iTunes Store Variable Pricing to Begin April 7th?

[WPB2]

I have long thought that the labels should be able to set their own prices. Don't we live in a free market, Steve?

We used to live in a free market, until Obama.

Really though the free market solution is that the record labels don't have to sell their music to iTunes, if they don't want. The record labels must have seen that they would rather make $.99 per song than make $.00 not selling music on iTunes.

Seems "free market" to me

 

[.Andy]

We used to live in a free market, until Obama.

I heard Obama hates music and wants it to be more expensive.

 

[milo]

by end of march it says...

http://www.apple.com/pr/library/2009/01/06itunes.html

And again, is March over?

I heard Obama hates music and wants it to be more expensive.

I'm trying to figure out the Obama comment...

 

[.Andy]

I'm trying to figure out the Obama comment...

Don't try too hard I was just being facetious. On the other hand WPB2 was serious.....

 

[milo]

Don't try too hard I was just being facetious. On the other hand WPB2 was serious.....

I was talking about his comment (and agreeing with you), it was obvious you were kidding. Sorry I wasn't clear.

 

[Goona]

American corporations hate the fixed price model.
They are addicted to their tired bag of carnival tricks.

" buy two, get one free"
"was $1.99, now .99"
" free" ( read the fine print)
"low introductory rate"

I can go on and on and on.

They are also addicted to the sale.
Profit is less important than the sales figures themselves.
That is because every manager is subject to the almighty quarterly report.

Well said, you can even see it in the expectations for companies, they care less about profit than sale which is why a lot of people don't like Apple's model. They would rather them chase market share at the expense of profits.

Oh, give us even more reasons to shop DRM-Free at Amazon.com? Ok ... you've got a deal, Apple!

Yeah I'm sure there will be a mass exodus to Amazon because of this just like there was a mass exodus when Amazon had drm free tracks.

I have a feeling we're going to see an increase in Amazon.Com music downloads.

Better quality (debatable) and less expensive (not debatable)= better deal all around.

I have always been an advocate of CD's anyway- better quality and now cheaper, too. The only d/l's I have are the freebies from Pepsi promotions.

Apple has no one to blame but themselves when they fall to # 3 by the end of the year, behind Wal Mart and Amazon.

Yes just like there was an increase when Amazon had drm free tracks before Apple, itunes fell to number 3, let me go and check.

 

[northy124]

I have a feeling we're going to see an increase in illegal music downloads.

Yhup I can see that happening, unless it is an Artist I like then I'll buy the CD (Emin3m )

 

[Goona]

Hey, you can't get away with your drive-by troll attempt without someone correcting your FUD. I see you're new here (joined just this month!) so you'll get off easy this time.

1. Mac Mini price did NOT go up. It stayed the same while the specs went up. Now, in Australia and maybe elsewhere it might have, but it had to due to the dollar exchange rates. In US dollars it's the same.

2. OSX is slow? Where on earth did you get THAT from? OSX runs fine on ancient hardware, and on every release it just gets faster & faster (OK, except ONE, and I forget the exact version). And OSX runs just dandy on an ARM processor.... you know, the portable chip in the iPhone. Try THAT with Windows.Anything.

3. I happen to agree with you on that one.

4. So Dell has a 15 and 17" laptop for under $1k, is THAT the ONLY spec you use to compare? If you price out an EQUIVALENT laptop from Dell & HP vs the MacBook, they are within spitting distance of each other. Google for price comparisons and you'll see. But you must have done that already, right? If not, try this one chosen at random:
http://technologizer.com/2008/10/19/is-the-new-macbook-expensive/

5. Don't know about this. Do you? Give us some links.

6. You said Pro Apps, plural, but you only mention Logic. As for the other pro apps I see updates for them at a fairly regular rate. Is it just Logic that you have a complaint about? And what exactly is your complaint? Is Logic lacking is some specific feature update that you're wanting, or you just want to see generic updates at a faster rate? And Apple's Pro apps are anything but a joke. Ask channel 12 in my home town. They couldn't live without em.


Yes, ominous signs indeed. If you want to see signs of a giant corporation starting to fall apart, I suggest you look at Microsoft.

Why do you waste your time?

 

[Goona]

I suspect that Spotify and similar services will kill itunes in a year or less.

I'm in the UK and have been using it for the last week. It's amazing. Streams almost instantly, quality as good as itunes. Track library isn't quite as broad as itunes but it's impressive. The advertising is very light - every fifteen minutes or so - and I might just pay ten quid a month to get rid of that.

My computer is hooked up to speakers around my home so the lack of a mobile platform isn't too much of a problem - though I'm hoping they'll bring it to the iphone soon.

I listen to albums on spotify that I already own on CD - less hassle just to call them up on the macbook and they play straight off.

It's really quite refreshing. Hard copy is so passé.

Pass some of whatever you're smoking.

 

[Goona]

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%.

Couldn't have put it better.

 

[peterwalsh]

Pass some of whatever you're smoking.

I wish I could, Goona, but this is one of these times when America just aint getting the quality I'm getting in Blighty.

When you try it, you'll quickly realize that CDs and downloads are a thing of the past. I'm moving on, baby. I'm streaming baby and I don't need no CD, mp3 clutter.

It's all at my fingertips. And you're still putting things on shelves.

 

[milo]

When you try it, you'll quickly realize that CDs and downloads are a thing of the past. I'm moving on, baby. I'm streaming baby and I don't need no CD, mp3 clutter.

It's all at my fingertips. And you're still putting things on shelves.

First, how is mp3 "clutter" or "things on shelves"?

And second, streaming really isn't that appealing to anyone who does the vast majority of their listening on mobile devices. For music listening, the notion that everything will be in the cloud any time soon is a hard sell.

Right now streaming seems like a step back.

 

[slu]

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%.

I wasn't complaining about anything. I think we get a good deal from Tunecore/Apple. I don't know that Apple pays Tunecore anything though, and neither do you, so let's stop with the out of touch with reality stuff. I am sure Tunecore makes a nice living off the fees they charge, plus they also charge a recurring yearly fee for the albums/tracks you have on a music store (of which there are many choices other than iTunes). Also CD Baby (unlike Tunecore) takes a cut of the royalties that Apple or whoever pays you, but doesn't charge the same recurring yearly fees. Still so sure they get a cut from Apple even though you don't know how it works now?

I think Apple pays us nicely when we sell songs on iTunes. My original point was that I wish I could sell our record cheaper for the consumer. I currently do not have that choice. Maybe this variable pricing will give me that choice. That is all I wanted to say.

I am not making any real money off of it anyway, so it would be nice if it was cheaper and perhaps more people would buy it. I do not think I am getting a rotten deal at all. I just want to give consumers a better deal and I want more people to listen to (and possibly enjoy) our songs. That is it.

You are reading way to much into this. And why the quotes around "independent". Is that some kind of insult? My band made a record. We have no record deal. We are independent. We are not trying to get rich or famous, we just do it for fun. What is your point?

EDIT: Is this a summary of the first part of your post?

"It is not Apple that raised the prices here, it is the record companies, who are trying to make as much money as possible."

Welcome to America.

 

[peterwalsh]

First, how is mp3 "clutter" or "things on shelves"?

Because it's all part of that outdated concept of owning things - 3D physical or shiftable data on a device. Just let go of owning something.

Right now streaming seems like a step back.

Mobile streaming is the future daddyo, the only limit being local broadband constraints and those are improving rapidly.

Piracy is unstoppable and unpreventable - even the music companies have accepted that - scrapping DRM eg. Streaming is the future of digital rights management.

 

[slu]

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.

You need to let go of the concept that supply = physical, tangible object or computer file. The supply is not number of copies one can make of the song, the supply is the song itself, which is abstract and not replaceable (to most consumers) by a substitute product.

 

[milo]

Because it's all part of that outdated concept of owning things - 3D physical or shiftable data on a device. Just let go of owning something.

I'll be more than happy to give that up...when it's possible to do so without having to give up the ability to hear the music I want when I want. Today that's not possible.

Mobile streaming is the future daddyo, the only limit being local broadband constraints and those are improving rapidly.

I don't disagree that it's the future. Meaning it doesn't meet the needs of most people right now ( and you didn't really dispute what I said).

We'll all move on when the technology makes it possible to use and actually be an improvement from what we currently have. And apple will too, they are smart and there's plenty of time before that day comes.

In the meantime, files aren't going anywhere for at least a few years. At least.

You originally said "kill itunes in a year or less".

That is preposterous. Period.

 

[Avatar74]

As an independent artist who has a record on iTunes, I'd like to share a couple of things about how it works now.

You have to go through a company like Tunecore or CD Baby to even get a record on iTunes. Apple will not deal directly with you. You pay a small amount for this service, but you get to keep all royalties you get from Apple (with Tunecore). That is $7 per album sold and $.70 per song sold. Apple keeps the rest.

I want to make a correction to my earlier response to this...

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.

If you're smart, you'll figure out based on your existing album sales what your market is, and budget accordingly to what kind of results you can expect at whatever price point Apple wants to put you at. You cannot possibly lose that way relative to your alternatives... including promoting and distributing the album entirely by yourself just to collect the remaining 39 cents per track or $3.99 per album... which will get eaten up by the marginal expenditure of completely self-powered marketing, promotion, distribution and advertising. Sure, you may have to do some anyway with iTunes, but the costs will be significantly less, with access to a much larger market than yourobscurebandnamehere.com is likely to generate.

 

[peterwalsh]

You originally said "kill itunes in a year or less".

That is preposterous. Period.[/QUOTE]

It'll happen as soon as the major labels decide it's the most realistic - and future proof - method to get money for their recorded music.

Kids pirate music. Kids own mobile phones. But kids will listen to music on their phones and put up with the ads/small subscription rates.

Have you noticed that sound quality has largely dropped out of the equation?

Same will be true of files.

And have a gander at the below:

http://uk.techcrunch.com/2009/02/23/the-day-itunes-died-spotify-is-working-on-a-killer-iphone-app/

 

[OddyOh]

advertising lullaby

LOL...that reminds me what a wise comedian once said...

American corporations hate the fixed price model.
They are addicted to their tired bag of carnival tricks.

" buy two, get one free"
"was $1.99, now .99"
" free" ( read the fine print)
"low introductory rate"

I can go on and on and on.

Seriously though, this is a stupid move by stupid people. Record labels will see less sales with certain songs at $1.29...4x less, so it won't even be worth it, not to mention the bad blood consumers already have with them.

 

[slu]

I want to make a correction to my earlier response to this...

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.

If you're smart, you'll figure out based on your existing album sales what your market is, and budget accordingly to what kind of results you can expect at whatever price point Apple wants to put you at. You cannot possibly lose that way relative to your alternatives... including promoting and distributing the album entirely by yourself just to collect the remaining 39 cents per track or $3.99 per album... which will get eaten up by the marginal expenditure of completely self-powered marketing, promotion, distribution and advertising. Sure, you may have to do some anyway with iTunes, but the costs will be significantly less, with access to a much larger market than yourobscurebandnamehere.com is likely to generate.

I agree. It is an excellent deal. And I can assure we spent nowhere near $50K recording. But if you are a serious musician and you want to actaully make a living from it, you might be better off not signing with a label and hiring a PR firm or something similar instead.

 

[milo]

It'll happen as soon as the major labels decide it's the most realistic - and future proof - method to get money for their recorded music.

And as soon as the people who bought the 170 million iPods and other players update to new ones that have wireless capability.

And as soon as those people are willing to spring for paying the monthly iPhone data charges, or are able to be in wifi range pretty much all the time.

And as soon as those people are willing to pay a monthly spotify fee or listen to ads.

And as soon as people are willing to accept much shorter battery life.

And as soon as people are willing to accept that after paying all those monthly fees, once they decide they want to stop paying, they are left with nothing to keep.

Starting to see the reality of it yet?


This is basically just the next iteration of music subscription services. And so far, all of those have failed dismally. Going to "streaming" isn't going to change the mind of anyone averse to the whole concept of "renting" music.

 

[Avatar74]

I agree. It is an excellent deal. And I can assure we spent nowhere near $50K recording. But if you are a serious musician and you want to actaully make a living from it, you might be better off not signing with a label and hiring a PR firm or something similar instead.

And I totally advocate that. In 1996, I wrote a research paper on this very subject... particularly internet distribution of music, which was in its infancy then—mostly mediocre live streaming, etc.

What I found was that CD sales were reaching maturity, technology on the desktop had caught up with multimillion dollar recording operations, bandwidth was available but the content simply wasn't yet there.... and to top it off the artist was getting royally (pun intended) screwed. All that was needed was a demonstrable business model that could make the artist and the distributor money.

iTunes did that, and even wiped out DRM after much humming and hawing by the industry which was paranoid not of piracy, but they are deathly paranoid that the record company as we know it is becoming obsolete.

As a group, artists have the upper hand here... they can leave in droves and completely redefine the way the industry operates at every level. There will always be a Britney or two who needs the massive promotion machinery, but like you said... if they need it that badly, they can hire a PR firm.

Oh, and that's another thing... When you're with a major label getting your pithy 7%, not only do you have to pay your session musicians, producer, business agent, PR firm, attorneys, etc. out of that, but in many cases, expense reports filed by the company for promotional activities (e.g. wining and dining radio station program directors, etc.) can, and often do, get tacked on, on TOP of your advance.

 

[jzuena]

But if you still don't believe me, may I ask what brand of soda you drink and why?

Market Basket (local discount grocery chain) cola because it is the cheapest that still has a "brand name"-ish taste. It is the house brand at the store with the lowest price on the big name brands anyway. If Coke, Pepsi or RC goes on sale to match, I'll buy them instead. I have no brand loyalty. Marketers probably hate me.

I'll also switch to Amazon (mostly have anyway) if iTunes songs I like were repriced to $1.29. I have no digital brand loyalty, either. Of course, now that Apple has caved, you can bet Amazon will be strong-armed to move the exact same set of songs to $1.29 that Apple does.

 

[napabar]

Jeez...

The amount of misinformation and lack of logic in these forums never ceases to amaze me.

The music labels are raising the price, not Apple. They have been on Apple for YEARS to do variable pricing. In order to get DRM-free music, Apple finally agreed. iTunes pricing had become much more complicated than when it first debuted in 2003. You have movie purchases and rentals, applications, music videos, and TV shows, all at various prices. Their customers have become more sophisticated, so the one size fits all model of .99 cents has become moot.

Why does everyone think Amazon is the greatest thing since sliced bread? Selling songs in early Clinton-era codecs at 320K does NOT make them sound better than 256K AAC files from this Century. Oh, and if you think Amazon is going to keep their prices, think again. The Labels got Apple to go along with this pricing structure. You can bet your A$$ that when Amazon's contract's are up, they will be forced into a similar price structure. They have no bargaining chip anymore.

 

[peterwalsh]

Starting to see the reality of it yet?

There are limitations, of course. But I'd say giving SO MUCH MONEY - and even more money - to itunes for my music is quite a major limitation, wouldn't you?

Monthly subscription is only equivalent to about two albums a month. That doesn't seem like much.

Wi-fi and battery life are improving rapidly. Should also be able to cache albums on playlists for when outside wi-fi reach.

And all those people with ipods, well don't they have phones? Don't they upgrade them every few years. Will they say no to streaming music?

And true, when you stop subscribing you'll have no music. But when are you going to stop buying music? When you're an old fart. There is no end. You'll keep buying stuff year in year out and that's what the majors have been relying on since the fifties.

But you're right, it all comes down to personal circumstances and what works for your lifestyle.

The kids will lap it up.