ie: there is a finate amount of water in the worLd, so everyone could not have as much as they want.

Technically speaking there is an unlimited amount of copies of a digital work.

We are not re-inventing the wheel here.. if you think about it..

What is the supply and demand for air that you breathe?

There is a limited amout of popular music.
Every cd a record company produces does not go gold.

 

[ioinc]

Now people, I don't think you understand the stress these major artists suffer... how else can Justin Timberlake afford a gold-plated shark-tank bar if he gets the same money as some crappy jazz or classical musician? Lesser artists don't NEED a gold-plated shark-tank bar, but an artist of his calibre has an image to maintain.

I know we have brothers and sisters around the world starving with flies on their lips, but what would MTV Cribs be if female artists couldn't afford 3500 square foot shoe closets fitted with plasma televisions? Would you have them wear the same pair of shoes twice? I think even my starving brothers and sisters would shutter at that notion.

This is silly.

Does this mean that Steve Jobs should give up his millions, his big house, his private jet, just because there are people in the world are starving?

Not just Steve, must any CEO of a big comanpy.

In fact... if we are on a global scale.... anybody with two twenty dollar bills to rub together should give one away.

 

[k2k koos]

Greed, that's all it is.

Once a gain a tipical example of greed from the record companies to push for higher prices. The big artists (and especially the record companies) make more than enough money for their music due to the sheer volume of sales.
Higher prices are unacceptable. for starters we do not want to pay the same money for an album if it doesn't come with album inlays, lirics and case, on a silver disc.
Unknown artists have the right on earning the same money for a song, and when they sell mere they earn more. Simple, and that is how it should be.

Stop milking the consumers, and for once be resonable, the above is not at all reasonable and not open for negotiation with us, the consumers and customers. We may as well go back to copying music if this is the way it goes.
I don't copy music from other people at the moment because of the convenience of the iTunes store and the fair pricing. Change the pricing, (higher) and I won't be buying. And I'm sure I am not the only one.

Get real record companies!



😡

 

[deadturtle]

Hear Hear (Or Read Read!)

Hear! Hear! We all need to read more.

Cable is not. If they price of cable goes to high get a dish. If that too is too high read a book.

The concept of iTunes raising prices is something, frankly, im suprised didnt happen sooner. The industry sees a way to get more income, the concept of adapting their price structure to the new system is un-American. We are a society of greed. If pro-sports played for a liveable wage (say 100,000/yr) they would make more than enough to be/live comfortably and ticket prices would go down, because the cost of the team would be less, and more people would go to the games, thus driving the total costs down (and profits up). The music industry is the same way. They dont see that selling more for less will, in the end, equal more. Our concept as a society is that MORE is ALWAYS better, and that to receed is unsightly, cowardly, and just plain not done. I wonder if it has ever occured to them that if they dropped the cost of songs just 5c, they could possibly sell 5x as many songs thus making, roughly, 1/5 more than they would have if they had kept prices the same, or more had they raised them, thus loosing customers. Will I buy from iTunes if the price goes up? Possibly, I am fond of the single song method of listening, will I buy if the raise is 50% or more, no.

 

[ioinc]

Once a gain a tipical example of greed from the record companies to push for higher prices. The big artists (and especially the record companies) make more than enough money for their music due to the sheer volume of sales.
Higher prices are unacceptable. for starters we do not want to pay the same money for an album if it doesn't come with album inlays, lirics and case, on a silver disc.
Unknown artists have the right on earning the same money for a song, and when they sell mere they earn more. Simple, and that is how it should be.

Stop milking the consumers, and for once be resonable, the above is not at all reasonable and not open for negotiation with us, the consumers and customers. We may as well go back to copying music if this is the way it goes.
I don't copy music from other people at the moment because of the convenience of the iTunes store and the fair pricing. Change the pricing, (higher) and I won't be buying. And I'm sure I am not the only one.

Get real record companies!



😡

It does not matter how many times Atlas Shrugges.... people won't get it.

Every artist does not have a right to earn the same amount for thier work.

You earn an amount based on the quality of the work as judged by the consumer.


Atlas Shrugged is a book by Ayn Rand

 

[yadmonkey]

This is silly.

Does this mean that Steve Jobs should give up his millions, his big house, his private jet, just because there are people in the world are starving?

Not just Steve, must any CEO of a big comanpy.

In fact... if we are on a global scale.... anybody with two twenty dollar bills to rub together should give one away.

Yes, it was meant to be silly. Thanks for picking up on that... or did you? It was a joke. But then you extrapolated all kinds of crap from it which I didn't intend. THAT'S silly.

Of course I don't think Stevey should give up anything and I think he deserves the abundance he's generated. What I was joking about is how frivilously some of these people, particularly those on MTV Cribs, spend their money on excesses. Money is power and I believe that with power comes responsibility. I don't blame a rich person for buying a nice car, but personally I could not justify spending $50,000 on rims when there are people with flies on their lips.

But then again I was cursed by being born with compassion.

 

[jiv3turkey748]

this is crazy $1 is already a little to much for one song
all this is going to do is increase piracy

 

[Sunrunner]

Music industry sucks.

I can't see this being good for the iTMS...

I think a good option might be allowing publishers to LOWER their prices in iTMS, but I think .99 is a good ceiling. Despite all the talk about how successful the iTMS is, it is still an emerging technology. With only 2% of the music sales made anually going to online sources, a price hike would easily kill adoption of the new music-purchasing medium by the main stream.