duhliterate said:
$.75 ? ? ?
I can't see that...ever...at iTMS.
Steve seems committed to artists...(ask Madge etc...)
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Apple vs Music Industry on Song Pricing
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$.75 ? ? ?
I can't see that...ever...at iTMS.
Steve seems committed to artists...(ask Madge etc...)
duhliterate said:
Actually, please do, it's so easy to get OT with topics like these...
duhliterate said:
Yes, you're absolutely correct, but keep in mind that Apple needs to make money as well, or else iTMS wouldn't survive. If they cut the prices much, it would just end up eating into their already-small profits. So, like it or not, and even though the record companies are taking the largest cut from iTMS, I'm afraid it has to remain this way for iTMS to keep its head above water. And at the end of the day, it is such an amazing service, I'm willing to pay $0.99 even though I wish more of it was going towards Apple rather than the record companies...
I think if prices dropped, Apple would suffer, not the record companies, which would just make the situation worse in my opinion. 
99 cents still seems to be a sweet spot where everyone can still make a profit and the consumer is still provided an affordable price. I would rather pay less but who wouldn't. I agree that the music industry just can not grasp the concept. Over 500 million dnlds and they still can not get it. Volume is iTMS strength. If the price does up I go back to P2P. Its a no brainer. I hate record companies anyways, they remind me of dinosaurs and I like the idea of an iTunes Record Label. Cut out the middle man.
speaking of iTMS, whenever i try to access it through iTunes now, the whole program "quits unexpectedly". Ive tried restarting and it still happens. Whats wrong with iTMS? is it down? what do i do?
shamino said:
That's it. For the first time in their history they have to pay their artists what is exactly due to the artist. With Apple and iTune for the first time the artist know exactly how many songs they are selling a month and get their royaltie accordingly, and the Majors don't like that.
whose product is it?
First,
Doesn't the product "belong" to RIAA and the artists? Why shouldn't they get to have a say in the pricing model. Surely they are going to price for maximum return, some may be cheaper, all of it may be more expensive. Just because it is selling at the dollar store who cares?
And secondly, at .99 a piece, this possible consumer thinks that price is too high, and I have never purchased a single song from the apple store. All of my music is personal CD rips.
Finally, when will the government stop subsidizing the blind at such a high rate. This is keeping Audio books at a rediculously high price rather than market priced. I *would* buy audio books if they were about a third or less of what they cost now.
First,
Doesn't the product "belong" to RIAA and the artists? Why shouldn't they get to have a say in the pricing model. Surely they are going to price for maximum return, some may be cheaper, all of it may be more expensive. Just because it is selling at the dollar store who cares?
And secondly, at .99 a piece, this possible consumer thinks that price is too high, and I have never purchased a single song from the apple store. All of my music is personal CD rips.
Finally, when will the government stop subsidizing the blind at such a high rate. This is keeping Audio books at a rediculously high price rather than market priced. I *would* buy audio books if they were about a third or less of what they cost now.
I hope you someday become world famous for a book, or song or software title, and you never see a penny of income from it because millions of college kids are trading it on the internet using your arguments.Sdashiki said:
from the vaults of mp3.com
I have been reading MR for a while, and never mentioned this, i think.
I am/was "Tripping in the Fall". 1999-2002, I was on mp3.com and did fairly well as a nonTop40 electronic artist. I produced 150 or so tracks, and made $6500 in ad revenue from mp3.com's artist p4p system. That was from around 200,000 downloads.
Mp3.com is now a commercial site, but it used to be fairgame for anyone with music to upload.
That said, I think 99 cents should be industry standard for a song.
To justify more, they need to offer lossless format downloads.
They probably have finally realized that there are no more Led Zepplin IV's out there. Most albums that have two or more singles successful are the cream of the crop. And they assume that they couldve sold you a 18 dollar cd for those two songs, or you spend 2 bucks on iTunes. Their actual revenue and profit may be very similar dollar for dollar - but it represents a shift in the industry. A shift away from album based sales, puts more pressure on them to release material on a more regular basis and removes some of their control over the content - i.e. they cant expect filler to do as well as gold nugget singles do, and don't want any lossleaders.
Sony BMG and all the rest need to suck up and enjoy that there is still A revenue stream for music left. A great deal of money is made from using music in commercials and movies and telelvision shows. Ringtones are ridiculuously overpriced at 1.99 each for 64kps mono 20 second clips. The market for CDs is dying out, but still a large amount of cash.
Yes, there are costs behind making music. I spent all, with the exception of a months rent, of my money back on my music. No cribs, no rides. Most bands lose money the entire time they are touring and promoting, trying to get signed... I smartly didnt promote IRL, but online for FREE.
Signed major label artists have contracts that make THEM pay for recording, producers and probably even mastering. They BORROW the money they get against future sales. They BORROW money to get those cribs and rides, so they look good on MTV and get more sales. Contracts continue to get more and more intensively designed against the musician, who must sell a gold or even platinum album in some cases, to complete the contract. If you do well, they want to own you. If you flop once, they disown you == and you have a lot of bills to cover.
Its easier to be in the NFL or NBA than to end up a sign major act. Touring is also something that the artist is responsible for... see TLC, who lost 2 million on a tour and had to declare bankruptcy.
Step up and form a line for the Surreal Life 7!
$
I have been reading MR for a while, and never mentioned this, i think.
I am/was "Tripping in the Fall". 1999-2002, I was on mp3.com and did fairly well as a nonTop40 electronic artist. I produced 150 or so tracks, and made $6500 in ad revenue from mp3.com's artist p4p system. That was from around 200,000 downloads.
Mp3.com is now a commercial site, but it used to be fairgame for anyone with music to upload.
That said, I think 99 cents should be industry standard for a song.
To justify more, they need to offer lossless format downloads.
They probably have finally realized that there are no more Led Zepplin IV's out there. Most albums that have two or more singles successful are the cream of the crop. And they assume that they couldve sold you a 18 dollar cd for those two songs, or you spend 2 bucks on iTunes. Their actual revenue and profit may be very similar dollar for dollar - but it represents a shift in the industry. A shift away from album based sales, puts more pressure on them to release material on a more regular basis and removes some of their control over the content - i.e. they cant expect filler to do as well as gold nugget singles do, and don't want any lossleaders.
Sony BMG and all the rest need to suck up and enjoy that there is still A revenue stream for music left. A great deal of money is made from using music in commercials and movies and telelvision shows. Ringtones are ridiculuously overpriced at 1.99 each for 64kps mono 20 second clips. The market for CDs is dying out, but still a large amount of cash.
Yes, there are costs behind making music. I spent all, with the exception of a months rent, of my money back on my music. No cribs, no rides. Most bands lose money the entire time they are touring and promoting, trying to get signed... I smartly didnt promote IRL, but online for FREE.
Signed major label artists have contracts that make THEM pay for recording, producers and probably even mastering. They BORROW the money they get against future sales. They BORROW money to get those cribs and rides, so they look good on MTV and get more sales. Contracts continue to get more and more intensively designed against the musician, who must sell a gold or even platinum album in some cases, to complete the contract. If you do well, they want to own you. If you flop once, they disown you == and you have a lot of bills to cover.
Its easier to be in the NFL or NBA than to end up a sign major act. Touring is also something that the artist is responsible for... see TLC, who lost 2 million on a tour and had to declare bankruptcy.
Step up and form a line for the Surreal Life 7!
$
That's called Price Elasticity
It's always nice to see someone discover basic Economics 101 theory.
If only the Record Label Execs would pick up an economics book: aprox. 25 dollars in cost.
Price Elasticity means the labels are losing ZERO DOLLARS at 99 cents per song. They are selling more, and growing the market, which will allow them to sell more.
This is a scary window into the decision making of CEO's in America.
onemoof said:
It's always nice to see someone discover basic Economics 101 theory.
If only the Record Label Execs would pick up an economics book: aprox. 25 dollars in cost.
Price Elasticity means the labels are losing ZERO DOLLARS at 99 cents per song. They are selling more, and growing the market, which will allow them to sell more.
This is a scary window into the decision making of CEO's in America.
I don't have an automatic objection to tiered pricing. Why shouldn't the price be based on supply and demand? Although I like the simple "one price fits all" model Apple has used, it makes sense to me that HBO costs more than MTV and that books by top authors (ignoring loss leader sales) command higher prices than books by lesser-knowns, so why not digital music?
After all, some songs are worth more to us than others. Even though the value of a given song varies from person to person, in the aggregate recent songs and songs by top artists could be sold for higher prices, and some tunes languish in the iTunes Music Store at 99 cents while bargain prices could better move the (digital) merchandise.
Whichever way they price the music, I'd still buy from the iTMS, and I would continue to weigh the price against what it's worth to me.
In theory, tiered pricing could mean that songs change from 99 cents to at least 99 cents, that they change to at most 99 cents, or that they continue to average 99 cents over all sales.
Words like "greedy" made indeed apply to the records labels, and artists may be shortchanged, but I'd like to hear from an economist about how Apple's situation compares to pricing models in other industries. And I wonder if there are any comparable industries!
After all, some songs are worth more to us than others. Even though the value of a given song varies from person to person, in the aggregate recent songs and songs by top artists could be sold for higher prices, and some tunes languish in the iTunes Music Store at 99 cents while bargain prices could better move the (digital) merchandise.
Whichever way they price the music, I'd still buy from the iTMS, and I would continue to weigh the price against what it's worth to me.
In theory, tiered pricing could mean that songs change from 99 cents to at least 99 cents, that they change to at most 99 cents, or that they continue to average 99 cents over all sales.
Words like "greedy" made indeed apply to the records labels, and artists may be shortchanged, but I'd like to hear from an economist about how Apple's situation compares to pricing models in other industries. And I wonder if there are any comparable industries!
Doctor Q said:
Someone else in the thread said that having tiered or otherwise variable pricing is an invitation to start being greedy. Perhaps songs will still average 99 cents to start, but slowly you'll see that go to $1.09, $1.19, etc. To some extent that's expected due to inflation, but I fear (as many do) that the industry will start taking advantage.
Look at the variable-pricing structure of gas prices. You can't tell me that the ACTUAL COST of gas varies and jumps as much as the prices do at the pumps, particularly considering the long time it takes for a purchase of raw crude to become gasoline.
Compare that, with, say, a dollar store, where everything in the store is (ostensibly) priced at $1. Some items are cheaper and you get 2/$1 or 3/$1. Unfortunately I've been seeing more dollar stores that get a little liberal with the name and I've seen items for $3, $5, even $20 (!) - and at that point I feel you can't really call it a dollar store anymore.
As someone says, if I go see "Serenity" tonight or if I choose to see a turd, I pay the same $10 for the movie ticket. If I rent a movie at Blockbuster I pay the same $4.99 whether it's Ishtar or Lord of the Rings.
Actually, I can provide counter-example by pointing out that at Blockbuster, you pay more for new-release rentals than for the older ones -- perhaps that model would be a compromise. A two-tier, fixed-price model, where say new releases are $1.29 and older songs are $.59 or $.79. But that still opens it up to price-increase-creep (there's something aesthetic about 99 cents), and open to abuse by calling Backstreet Boys a "new release", etc.
Doctor Q said:
Some songs are worth more to just some people.
Avril at 1 dollar is worth a try.
Avril at 2 dollars will be passed up by me.
Of course, the labels could attempt to take a Band's most loyal fanatic fans for a bath, and charge 10 dollars per song, and then 11 and 12 and so on. However, buyers will still drop out at every price tier.
The labels are missing the accounting of their back cataog. They are selling more of the most popular music, and also selling more of their back catalog.
Remember, it's only a joke in the current discussion that they will actually sell ANY music at 29 cents. They really only want to raise prices on their most popular music. But, again, they aren't losing Any Money, they are just increasing sales.
And that's not a bad thing.
Additional note:
I wonder how the Bands would feel about their product being priced out of reach of their fans? Sounds like an undesirable side effect to me.
nimbus said:All you people saying "IT'S STEALING" need to leave the U.S....NOW. America was STOLEN from the Native Americans. OMG, YOU'RE ON STOLEN LAND!!!
[expletive deleted] I'm trying to download the latest Madonna album here...sheesh.
Still doesn't make it right.
Apple is the Retailer...
Actually, another point here is that Apple is the Retailer, and therefore, Apple should have control of it's retail pricing.
Or, do the Labels have control of pricing at HMV and other CD stores???
Are we seeing a sleazy side of the recording industry here?
notjustjay said:
Actually, another point here is that Apple is the Retailer, and therefore, Apple should have control of it's retail pricing.
Or, do the Labels have control of pricing at HMV and other CD stores???
Are we seeing a sleazy side of the recording industry here?
you know the record companies are just being greedy and here's how: jobs made something work that the record companies were complete failures at. and by complete, i mean so stupid that they didn't even think of anything. they need to stop thinking about how to make money in their traditional channels, which obviously aren't growing. the iTMS and online sales are a new channel that they've shown they know nothing about. it doesn't operate quite like the traditional channels. but they still want to push their traditional channel money making solutions in this new channel. which is ridiculous on many levels because their solutions for their traditional channels have effectively run their traditional channels into the ground.
some songs are worth more than others, this is true. but one problem, among many others, with tiered pricing, is the sheer volume of songs. are you going to price each one? if so, how are you going to decide what the market is for a non-single album track by herman's hermits, so you can price it appropriately? and what if that song gets used in a movie and turns out to chart in 2006. to be consistent you'll raise the price for a while.
i could see the development of some kind of model that gauges songs by how many times they've been sold and automatically prices them that way, so that the average price on the iTMS is 99 cents. but i'm pretty sure apple doesn't want to create such a model. that's a little ridiculous, and you'd have constantly fluctuating prices on songs. and what of the many many indie labels on the iTMS? if there's flexible pricing, and major labels want lower than 99 cents prices on their less popular stuff, that stuff might still sell as much or more than some indie labels' most popular stuff. so will the iTMS lower the prices on those indie labels' albums and songs, so their prices are commensurate to sales just as the majors are, in effect screwing the indies? no. and i don't really think that's what the majors want. they don't particularly want anything lower than 99 cents. they want most things to be 99 cents, and anything that's already popular, or anything that they're pushing hard via advertising and radio to be much much more expensive. this is the only way it would work to their advantage. the cast majority of music is NOT popular.
some songs are worth more than others, this is true. but one problem, among many others, with tiered pricing, is the sheer volume of songs. are you going to price each one? if so, how are you going to decide what the market is for a non-single album track by herman's hermits, so you can price it appropriately? and what if that song gets used in a movie and turns out to chart in 2006. to be consistent you'll raise the price for a while.
i could see the development of some kind of model that gauges songs by how many times they've been sold and automatically prices them that way, so that the average price on the iTMS is 99 cents. but i'm pretty sure apple doesn't want to create such a model. that's a little ridiculous, and you'd have constantly fluctuating prices on songs. and what of the many many indie labels on the iTMS? if there's flexible pricing, and major labels want lower than 99 cents prices on their less popular stuff, that stuff might still sell as much or more than some indie labels' most popular stuff. so will the iTMS lower the prices on those indie labels' albums and songs, so their prices are commensurate to sales just as the majors are, in effect screwing the indies? no. and i don't really think that's what the majors want. they don't particularly want anything lower than 99 cents. they want most things to be 99 cents, and anything that's already popular, or anything that they're pushing hard via advertising and radio to be much much more expensive. this is the only way it would work to their advantage. the cast majority of music is NOT popular.
Changing the subject slightly...
Apple is in a position to negotiate with the big record execs because Apple has developed the most successful means of legal music distribution since the CD replaced the cassette.
To solidify that position, Apple has moved aggressively to keep the iPod (and through it iTunes) massively popular. At the moment this popularity is based on the fact that the iPod boasts industry-leading design and good feature content, and the iTMS has a sufficiently large library with an attractive pricing structure.
But how stable is this? Will the iPod bubble burst (as most people are expecting) eventually, or will Apple consolidate it's lead and establish it like M$ did with the Wintel platform?
As long as the iPod reigns supreme Steve will be able to swing heavy when battling the recording industry. But the recording industry wants iTunes, or rather they want a recording industry-owned and controlled iTunes and iPod combo. Call it the antiPod and antiTunes.
I like the current price structure, and totally disagree with Bronfman's argument - all that his structure encourages is higher profit for "hot" artists, or rather, their managers, studio execs and distributors.
Apple is in a position to negotiate with the big record execs because Apple has developed the most successful means of legal music distribution since the CD replaced the cassette.
To solidify that position, Apple has moved aggressively to keep the iPod (and through it iTunes) massively popular. At the moment this popularity is based on the fact that the iPod boasts industry-leading design and good feature content, and the iTMS has a sufficiently large library with an attractive pricing structure.
But how stable is this? Will the iPod bubble burst (as most people are expecting) eventually, or will Apple consolidate it's lead and establish it like M$ did with the Wintel platform?
As long as the iPod reigns supreme Steve will be able to swing heavy when battling the recording industry. But the recording industry wants iTunes, or rather they want a recording industry-owned and controlled iTunes and iPod combo. Call it the antiPod and antiTunes.
I like the current price structure, and totally disagree with Bronfman's argument - all that his structure encourages is higher profit for "hot" artists, or rather, their managers, studio execs and distributors.
Steve's Reality Distortion field seems to be ineffective against the overwelming greed of the evil Mr. Bronfan
This just proves a point that Steve has a clear vision of the future, and once he has made his mind, hell to anyone else who opposes him. I say trust him, look at how far he has brough apple so far.
This just proves a point that Steve has a clear vision of the future, and once he has made his mind, hell to anyone else who opposes him. I say trust him, look at how far he has brough apple so far.
slu said:
I've been a musician off and on for 11 years (unless symphonic band counts, then its 18
)Making megabucks isn't the incentive; and if it is *cough cough metallica, britney, eminem* then you can rot.
Making music is its own incentive; most artists don't make the cash anyway. They enjoy creating, performing, or the celebrity. Frankly, I'd be tickled if the entire media empire collapsed and most all music was homemade and either self distributed or direct to a service like ITMS.
I don't need radio, the RIAA, and MTV to tell me what I like or what is cool. Rip the system.
mkaake said:
Re: mix tapes:
Those were fair use, and blank cassettes had a tax wrapped up in their costs because of the possibility.
Hold On A Second...
Wasn't that guy from Warner the guy who said that they could pull the plug on the iTMS anytime? I'm pretty sure a record exec said that digital downloads make up an incredibly small amount of their profits (In fact, they make more revenue from cellphone ringtones!). If that is the case, why are they so upset about 99¢ pricing? It seems kinda contradictory to me. Besides that, digital downloads are pure profit for the record companies. I mean, they don't have to distribute, market, or print the media and Apple has to pay for all the bandwidth and advertising, don't they?
I guess these record companies got tired of just screwing artists and wanted to start screwing the fans and consumers (even more!)
Wasn't that guy from Warner the guy who said that they could pull the plug on the iTMS anytime? I'm pretty sure a record exec said that digital downloads make up an incredibly small amount of their profits (In fact, they make more revenue from cellphone ringtones!). If that is the case, why are they so upset about 99¢ pricing? It seems kinda contradictory to me. Besides that, digital downloads are pure profit for the record companies. I mean, they don't have to distribute, market, or print the media and Apple has to pay for all the bandwidth and advertising, don't they?
I guess these record companies got tired of just screwing artists and wanted to start screwing the fans and consumers (even more!)
MikeAtari said:
Exactly. And for me, Avril is worth $0.00, whereas Tower of Power is worth possibly $2.00. What one person puts value in, another does not, and music, being so personal and subjective, does not lend itself to this type of pricing in my opinion.
The only thing that would get me to change my mind would be if all the Pop songs/Top 50 etc. cost more because they're "popular" (and the majority of the time I don't listen to what the masses listen to as a lot of it is mindless crap IMO), and if more alternative, "no-name" bands and such (which I like) were discounted. Then I might be inclined to change my opinion.