Apple to End iTunes Music Store Uniform Pricing Model?

[MacFan782040]

It's so easy to do whatever you want when you can define your own price. Record companies, oil companies, government, tomatO, toMAHto...

I can only hope that more people will seek out the "cheaper," better alternatives to the higher-priced "same old crap."

Heck, I'll sell you MY stuff for a nickel!
WOOP!

Yeah... I agree. I don't really see their reasoning here. If they sell a million tracks at $1 each, they make a million dollars. And without me doing the math, if they sell 700,000 tracks at $1.29 each, they probably make similar to what they were making before with songs being $1. I don't get it. They're greedy.

 

[MacSA]

"There is a case for superstars to have a higher price." ??


Well, I suppose most of them do have an extravagant lifestyle they need to maintain.

 

[Lertie32]

Rip RIAA a new one...

This whole thread is somewhat pointless because there's no detail about WHAT the pricing structure would be. Until we know that, we don't know if the range goes up ($0.99 to $2) or down to ($0.50 to $0.99). Knowing the evils of RIAA though, I'm REALLY hoping it's not as bad as we expect.


As far as I'm concerned, the music industry should be kissing Steve's toes for even creating the iTMS and NOT hassling him about increased prices! They should imagine the world with no iTMS and even more P2P and they should shut the hell up. WHY mess with a good thing?! Idiots!


Also, this is idiotic to begin with because the music industry is KNOWN to manipulate who's popular and who's not.

And we most definitely can't trust CDs and the record companies anymore -
https://forums.macrumors.com/threads/159412/
What's REALLY scary is if they start adding their DRM crap to the actual song files!

I think that iTMS is a great solution and source for obtaining music, but if price goes higher than $0.99, piracy will go up. Period.


Not to mention the fact that everyone will hate the record companies even more. More artists will start self-publishing and self-promoting, and the record companies will die. Now there's a happy ending!

 

[nagromme]

I hope Apple isn't forced into this. One-price single simplicity is one of the strengths of iTunes, and the albums already vary.

Oddly enough, the less-popular stuff I want from a CD store often seems to cost the same or MORE than the "superstars."

Guess I shouldn't complain if the opposite happens on iTunes...

 

[KEL9000]

it makes perfectly good sense that the RIAA would want to charge higher prices for songs that are in more demand than others. This is the basis for price theory where price is determined by supply and demand only. Since the supply is constant it is only logical that demand alone would drive prices.

What I don't understand is when you go to best buy to get a CD the new popular cds are usually discounted and rare hard to find cds are really expensive. The music industry prices pop music as if it based on supply (look how many 50cent cds there are). This model is contrary to the limitless supply the internet brings which they think allows them to let demand drive price.

How can you have two different price models based on supply channels? If they charge $2 per song people will find other means for acquiring music (legally or illegally). Thus reducing the demand, which would in turn reduce price. It seems to me it is more about power than money.

 

[dashiel]

i don't have anything against variable pricing, but $1.49 should be the absolute ceiling for any single at lossless quality. if the record companies adopted a pricing structure similar to allofmp3 they would clean up. not only that but it would almost eliminate piracy.

here's how i think it would work:

• all singles older than 1 year are priced at ¢25 and encoded at 128kbps
• all single albums older with 10 or more songs are priced at $2.49 and encoded at 128kbps
• users can set a preference to their encoding format which would:
  • 320kbps - ¢40/$3.99 (includes extended ID3 tag information)
  • lossless - ¢60/$6.99 (includes digital booklet)
• new/hot/superstar singles less than a year old are priced at ¢99 and encoded at 128kbps
• new/hot/superstar albums less than a year old are priced at $9.99 and encoded at 128kbps
  • 320 kbps - $1.09/10.99 (includes extended ID3 tag information)
  • lossless kpbs - $1.49/14.99 (includes digital booklet/video)

if they did this the record companies would dwarf their current profits, they're just not smart enough to see it.

at the minimum price they would capture the kids/teens who don't have a ton of cash and really only listen to their ipod/car stereo anyway. music fidelity is irrelevant to them. at that price and combined with the itunes ease and speed of the itunes client, i suspect you'd see piracy drop off sharply; the immediacy and reliability of itunes coupled with a cheap price renders slogging though a P2P client or asking a friend to burn a CD an expensive inconvenience.

at the media price you would hit the slightly older user who listens to their music through higher fidelity computer speakers or wirelessly through airport express. the added incentive of extended ID3 track information would be appealing as well.

at the high price you get the fans of a band who want the digital booklets videos. you also get music archivists and audiophiles who don't mind paying the extra for true cd quality music.

--

speaking anecdotally, i at one time owner more than 1,000 cds, i've pruned that down to about 500, but i was buying on average 70-80 albums a year at the peak. this year i've bought 2 albums and maybe $20 worth of itunes tracks. i haven't replaced my purchasing with a P2P client either, just with the price of CDs do i really need that re-mastered version of artist X, or the collection remixes by artist Y? the answer these days is no, not at $20 an album. however with a service like the above, which can be seen in allofmp3, that barrier of "do i really need" becomes "oh cool i want that". if that 3 disc set of remixes that costs $42 in the store costs $18 for lossless download, or $8 for the 128kbps version, that's not even a question in the minds of most music consumers. on itunes it's $34.95 for 128kbps, for me that's not worth it.

i know the record companies would never do that because they'd see it as losing money, but that's because they're short term thinkers who with each passing day are expediting their own demise. good riddance.

 

[iDONTdoWINDOWS]

Back to P2P filesharing. I wont pay more than a buck for 3/4 of the stuff on the ITMS

 

[Anawrahta]

Do none of you guys know the difference between copyright infringement and theft? Is it that hard to understand? I'm astonished by the lack of knowledge here. I still can't believe how many people think that downloading music over p2p is theft. I guess the RIAA's brainwashing has worked wonders on all of you.

/glad to live someplace where music is free
/never bought itms crap anyways

 

[xy14]

Cool Idea

Apple should charge a base fee of $0.49-$0.79 for unsigned/unpopular artists, then charge $2.29 for the most popular artists, and then take 75¢ out of the $2.29 music and give it to the unpopular artists. Then, the remaining $1.50 will be divided:

25¢ to Apple
54¢ to artist
75¢ to Evil label company

The unpopular artists will end up about as successful as the popular artists, because people can buy their music for only 49¢ which they will see as a good deal, but the 75¢ taken from more popular artists will be taken and given to the less popular artists which will be seen (by the artists) as the equivelant as (roughly) a $1.25 song, and Apple will take the same 25¢ out, and then the artist will be left with $1.00 which is even more than they get now (more like 70-80¢). Therefore, the unpopular artists will get more money to promote their music and eventually as they get more popular, they will get less money per song and when they become one of the more popular artists, they will have 75¢ taken out of their music, which will be given to the potentially future popular artists.

After reading this, I got a new idea. This will create a lot of 'middle-class' artists and less lower/upper class artists, which is always a great thing!


Sorry about the long message. I just get carried away alot..

 

[Maestro64]

But this is a different scenario. The $5.99 CDs were originally $12.99 (or whatever), but didn't sell well. Unfortunately, the store still has a stock of them. Selling them at $5.99 is better than throwing them away, hence the reduced price.

It's not like the record companies said "This music is crap, let's sell it for $5.99." They said "This music is crap, let's sell it for $12.99." Unfortunately for them, Best Buy or whomever bought the music at the original price (no, not $12.99 to them) thinking they would sell it. And they didn't.

With digital music, it's completely different. The distribution costs are essentially nothing. You don't manufacture and stock CDs hoping to sell them, you simply release another copy when it's purchased. The $5.99 bin goes away.

Besides, if the digital model were indeed the same as the physical model, all music would start out at the same price, and unpopular music would be reduced.

This is very true, what people have to understand about the current CD model and how pricing is set and why the $5.99 bin exist at Wal Mart.

Here is the simple example, you buy 1000 items for $500 and you sell them $1.00, (100% markup which is typical). after a month or so you sold 750, so that means you recieved $750 and profitted $250. So you could have the remaining 250 sitting around for months in hopes to get the last $250 or sell them for $0.50 and make another $125 in a short period of time. It is well understood the longer something sits on the shelf the less desirable it is and less likely it will ever sell. This is exactly what Wal Mart does, as soon as they max out thier profits at one price they lower and so on until not more is left.

In the digital world, the incremental cost to sell another item goes down, however, there is still a shelf life to a product. For the most part ITMS was selling music which has been around for a while. Most recently you are seeing new songs. From a business stand point why not charge a bit more for the first download verses the 1 million. Remember, everyone and this includes the musucians have to be able to recover thier original production costs. In order to do this you set your initial offering a bit higher and as you exceed your base costs you started to reducing your price.

Also remember there are early adopters who will buy things as soon as they come out no matter what the price. Then there is the rest of you who want it free. Everyone has a reserved price they are willing to pay and if you do your pricing model right you can get every dollar that anyone is willing to spend.

Just remember no one is forcing you to buy, and there is always FREE radio

 

[zap2]

i hope people dont like my music!

 

[otterpop]

Let's get something straight.
Yes, it -would- be nice to see indie and unknown music at the 49/79 cent mark. but it's NOT going to happen. It -would- also be nice to have affordable health care in this country. same result, not going to happen. Unknown/unpopular music will stay at 99 cents, (in the best case scenario, you know they'll want to make it $1.25) and the "superstar" music will go up to $1.50/$1.99.
It doesn't matter what -we the consumer- want. Because the music industry has never been about giving the consumer what it wants, it's about shoving the flavor of the month down people's throats. Fact is, the recording industry is evil. They're sons of bitches, and they don't care about you or what you want. If it was about giving people a good product, at a fair price, you'd know who Juce to Make It Happen is. CDs would cost $6, and lindsey Lohan would NOT HAVE A RECORD CONTRACT.

edit: just wanted to also add, the recording industry would kill your dog if there was a dollar in it for them.

 

[cxny]

This could be very good for lesser known artists, people would be more willing to experiment, but only if the record companies don't get too greedy
the lower end should be 50 cents, with 75% of the ITMS catalog falling to this price level. I don't care if they charge $2.00 for "the hits" - keep 'em for all I care.

 

[MM2270]

True

Bwaha! Why would sales of iPods drop? People would just be stealing more MP3s. There's nothing to stop you from putting those on your iPod. If you think the iTMS is the big reason why people are buying the iPod, you're nuts.

Yes, I agree. For people here claiming that iPod sales will drop, please put down the crack pipes! People aren't buying iPods just so they can use iTMS. I would bet there are plenty of iPod owners who have never bought a single track from iTMS. Believe it or not, many folks still buy… wait for it- CDs! Yes, I know, hard to believe it, but it's true! And despite Apple's very heart-in-the-right-place label about 'not stealing music' on every iPod, people still do steal music and put in on their iPods.

As for this price hike, it never ceases to amaze me how greedy and stupid the music industry people are. The current model is perfect because you never have to think about the price of a track when on iTMS. They're pretty much all 99¢, unless it's an album only track. I don't want that to change. All the price increases will do is make honest folk think twice about dumping something in their cart on iTMS. Sales of music thru iTunes may actually drop, resulting in less profit. Morons!

Though personally, I may not have a problem with this price increase, provided it doesn't go above $1.49 a song, and the least popular tracks (read- often the BEST music) drops to say, 79¢. Everything else in the middle can stay at 99¢. If they do it like that, I won't care, because like some others here, I never buy the "popular" music, since it's most often crap. I make do very nicely without any Britney music in my iTunes library, thank you very much. I usually go for the more off the beaten track stuff. So in this model, people like me may come out ahead.

For anyone hooked on the popular junk, now would be a good time to change your musical tastes, and start listening to the less manufactured stuff the industry tries to push on everyone.

 

[ijimk]

No way will i pay more than 1 dollar per song... This will be the begining of the end of the music store...

 

[SummerBreeze]

So many people here are saying that this is going to be good for them because they don't like popular music, I say that thought is delusional. First off, prices aren't going to go down. I'm sure prices will just go up for "superstars." Also, I don't see "superstars" as being just bands like Black Eyed Peas and 50 Cent. I'm sure even lesser known bands will have more expensive singles because their songs are new, and could possibly sell.

 

[nsjoker]

I really don't have a problem with this, and its not a foreign concept, like many people are treating it.

Traditional CDs and DVDs work the exact same way -- new releases and more popular items are more expensive than older, less popular CDs and DVDs. Hence, the bin of $ 5.99 CDs/DVDs at the store.

Why should digital music and movies be any different? (And, why aren't you people out bitchin' about the traditional CDs/DVDs cost structure if this model will be so "evil")

In addition, this rumor says nothing about "superstars" getting more money. It says "more popular". Supply and demand. Number 1 song would cost $1.99 when its first released and then probably drop to 79 cents when no one wants it no more (just like traditional CDs)


Limewire will be gone within the year, just as Grockster just went. Sorry, but the industry is rightfully winning cases against people who steal.

ahh that's where bitTorrent comes in my friend =) and now with trackerless support, it's pretty close to impossible to "shut down". w00t

 

[Squozen]

What a load of ****. I know someone who won't be using iTunes for much longer. The thing is, the **** you buy from iTunes isn't even in Lossless format, it's in that useless AAC, and that just ain't worth paying. And there's another thing, why the hell doesn't my iPod play Lossless music? Why can it only play ****** quality AAC music? Heck, I'd never have bought me a Bose SoundDock if I'd have known...

The iPod plays Apple Lossless just fine, assuming you have a reasonably recent model with the latest firmware.

 

[Lord Blackadder]

I think one of the biggiest irritants with the concept of introducing tiered pricing is that it is essentially fiddling with a system that already works for the consumer in order to increase profit margins for the music industry to the detriment of the consumer.

Sony, EMI and others aren't doing much if ANY actual work here, yet they feel they're entitled to more money. Huh?

Artists write and record the songs, largely at their own expense. The record companies supply their track to Apple, who sell the music using an electronic infrastructure that they built, for use on iPods they designed, built and marketed. The record companies get a big check, part of which goes to the artist. I fail to see why they even need to exist in this arrangement.

I really think that piracy, while perhaps not a good thing on it's own, is appropriate in the context of it being a market pressure against price gouging by the industry.

 

[Maestro64]

Yes, I agree. For people here claiming that iPod sales will drop, please put down the crack pipes! People aren't buying iPods just so they can use iTMS. I would bet there are plenty of iPod owners who have never bought a single track from iTMS. Believe it or not, many folks still buy… wait for it- CDs! Yes, I know, hard to believe it, but it's true! And despite Apple's very heart-in-the-right-place label about 'not stealing music' on every iPod, people still do steal music and put in on their iPods.

So is it stealing if your friend brings his CD over and you load it onto your iPod. Also, is it stealing if you create a digital copy of something that the original owner never offered (At one point the music industry never sold mp3, only CDs so it was hard for them to claim they lots money, you can not lose what you never offered for sale) ITMS has actually help them win their court cases.

I too agree there is a group of people who never bought from iTunes so ITMS does not drive iPod sales.

Also, if the music industry had it their way they would not want you playing your music so others could hear it.

 

[Squozen]

First, are you a communist, second the reason a song is unpopular is because the artist/song "S@#Ks" and why would you reward mediocrity...

Bad to assume the reason it is unpopular is because they are not making enough money.

Popular songs aren't popular because they're good, they're popular because the industry spends an obscene amount of money saturating the media with them. If they were good, popstars wouldn't lose popularity after a couple of years. Heard Billy Ray Cyrus's latest album? Didn't think so.

 

[winmacguy]

Back to Limewire I guess

Too bad, I only spent $182 on music, now its going to be $0

A few days ago I was getting flamed for saying that I didnt have a problem with borrowing a few CDs from family to rip and add to my collection I still dont have a problem with borrowing and ripping CDs to add to my collection The bulk of my collection is from CDs I have purchased.

 

[VanNess]

These guys are beserk

First of all, you have to be careful when reading a statement like "there is a case for superstars to have a higher price" in the sense that it implies the "superstar" artists will get an additional profit from songs sold on iTunes in excess of 99 cents. That's not what the record companies are really saying. Generally, artists contracts aren't structured that way; the record companies "expenses" related to the artist are always deducted from actual song sales before the artist sees a dime of income from the record companies. That's why most artists, even the superstars, make the bulk of their money touring, where the record company doesn't have their hand directly in that till.

And it shouldn't go unnoticed that the record companies have never said that their new-found interest in raising prices on iTunes is even partly on behalf of increasing the artist's stake in profits. To the contrary, as failed self-described musician, whiskey company heir, and - surprise - current Warner Music Group CEO, Edgar Bronfman Jr., says on Red Herring back in September of this year: "We have to keep thinking how we are going to monetize our product for our shareholders..." In other words, this is entirely about increasing profits for the record companies, not the artist. And before you hire the local violin players to sooth the poor record companies money-losing woes, consider that these guys, notwithstanding the bogus claims of lost profits due to file-sharing and personal copying, presently rake in billions in profit, annually.

Well, since it's inception, iTunes has turned over at least 70 percent of over a half-billion dollars to the record companies. And for the record companies, that's pure, unadulterated excess profit. The record companies have virtually no expenses whatsoever for providing the songs to iTunes since the recording masters and marketing materials were already conceived for the CD release - where the record companies still make the bulk of their money.

From CD's, to satellite radio, to online music sales, record company execs are singing the same old song: we make a ton of money from music, and now we want even more. And in the long run, it isn't about whether they can "make a case" for increasing the price (they can't), it's all about who is going to blink first. The record companies appear to operating under the pretense that their customers, the music consuming public, won't hold them accountable for anything at all. Regardless of what they do, regardless of what they charge.

Make no mistake about it. As bad as some of them where back then, these aren't your grandfather's record companies anymore. Up until about the late 70's or so, the record companies had been independently owned businesses whose execs were former musicians or record collectors who had a honest passion for music. Today, they are fewer record companies, all of them corporately owned, and they are absolutely ruthless and cold-blooded in trying to legitimize profit streams what would normally never be considered something they are the least bit entitled to.

Worse, record company management has been made up of borrowed execs from parent corporations who really don't understand the synergies of the music business very well. Not the way a musician would know them, or a record store owner, or a collector. They do know how to sell bottles of whiskey, though. And everybody knows whiskey doesn't sell at a uniform price...

For the record (no pun intended), the day I find a single iTunes song that I want selling for more than .99 is the day I know that I've already bought my last song online from the major labels. Period.

 

[maya]

I like the price drop idea.

P2P will be on the rise, and that is what the crystal-ball shows.

 

[Maestro64]

Popular songs aren't popular because they're good, they're popular because the industry spends an obscene amount of money saturating the media with them. If they were good, popstars wouldn't lose popularity after a couple of years. Heard Billy Ray Cyrus's latest album? Didn't think so.

I agree with your statement, especially if your talking abour Britney Spears, but she will not last since teenagers do grow up and realize what good music is.

Most good and great bands/musicians stand the test of time and people will seek out their music no matter what. People learn about them when they show up in their town for a show. All bands will tell you they make the most amount of money doing a show then selling an album.

I have said it before, you will see more and more bands after they become popular go right to the net to sell their music directly to you and getting rid of the record labels.