Apple's Ongoing iTunes Negotiations

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The New York Post is reporting that the record industry may be on the verge of conceding to Apple's demands that iTunes song pricing model remains constant at $.99 per song.

But Jobs has dug in his heels on the issue, creating the potential for a showdown between the mercurial Apple boss and the record industry should the labels continue to push for variable pricing.
Apple's current contracts with the record labels expire in the next two months. The NY Post reports that some labels could go as far as to pull their songs from the iTunes Music Store -- however, a more likely scenario described is that the companies will continue to provide their songs but without a contract in place.

"That would be problematic for Apple because it allows labels on a whim to pull their stuff whenever they want," said one high-level music executive.
These discussions have been an ongoing point of contention between Apple and the record labels.
 

EricNau

Moderator emeritus
Apr 27, 2005
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San Francisco, CA
It is very important that Apple keep every song at $.99.

I wish these darn record labels would stop being so greedy. When iTunes first came out, they saw Apple as their savior against pirates. iTunes has sold 1 billion songs since then, so that's 1 billion songs not pirated.

They should bow down to Apple!
 

Spanky Deluxe

macrumors 601
Mar 17, 2005
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London, UK
The whole 99c thing is fantastic. The constant price means you always know how much you're going to have to pay. Its kind of ridiculous when you see some singles for sale in high street shops that have two tracks and sell for £3.99. Absolutely mad.
 

EricNau

Moderator emeritus
Apr 27, 2005
10,657
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San Francisco, CA
I really doubt any (major) record label would go as far as to pull their songs from iTunes. While they may not be able to control what iTunes is charging, they are still making plenty of money from each song sold.
If they pulled any songs, they would not be able to make up all of those sales in CDs or from another online service, people just wouldn't buy as much (people are lazy; they'll either just listen to it on the radio or pirate it).
 

Veritas&Equitas

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Oct 31, 2005
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I'll have to admit, as much as I love the $.99 thing that the Music Store does have going for it, the music industry DOES have a point. Since when do retailers tell the suppliers what they will be paying for goods? It seems a little backwards to me, not that I'm complaining, b/c I hate record companies just as much as the next guy...but it does make some sense....
 

gugy

macrumors 68040
Jan 31, 2005
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La Jolla, CA
Good for you Steve!

Keep those bastards in their place.

If the Itunes raise their prices the piracy will just go up.

It's unbelievable. CDs should cost US$7 by now. Not $18 or more. And they don't understand why people go into piracy.:mad:
 

Baseline

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Apr 9, 2002
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Southern Ontario
Veritas&Equitas said:
I'll have to admit, as much as I love the $.99 thing that the Music Store does have going for it, the music industry DOES have a point. Since when do retailers tell the suppliers what they will be paying for goods? It seems a little backwards to me, not that I'm complaining, b/c I hate record companies just as much as the next guy...but it does make some sense....

Well, I always hear stories about Wal-Mart telling the suppliers what they'll be paying for the goods. Not that I advocate following Wal-Mart's lead in anything, but there is precedent for it.
 

sethypoo

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Oct 8, 2003
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I think the record companies should be happy with what they've got. Don't look a gift horse in the mouth, as you might say. Apple has done more for them in the past three years than all their high paid executives could have done in 25 combined.

I mean, sure, they could make even more money if they raised the song prices, but I think they'd lose a lot of business if they did so. .99 has a better ring to it than 1.99.
 

syklee26

macrumors 6502
Jul 26, 2005
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tsk tsk tsk

The biggest problem with these label company's desire to have multi-tier pricing scheme is the fact that most of the songs will be over 99c while only a few songs would go under 99 (such as songs in those 99c per CD bin in Tower Record and places like that).

this in essence is NOT a multi-tier pricing system. it's more like a single-tier pricing system with some "promo-type" discounts of really crappy old songs.

and these labels don't realize the fact that Apple can still sell a lot of iPods without some of the songs on iTunes. Probably not as much as Apple could but still a good number. However, with downloads almost equaling (maybe more than) CD sales, the lost revenue by pulling their catalog from iTunes would be significant.

I am not an Apple apologist but Label's demands are absurd.

once their negotiation with Apple fails, I can certainly see that they will file to seek a declaratory judgment in some court that importing songs from CD to computer for a purpose of using them in mp3 players is violation of copyright protection.
 

Rocketman

macrumors 603
The ANSWER

Hello.

1. FIXED pricing for now means $0.99 but that may not stay the same in the future. How much do you want to bet the NEW contracts specify FIXED prices but not WHAT prices?

2. When you sell old/new/good/bad songs at a FIXED price it levels the playing field such that POPULAR songs make bigger revenue on the MERITS.

3. The delivery cost has been reduced to zero from the record label's perspective.

4. Having "value added songs" at a high price are still possible. Make an "album" with ONE or TWO songs. Make a distribution NOT using iTunes at all. Just a suggestion. iTunes is, in theory, only ONE outlet. ONE. Why does anyone care what policies ONE outlet has?

Oh, wait, it has 87% market share. If it ain't broke DON'T FIX IT!!

Do we now regret dissolving/splitting the OIL companies or the PHONE companies?? Yes.

$0.99 and 10% APPLE profit or $1.29 and 20%+ APPLE profit. Hmmm.

Buy stock.

Rocketman
 

Electro Funk

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Dec 8, 2005
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Baseline said:
Well, I always hear stories about Wal-Mart telling the suppliers what they'll be paying for the goods. Not that I advocate following Wal-Mart's lead in anything, but there is precedent for it.
you beat me to it... Wal-Mart does do this... in fact because of this rubbermaid (who was once based in a small town in Ohio) had to close up shop and move overseas to be able to produce products within the price range that walmart wanted to pay... (Wal-Mart was an exclusive distributor of rubbermaid back in the day... rubbermaid sold product through no one else)
 

BornAgainMac

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Feb 4, 2004
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I have a proposal. For 1 month, let the record companies select the pricing model. Then compare it to the current pricing model that Apple has in place. Whatever makes more profit wins. Record companies will receive a valuable lesson in the process.

The plan will be communicated to all the iTunes customers when the experiment will begin and that it will determine future pricing.
 

coumerelli

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Apr 7, 2003
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state of confusion.
sethypoo said:
...I mean, sure, they could make even more money if they raised the song prices, but I think they'd lose a lot of business if they did so. .99 has a better ring to it than 1.99.
Or even $1.29 - not that I want to see it, but THAT number makes WAY more sense as a next step than 2x the current price!!!
 

mi5moav

macrumors regular
Mar 12, 2004
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0
What I can see is that the record labels may raise the rates to steve on some of there older songs. Steve is right, psychologicaly .99 cents is a very important barrier. Once I get to $1.00 I almost feel like I need a physical product in my hand. 1.00 is paper .99 is and will always be change. I can always find a bunch of it in my couch... but finding a nice buck is hard to do.
 

WillMak

macrumors 6502a
Jul 29, 2005
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would anyone here support a 1.00 per song pricing if they changed the 128kbit to 192?
 

MrCrowbar

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Jan 12, 2006
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1.29$ per song?
I'm tempted to rate this post negative (what does rating mean anyway? If I believe the rumor (yes/no) or if I like the rumor (yes/no)? )...

I'd rather get the real album on Amazon for that price, at least it's CD-quality and not (sorry) compressed. I'm an audiophile (therefore not considering an iPod HIFI ^^) and want the real thing. Actually, I'd love to have 48kHz 24bit Audio Discs because the dynamics are way better for classical music or jazz. 44.1kHz 16 bit is really the lowest limit.

I only use iTunes for previewing Albums and usually get the real thing on Amazon or eBay. Sorry.
 
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