In the keynote they said there will be more songs lowered to $0.69 than songs increased to $1.29.
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iTunes Store Variable Pricing to Begin April 7th?
- Thread starter Lesser Evets
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In the keynote they said there will be more songs lowered to $0.69 than songs increased to $1.29.
Are you seriously telling me the coke and pepsi are the same? I understand that in general the product is the same, but the taste is very different. You may as well say all beers are the same.
BTW- infinite is in quotes for a reason...
Because it's not April 1st yet?
And they did NOT say by April 1st, they said the change was coming in April.
Less than 25 cents a disc. I'm sure it warms your heart to know that.
Depending on the genre it can be a LOT cheaper. Acoustic instruments, as opposed to electronic, still need a good recording space but the advent of NLE systems has reduced the expenditure of building a studio from the millions to the thousands, and consequently even well-equipped studios have had to reduce rates to compete with home-built studios. Granted, albums today are not recorded with the care they were 20 or 30 years ago, but if you had to go to, say, Paisley Park, Studio A would run you $150 an hour versus $350 an hour in 1992.
The key question is what is "popular"
Say a song was selling 1,000 copies a day...is then mentioned on an MTV show and now is selling 8,000 copies a day...in the grand scheme of things..its still an unknown...but it is now more popular...so would the price simply jump because the demand is jumping? If so..that is messed up.
Say a song was selling 1,000 copies a day...is then mentioned on an MTV show and now is selling 8,000 copies a day...in the grand scheme of things..its still an unknown...but it is now more popular...so would the price simply jump because the demand is jumping? If so..that is messed up.
Again, supply is factor. The supply is not the downloaded file, but the music itself. And again, just because you can easily and cheaply duplicate something doesn't mean the original did not have a cost and it doesn't mean the duplicates do not have value to a consumer.
It has been working like this since the dawn of recorded music. As long as a piece of recorded music sells, the company that holds the rights will duplicate it endlessly.
In fact, supply is very limited in the case of recorded music. There is only one recording of that performance of a song by that artist. And there is no real replacement product for that song. Nobody has bought one song instead of another song because they are "close enough". Either you like the song enough to buy it at the price it is offered or you don't. Supply doesn't get more constrained than that.
I wonder if this will be a big effect or not. I've already been shopping a lot more at Amazon lately because of their daily MP3 deal, which usually has a selected album on sale for just $1.99. It's usually something I have zero interest in (like today's selection), but there's enough stuff that I either really like (incredible deal) or just hits the threshold of what I'd be willing to pay at $2 that I check it every day. They also have 5 albums for $5 every Friday, and hundreds of free singles (most junk, but I've found a few gems). Over the past 3 months, I've gotten 8 great albums for a total of $21 this way. 160 songs and more than 21 hours of music (the best deal by far was the 99-piece Beethoven compilation for just $2; even at regular price of $8 it's a real steal!).
Err, I didn't mean to rave quite so much about Amazon.
But it will definitely be interesting to see if the pricing changes at iTunes will start to push any more customers towards Amazon's store.Please don't steal music.
megfilmworks is absolutely right about perspective. Considering inflation, music as a product has never been cheaper:----
A lot of people are saying this. A lot of people have short memories.
Phil Schiller at MWSF said And in April, based on what the music labels charge Apple, songs on iTunes will be available at one of three price points69 cents, 99 cents and $1.29with many more songs priced at 69 cents than $1.29.I would. I have several hundred albums on my wishlist at Amazon. Many I consider very high priority because I know the music is excellent. But I also know that money doesn't grow on trees, so I either wait for deals (like Amazon's MP3 deals), or hope that other people buy them for me as gifts. So far it seems like the list grows faster than it shrinks due to purchases...
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I agree. Take your money elsewhere if you don't want to pay the higher price. Regardless of whether iTunes bumps prices, I'll be shopping elsewhere. There are already sites out there selling cheaper than $.99.
Don't get me wrong. I still love Apple products ... I'm just not supporting iTunes' pricing.
This is exatly why newsgroups and torrent site will keep flourishing. $20 for HD downloads? 15$ for barely DVD quality, and $1.29 for a 2 MB file lol.
Whose really stealing here?
I understand fully what you're saying, and I think my point was not so much that you'll have absolute control over retail pricing.
However, I consider you're still getting a better deal. Why? Well, Apple is bearing most of the promotion and distribution costs of your album outside of tours... and tour support hasn't been paid by majors or indies in the conventional distro paradigm since the late 1970's, so you'd bear that cost either way.
The other part of this is... if you were smart and recorded your album on the cheap, you have only those costs and not, say, a $50,000 recording advance to recoup.
Well, let's compare that...
Under the old paradigm if your album retails for $7.99, packaging, distribution and the "free goods" factor (allowing for promotional copies to radio PD's etc.) is going to cost about $1.9975 per. Retail margin is $5.99, they take about 20% of that, about $1.1985 per. Leaving $4.794 as gross margin.
Gross margin is what royalty is computed off, and as an artist with an independent label with major distribution (UNI, WEA, etc.) to give you access to a market as large as iTunes, you'd probably collect about 7%. That's about 33.558 cents per album.
At that rate you would need to sell 148,995 copies to repay the $50,000 advance the record company gave you. Until you do, you don't get to keep a single dime of royalties. If you, like most artists, spent the entire advance, this means there's a good chance you'll be broke... because in that world 85% of the recording artists signed to major labels alone (nevermind indies) do not sell enough albums to break even on their recording advance.
Now, compare that to your situation. If you do sell 148,995 albums, you're going to take home $104,297 Even if you blew $50,000 on recording (which isn't at all what it would cost you today if you know how to budget), you'd still walk home $54,297 richer than the same artist signed to Warner Bros.
CORRECTION: I read your post incorrectly. You said 70 cents per song, not album. Per album, you said $7 is yours to keep... That's $1,042,965! (given my earlier example of selling 148,995 units just to break even on a $50,000 advance were you signed to a major or minor).
Even if you spend $43,000 recording that album, you're still a millionaire. Put it another way... If you wanted to spend $50,000 on an album to record for iTunes, you'd need only sell 7143 copies to break even, versus 148,995. That's not just a good deal. That's a stellar deal.
Note also that the old paradigm didn't let you set the pricing either. It's always finally determined by the retail chain because MSRP is only that. Excluding illegal activity of collusion (of which there certainly has been some), the record label cannot dictate by force what retail price must be as long as they receive gross margin plus packaging. Competition between the retail chains is what keeps pricing generally very close.
Still think you're getting a rotten deal? Unless you own the store, or have incredible revenue generating power, you won't be able to control price... So if you want total control over retail pricing, start your own website. You couldn't do that twenty years ago (mainly because the WWW didn't exist in any graphically browsable form yet).
I think it's not necessarily a fair deal, but how much more you want in "fairness" depends on equal benefit. I can tell you that if you're only selling 150,000 copies, in terms of the percentage of their bottom line versus the percentage of your bottom line, you're more dependent on them for income than the other way around. Another way of looking at that is... relative to your respective incomes, you're benefitting more from the arrangement than they are.
I don't think, though, that you're trying to argue that you ought to be able to dictate pricing to them. It's a tradeoff, because for you to start your own site means you will bear all the marketing costs, distribution costs (however small), promotion costs, etc. That may or may not work to your advantage, but being a financial analyst (not the kind that sells financial products; I analyze and forecast sales and revenue of my employer) I would certainly suggest running the numbers to determine which of these two is a better deal.
Precisely. There may be a thousand different versions of "All Along the Watchtower", originally written by Bob Dylan (well, originally written by the powers that be if you watch Battlestar Galactica
), but I bet you dollars to doughnuts anyone looking for the Jimi Hendrix version isn't going to settle for the Barney the Dinosaur version.
*scanning the room for the line to PirateBay*
Ahh....there it is...
*walks over and stands in line*
Ahh....there it is...
*walks over and stands in line*
Ok, perhaps a slightly bad choice of words... Replace "absolutely" with "reasonably" or "generally". My point was that despite this, there is a brand perception that plays into it. Sure, some of it owes to the fact that some people don't like the taste of one versus the other.
But there are generics too that are reasonably close enough to one or the other... but they don't have nearly the sales because they haven't created the brand perception.
In that regard, do you think that either Coke or Pepsi have stopped advertising? Hell no. They put HUGE money into beefing up their brand perception. This plays so much of a part that one of the biggest mistakes ever made in corporate marketing revolved around taste versus perception.
In the 1980s, Coke reacted to market data that showed Pepsi's sales increasing and introduced New Coke to compete with Pepsi's edge against the red giant. This proved to be an utter failure. Coca-Cola's mistake? It wasn't the taste of Pepsi that people preferred. Pepsi simply had increased their advertising and marketing budgets threefold, launched the Pepsi challenge (which was largely rigged... whichever one you said tasted better, the attendant would pull out a pepsi bottle and say that was it). So in this case, a HUGELY popular brand imploded itself by assuming that actual taste was a bigger factor than perception created by marketing and advertising.
They then relied again on marketing and advertising to reinvigorate the brand by reintroducing the old formula as "Coke Classic." Not one shred of difference between the original Coca-Cola and Coke Classic, but sales surged as a result of this marketing campaign and Coca-Cola was once again on top without having done a thing to actually improve their product.
You can also look at examples like the Plymouth Laser, Mitsubishi Eclipse and Eagle Talon. Three cars? No. One car, three badges. But the Mitsubishi Eclipse commanded the highest price of the three because of the brand perception of Mitsubishi at a time when foreign brands were gaining in popularity due to customer perceptions about quality and reliability. The cars in fact rolled off the same assembly line with the same parts.
If by "very few", you mean NONE, then yeah!
That remains to be seen. If that were the case, I'm not sure why Phil Schiller would promise that there would be more tracks at 69 than 1.29 and end up looking like a fool.
I'm really curious how many there will be at each price. I'm also curious once this happens, if there really are far more at 69 and 99 than 1.29, how many of the cynics will actually come back here and admit they were wrong.
You're still talking about demand ... not supply. No one is saying that the original had no cost or that duplicates have no value to a consumer. I believe that an artist should be paid for every copy distributed. In this case, however, supply IS the distribution of a digital file and it is not a price-changing factor. Supply affects a price if it changes. When supply increases, the price decreases. When supply decreases, the price increases, ceteris paribus. Since iTunes can just as easily distribute one song from the next, there is no differentiation in price based off of supply. iTunes is basing their pricing of of the demand (or popularity) of a particular song (greater demand = higher price). Therefore supply is not a factor.
The flip side to this is that price also affects demand. If iTunes increases their prices, wise consumers will go elsewhere to buy at a lower price. If consumers are not willing to buy at a higher price level, iTunes will be forced to sell at a lower price.
So which generic tastes just like Coke or Pepsi?
And you have a source on the taste test being rigged?
under $800 for the Dell Core i7....
http://www.dell.com/content/product...tudioxps-435mt?c=us&cs=19&l=en&ref=dthp&s=dhs
Attachments
Unless you're like me and you listen to obscure underground bands that only iTunes has. Yeah, I guess if you want the trendy crap like Lady Gaga or M.I.A., then sure, Amazon...but Amazon doesn't have s**t as far as my music is concerned.
Precisely. There may be a thousand different versions of "All Along the Watchtower", originally written by Bob Dylan (well, originally written by the powers that be if you watch Battlestar Galactica
Which recalls my definition of hell - infinite repetitions of "Light My Fire" by Jose Feliciano (and knowing what you're missing).
I really love how people don't seem to understand how this works. It is not Apple deciding to raise the prices. Apple most likely won't see any increase in revenue because of this, if anything they will see a loss. This is the record companies again trying to break Apple's hold on the market. The record companies detest that Apple has become the largest retailer for music and has the gall to tell record companies how much they can charge for songs. Every single person who has ran to Amazon to buy their music is directly responsible for this increase.
The record companies have forced this by offering DRM free music to Apple's competitors while withholding it from Apple, or when they did provide DRM free music to Apple require a surcharge for it. Do people honestly think Amazon had enough pull to force the music companies to give them DRM free content that they could sell at 30 cents less than Apple? in the world of retail the retailer that sells the most gets the best price, hence why things are cheaper in Walmart is because they can buy it cheaper as they buy so much more volume than others they get it at a much cheaper price. So every one that ran to Amazon when Amazon started offering DRM free content at 99 cents put pressure on Apple. Apple knows if they can only offer DRM ridden content that they will loose, no customer likes DRM. So faced with that the Music companies offer Apple DRM but only if Apple agrees to a pricing change to allow the record companies the control they wanted. So if people had of stuck with Apple instead of running off to Amazon, the music companies would have never been able to force this on Apple.
And all those people that think Amazon will get to continue selling at the 99 cents price if they de-thrown Apple as top reseller is living in a dream world because the music industry will do the same thing to Amazon who likely will not stand up for the customer and try and protect the pricing, and we will find digital prices going even higher when the music industry has real control over the pricing. And if Amazon did try and stand up for the customer and say no to price increases, the music industry would do the same thing, offer content at lower prices to the competitors and bring down Amazon.
The music industry is full of old greedy people who have lost touch with the reality of how technology works and what the economy is like these days. They have no interest in offering products at reasonable prices. They prefer to try and pull their weights in the courts to stop pirating of music, with bills that will force ISPs to keep records so its easy to see who is pirating what, and keep cranking the price up on content. Do any of you really for an instant think that if music piracy stopped that the music industry would honestly lower prices?
So yes run off to Amazon where the prices are cheaper now, and then in a few years when you are paying 1.99 a song and 2.99 a song for popular artists try not to be surprised. Peoples willingness to be blinded by what is really going on is amazing. I for one will say props to Apple and Steve Jobs for keeping the price what it was for so long and knowing that the 1.29 price is still probably less than what the music industry wanted.
And to the "independent" artist you really are not getting the picture at all. You get 70% of the revenue of what you sell. Apple pays Tunecore/CD Baby or whatever company you go through their percent as well, and if you think any of those companies like Tunecore are doing it for just the fee you pay them you are really not in touch with reality. Apple pays the bandwidth and server space that hosting your content incurs. They pay for the advertising in the sense that people check iTunes for music, their reputation and marketing has gotten you a venue to sell your product. They pay for support for when a customer has problems using that song. They pay the development costs of putting together a program to distribute your content. They pay this out of the 30% they make on selling your product. Do you think they are rolling in the cash because of your sales? Ask any major artists who are signed under a label like Warner or something how much of the revenue from their music they get, I seriously doubt it is anywhere near 70%.
The record companies have forced this by offering DRM free music to Apple's competitors while withholding it from Apple, or when they did provide DRM free music to Apple require a surcharge for it. Do people honestly think Amazon had enough pull to force the music companies to give them DRM free content that they could sell at 30 cents less than Apple? in the world of retail the retailer that sells the most gets the best price, hence why things are cheaper in Walmart is because they can buy it cheaper as they buy so much more volume than others they get it at a much cheaper price. So every one that ran to Amazon when Amazon started offering DRM free content at 99 cents put pressure on Apple. Apple knows if they can only offer DRM ridden content that they will loose, no customer likes DRM. So faced with that the Music companies offer Apple DRM but only if Apple agrees to a pricing change to allow the record companies the control they wanted. So if people had of stuck with Apple instead of running off to Amazon, the music companies would have never been able to force this on Apple.
And all those people that think Amazon will get to continue selling at the 99 cents price if they de-thrown Apple as top reseller is living in a dream world because the music industry will do the same thing to Amazon who likely will not stand up for the customer and try and protect the pricing, and we will find digital prices going even higher when the music industry has real control over the pricing. And if Amazon did try and stand up for the customer and say no to price increases, the music industry would do the same thing, offer content at lower prices to the competitors and bring down Amazon.
The music industry is full of old greedy people who have lost touch with the reality of how technology works and what the economy is like these days. They have no interest in offering products at reasonable prices. They prefer to try and pull their weights in the courts to stop pirating of music, with bills that will force ISPs to keep records so its easy to see who is pirating what, and keep cranking the price up on content. Do any of you really for an instant think that if music piracy stopped that the music industry would honestly lower prices?
So yes run off to Amazon where the prices are cheaper now, and then in a few years when you are paying 1.99 a song and 2.99 a song for popular artists try not to be surprised. Peoples willingness to be blinded by what is really going on is amazing. I for one will say props to Apple and Steve Jobs for keeping the price what it was for so long and knowing that the 1.29 price is still probably less than what the music industry wanted.
And to the "independent" artist you really are not getting the picture at all. You get 70% of the revenue of what you sell. Apple pays Tunecore/CD Baby or whatever company you go through their percent as well, and if you think any of those companies like Tunecore are doing it for just the fee you pay them you are really not in touch with reality. Apple pays the bandwidth and server space that hosting your content incurs. They pay for the advertising in the sense that people check iTunes for music, their reputation and marketing has gotten you a venue to sell your product. They pay for support for when a customer has problems using that song. They pay the development costs of putting together a program to distribute your content. They pay this out of the 30% they make on selling your product. Do you think they are rolling in the cash because of your sales? Ask any major artists who are signed under a label like Warner or something how much of the revenue from their music they get, I seriously doubt it is anywhere near 70%.
easy pal, by end of march it says...
http://www.apple.com/pr/library/2009/01/06itunes.html
my concern is i have several other language songs/albums in DRMed format; worried it never get converted into iTunes Plus
nice PR library here dating way back to 2003!
http://www.apple.com/pr/library/