iPod More Microsoft Zune BS, Secret Goal=Make Ipod Cost More

[donlphi]

I own an independent music production company. Some of our music is sure to be played on Zune. I want a cut proportional to our market share too.

Universal is not the only music producer on the planet.

Great point. There are a ton of labels out there that must be pissed off about this, particularly if they do not get their cut.

It's gonna start looking like Goodfellas in the music industry. Payoffs, bribes, whatever. This is the start of something really bad.

 

[cecildk9999]

Further, I could see Apple, at this point in time, cutting off the major labels if they tried to push this type of arrangement. Apple could probably work directly with artists and open up their own music label, provided they sign a deal first with Apple Music.

I don't know if Apple is technically allowed to do this; check out their legal squabbles with the Beatles' Apple Corps over the past 20 years (Apple computer is distinctly computer sphere; Apple Corp is allowed music liscence, or some other BS)

 

[joemama]

I don't know if Apple is technically allowed to do this; check out their legal squabbles with the Beatles' Apple Corps over the past 20 years (Apple computer is distinctly computer sphere; Apple Corp is allowed music liscence, or some other BS)

Yes, they are - by simply using the iTunes umbrella, not Apple. This is how it is going to play out - Apple will spin off a music distribution company. They are not a record label, they do not produce music, just distribute content and collect a small fee for doing so.

It will be up to the artist to book studio time, producers, etc. I give it 2-4 years when current contracts run out.

 

[Swytch]

A bad deed plus a bad deed does not equal a good deed.

There are many people that I know who can afford to buy music but decide to download it illegally. What's your point?

you obviously missed my point entirely

Before you say anything else about how greedy the record companies are and rally protests of anti-record companies, please please please please... have something to support your claim. You don't have any idea how much it takes to produce one album and be able to sell it well. But I guess $12 for a cd is way overpriced for everyone now.

actually I have a pretty good idea how much it costs to produce an album, I run a recording studio with my brother, it does not cost millions of dollars to produce an album, in fact the bands end up paying less than $5 a CD, and they sell to listeners for $5-10... or give away...

and no, they are not crappy quality, just as good as any record labels album...

 

[SRSound]

?!? (This is not really on topic, but my curiosity is piqued).

I thought that Red Book refers to the CDDA standard, and the only relevant standards are 16 bit 44.1 kHz stereo PCM.

I presume that most studios, home or not, typically do 24 bit with a higher sampling rate pretty routinely.

B

Sorry - to clarify, I meant things like having the text information properly assigned with track spacing codes and such, having dynamic levels that wont be destroyed by radio station's heavy compression and limiting, etc - not so much bit and sample rates. Sorry, you're right - we routinely record at 192KHz/24bit eventhough it gets knocked down to 44.1KHz/16bit for the printing master.

 

[Sesshi]

That throwaway comment is going to cost Geffen dearly.

 

[robbyx]

A wonderful sentiment, and I didn't even think of the tech side. If you have time to draft up some type of formal proposal, I will send it right out to Barnett and other parties who have expressed great concern. Believe me, they really DO want to find a solution that benefits everyone (YES including the artists AND consumers).

I'll bite.

I tried sending you an email, but the system says you do not accept emails. So how am I supposed to send you anything?

 

[Surreal]

While I do think the labels are greedy and hostile towards consumers, I don't think CD pricing is the problem. You buy a CD for $12 and get to enjoy it for years and years. If you listen to an album 100 times, each listen has only cost you a mere $0.12. Listen a thousand times...and you get the point.

$12?

i pay $12 for CDs. it's the $15+ CDs i don't dig.

 

[robbyx]

$12?

i pay $12 for CDs. it's the $15+ CDs i don't dig.

$3 is really going to break the bank? Have one less beer at the bar...

When you consider the total cost of ownership of a CD, it's dirt cheap. I have CDs that I bought in high school that I still throw on every now and then. I've probably listened to some of them a few hundred times, maybe a few thousand. So, each listen has cost me a penny, give or take.

I don't have an issue with pricing. It's about quality (or lack thereof).

 

[zap2]

$3 is really going to break the bank?

Were do YOU draw the line? Why not make it 30 bucks a CD? Its only a "few less beers" right? Hell make it 50! Just cut back a little more!

 

[SMM]

ALERT - Microsoft Cheats!

I do not know how many of you have witnessed first-hand the history of the PC and Microsoft. I graduated from college in 1983 and basically went straight into PC's. Many of my friends went to work at Microsoft (I live in Seattle). There were a few times when I was tempted to do the same. But, I really liked the company I worked for and was really interested in building MRP systems.

During the '80's it was R:Base/Dbase on Novell. Then in the '90's, we outgrew that technology and I also worked concurrently with Sun Unix. In 2000 it went back to NT/SQL Server/VB. So, here I am. I have been part of this evolution and I can definitely see this Zune deal as a continuation of what MS has done for a couple decades.

Redmond is definitely afraid of Apple. The two companies go way back. MS has shafted Apple a couple times already. But, Apple has stayed within an acceptable market share and not really been in a threatening position. They also have spent much of their existence living on a shoestring. They did not challenge their stranglehold of the business customer. MS could afford to be ambivalent about Apple. Then things began to change.

Apple became much better managed strategically and financially. They could now leverage their superior engineering. Then came the iPod. This little device completely changed the landscape between the two companies. Now, Apple had a hugely profitable product which commanded ~80% of its' market. This generated capital assets that Apple never had.

MS did not need a an analysts report to realize the universe changed. With R & D money, Apple finally has the capital to build additional manufacturing capacity, enter into strategic partnerships (like Intel), increase their product line, and expand their software business. MS, without its' software revenue, is little more than a merger between Nintendo and Logitech. They do not make computers (thank God). If you thing about it, Apple is a more diverse company.

So, what do you do if you are MS? You go after the 'cash cow', the iPod. You cannot discredit it (even they produce a lot of anti iPod spam). It is far too popular. What you do is make a competing product and hope to grab significant market share).

Everyone knows the axiom about the 'first to market...'. MS is really late to the dance. I would be surprised if their 'focus groups' gave them any hope the Zune would greatly impact iPod sales. So, now what do you do? (and what I have spent far too much time getting to).

MS is doing what they have always done. They are offering incentives to others (maybe taking a loss in the process) to make their INFERIOR product sell better. Thus it will still accomplish its' goal; take sales away from Apple. I wonder if some of you see a certain irony here. In the past, MS was hugely discounting their SW to entice computer (hardware) sellers to only promote MS products. In this case, MS is offering SW (movie/music) vendors incentives to only promote their hardware (Zune).

I believe Apple's management is insightful enough to have seen this move. Let's face it, MS has almost evolved into the same category as the Nixon whitehouse (not very clever dudes). Going forward, what we can all expect to see is more assaults on profitable Apple products, and disinformation trolls.

 

[hooch]

iPod Tax

You know, I was thinking. I have never heard about the iPod tax until now. But I was think if they are going to try to tax an iPod because of the threat of pirated music, then they might as well have a computer tax. I mean afterall, you are not downloading the pirated music with the iPod. You can play music on a computer like an iPod. Isn't the real culprate the computer??? This is just the biggest joke I have ever heard.

 

[tripleanica]

I own an independent music production company. Some of our music is sure to be played on Zune. I want a cut proportional to our market share too.

Universal is not the only music producer on the planet.

Rocketman

i said the exact same thing

i have my own label, i think microsoft, apple, and sony should pay me 1% on every zune, ipod, or walkman sold. i'm sure someone's going to illegally download the music on my label.

but great minds think alike, so i'm not complaining

 

[balamw]

I don't have an issue with pricing. It's about quality (or lack thereof).

I do have a problem with pricing, especially since $12-$15 is often a sale price for CDs, which I can also buy directly from BMG's yourmusic.com for $5.99 a few months later.

If all CDs were available for $5.99 including shipping (or download), I'd buy a heck of a lot more CDs. In fact I already do as I have been using yourmusic to fill my back catalog, replace LPs in a more artist friendly way than buying used.

B

 

[orbea847]

I found this but don't know if its been posted:

"To attract current iPod users Microsoft is going to let you download for free any songs you've already bought from the iTunes Music Store. They'll actually scan iTunes for purchased tracks and then automatically add those to your account. Microsoft will still have to pay the rights-holders for the songs, but they believe it'll be worth it to acquire converts to their new player."

Eric

 

[SRSound]

I'll bite.

I tried sending you an email, but the system says you do not accept emails. So how am I supposed to send you anything?

Hey, if the PM doesnt work I'll send you an email.

 

[robbyx]

If all CDs were available for $5.99 including shipping (or download), I'd buy a heck of a lot more CDs. In fact I already do as I have been using yourmusic to fill my back catalog, replace LPs in a more artist friendly way than buying used.

This isn't realistic. You are forgetting where most of the money goes: marketing. It costs hundreds of thousands, even millions, of dollars to launch and promote an artist.

You listen to a CD over and over again and pay $15 for it. You read a book once and pay at least that. But no one is up in arms over book pricing. And what about DVDs? You pay anywhere between $10 and $20 for a DVD and maybe watch it three times.

When it comes to the consumption of content, CDs are still dirt cheap compared to other stuff - when one considers how many times one "uses" the content. Sure, labels could sell CDs for $5.99, but there would be no videos, no tour support for artists, no advertising of the new release, no website, no radio servicing, etc.

As someone who ran an indie label for years, I can tell you that CD manufacturing is very affordable. It's the advertising and promotion that eats you alive. Running ads, even in smaller "zines", still ends up costing thousands of dollars. Try advertising in Rolling Stone.

Do some simple math. Let's say that it costs $1 to manufacture each CD and you manufacture 2,000 dics. You then spend $10,000 on marketing. You've now spent $12,000 on the release - or $6 per disc. You sell to a distributor for $8. They sell to a store for $10. The store sells for $14.99. At $8 per disc, you need to sell 1,500 copies of the album before you even make a penny. And in the indie world, 1,500 copies is quite an accomplishment.

Now imagine the numbers on a major label scale. Your marketing budget is measured in the hundreds of thousands of dollars. You have to advance the artist a large sum of money. Etc. How many albums do you need to sell to break even? 50,000? 100,000? Who knows. The point is, marketing music is very costly - and given all those costs, CDs are still pretty cheap.

 

[Nemesis]

Who cares - MSucks

Considering how ugly Zune is, which looks like a cheapo plastic toy with no real, appealing substance, deprived of all love when it was designed and constructed .. Microsoft has to pay not only Universal, but to me as well, if they wish to sell it to me.
Yuck!
Anyway, for such an ugly and inferior user experience, no doubt they have to do something extra to even start the product promotion.

 

[tk421]

As someone who ran an indie label for years, I can tell you that CD manufacturing is very affordable. It's the advertising and promotion that eats you alive. Running ads, even in smaller "zines", still ends up costing thousands of dollars. Try advertising in Rolling Stone.

Do some simple math. Let's say that it costs $1 to manufacture each CD and you manufacture 2,000 dics. You then spend $10,000 on marketing. You've now spent $12,000 on the release - or $6 per disc. You sell to a distributor for $8. They sell to a store for $10. The store sells for $14.99. At $8 per disc, you need to sell 1,500 copies of the album before you even make a penny. And in the indie world, 1,500 copies is quite an accomplishment.

Now imagine the numbers on a major label scale. Your marketing budget is measured in the hundreds of thousands of dollars. You have to advance the artist a large sum of money. Etc. How many albums do you need to sell to break even? 50,000? 100,000? Who knows. The point is, marketing music is very costly - and given all those costs, CDs are still pretty cheap.

You're right. I think that artists, and labels, deserve their fair share. We see the same grumbling about movie downloads. People say there's no packaging, no shipping, no physical media costs. It's just bandwidth and servers, they say. But they forget that the movie cost $100 million to make and $50 million in marketing. Of course many films are significantly more expensive than that.

That isn't my problem with this Zune deal. My problem is that there is the assumption that everyone with a digital music player steals music. The major record labels thus get compensated twice. Furthermore, what is Microsoft going to do about indie labels like yours? My brother is a musician and sound engineer. Where's his cut? Surely they're not paying everyone!

I resent being accused of stealing music. And I resent my money going to someone of Microsoft's choosing for so-called compensation. That's why I think this is a terrible idea.

 

[Marble]

I found this but don't know if its been posted:

"To attract current iPod users Microsoft is going to let you download for free any songs you've already bought from the iTunes Music Store. They'll actually scan iTunes for purchased tracks and then automatically add those to your account. Microsoft will still have to pay the rights-holders for the songs, but they believe it'll be worth it to acquire converts to their new player."

Eric

Now that is aggressive! Scanning your opponent's network is low, and some of these people are going to be coming over with hundreds of purchased songs!

 

[Ja Di ksw]

I found this but don't know if its been posted:

"To attract current iPod users Microsoft is going to let you download for free any songs you've already bought from the iTunes Music Store. They'll actually scan iTunes for purchased tracks and then automatically add those to your account. Microsoft will still have to pay the rights-holders for the songs, but they believe it'll be worth it to acquire converts to their new player."

Eric

Wow. Just . . . . Wow. I don't know anything about law, but it seems like there should be *something* illegal about that.

 

[orbea847]

Also rumored:

"Microsoft isn't stopping with a WiFi-enabled PMP, they're actually going to launch an MVNO next year using all Windows Mobile-powered HTC handsets. These handsets will let users connect to the same social network you'll be able to access over WiFi using the portable media player."

The Zune brand is intended to be an entirely vertically integrated end-to-end solution, not unlike the iPod / iTunes / iTunes Music Store triumvirate.

Eric

 

[corywoolf]

To be honest, I have had a lot of folks come up to me at CompUSA and ask when the Zune will be out. I think MS has a winner on their hands, the iPod is getting stale and people are looking for a change. Apple just hasn't been making any significant upgrades to it for a while. All I can say is that I hope Apple's long rumored True Video iPod is around the corner and can be a major milestone. I may get a Zune if it does decent. I can always put Vista on my MBP and use both my iPod and Zune with my external HD holding my music. I just hope this kicks Apple in the butt and makes them quit messing around. I am getting sick of the weak iPod updates. May the fight begin!

 

[robbyx]

I resent being accused of stealing music. And I resent my money going to someone of Microsoft's choosing for so-called compensation. That's why I think this is a terrible idea.

I agree 100%. I --- and the 1500+ plus purchased CDs sitting in my basement (as I've ripped them all to iTunes) --- resent being labeled a criminal by the industry I have supported for years.

 

[robbyx]

...the iPod is getting stale and people are looking for a change. Apple just hasn't been making any significant upgrades to it for a while...I just hope this kicks Apple in the butt and makes them quit messing around. I am getting sick of the weak iPod updates. May the fight begin!

I don't know if the problem is that the iPod is "stale" or that Apple simply hasn't expanded their product ecosystem.

I think iTV is a great idea. As someone who has struggled with lousy UPnP devices and software, I can't wait for Apple to deliver a truly elegant system for video, photos, and other content stored on one's computer.

I also think it's time for Apple to get serious about a home server/NAS. How about a headless Mac Mini with 4 drive bays and RAID support? Users can store their iTunes and iPhoto libraries on the system with the click of a button --- and iTV can access all of the content.

The rumored iPhone is also a great move. Combine an elegant phone GUI (now wouldn't that be nice!) with an iPod and you have a winner. Throw in a 3 megapixel camera and you have the perfect convergence device. Take snapshots at a party, call your friend, and rock out to some tunes on the cab ride home. One device. Do such devices already exist? Absolutely (I'm considering a Sony Ericsson K790a right now), but are any of them as simple and elegant as the iPod? Heck no.

How about a Tablet Mac? I'd love to have a super thin and lightweight tablet computer to use for surfing the web from my couch or jotting down notes at a meeting. It wouldn't replace my iMac, but it would be a welcome assistant...assuming the price was right.

*True* Video iPod. D'uh.

Okay, I'll stop with my wishlist. There are plenty of new and exciting directions Apple could take. If they don't WOW us at MacWorld this year (and, no, the iTV is not enough), I worry that their industry leading position could be at risk.