Music Labels See Slower iTunes Sales Growth in Wake of Price Increases

[ericinboston]

I buy Used (Very Good) CDs from Amazon.com... physical media... only way to go! Cheaper too! Then I rip at 320kbps -- I say boo to 256 AAC.

Yup...I buy used cds all the time for $5-$7 on eBay...or full length new releases for $9.99-$12.99 on Amazon...or older brand new releases for $7.99-$9.99 on Amazon.

Don't give me a watered down (mp3) quality of the music...give me the full quality and I'll decide what to convert it to (if anything).

-Eric

 

[gguerini]

Apple should start to change the prices since they don't care about computers anymore. They need to make money someway somehow right? Or just make money with iPhone, iPad (?)....

 

[Swift]

Remember, this is the Bronfman heir

Well that was obvious... And to think these guys get PAID to run a business.

His grandfather was a bootlegger, so he understood business. His father was CEO of Seagram's, so he knows a few things. Edgar Jr.'s from the shaky third generation. Most of the decent kids have gone into art or other rich men's amusements, like the Montreal Expos, and so on, or activism for Israel; Edgar Jr. had the family buy him Universal, screwed up with that, and now he's doing his incompetent best to ruin the music business. Quod erat demonstrandum.

Funny how Steve had it right, huh? Say all tunes were still .99? Or even .79? Volume goes UP, profits go UP. They know that in the liquor business. Poor little Eddy doesn't.

 

[gnortenjones]

Maybe I'm dense, but I can't tell if their saying the NUMBER of sales dropped, or the amount of revenue dropped, because they are two different things. You CAN raise your prices, sell fewer units, but still make more money, and thats the bottom line they care about.

 

[aforty]

How much did prices increase by? I'm oblivious to iTunes, I still get my music from physical media.

 

[dicklacara]

Duh!

According to the report, Warner CEO Edgar Bronfman, Jr. claims that the pricing increase has been a "net positive" for the company as it sees the music download business maturing, but acknowledges that raising music prices 30% during a recession may not have been a smart move.

Effer Bronfman pissed away the family fortune (Seagrams, Dow, etc.) attempting to become a media mogul... just the same old same old!

 

[mikecap]

Apple told them not to do it

Apple showed them the data, and argued that $0.99 was the right price point. They didn't listen, and this is what they get.

 

[Swift]

Apple should start to change the prices since they don't care about computers anymore. They need to make money someway somehow right? Or just make money with iPhone, iPad (?)....

Apple doesn't set the prices anymore, that's the point. They traded that for taking out the DRM.

And iTunes isn't a profit center at all. The credit cards, and maintaining iTunes, takes most of the 30% that they keep from each sale. The idea is to provide a service for the iPod and iPhone. They sell hardware.

 

[LagunaSol]

It's not just the fact that it was a price increase that killed the buzz - it's the fact that they are now above that magical $1 psychological barrier.

At $.99 for a song, I just buy it without thinking about it. At $1.29, I think about it, then I tend not to buy it. Sure, on paper it's only 30 cents, but my brain just doesn't like it. Had prices already been $1.29 and they raised them to $1.59, few people would have cared. To go from under a buck to over a buck though = bad move.

It's science.

 

[VenusianSky]

It is pretty pathetic when you can purchase a CD cheaper or at the same price as the digital version.

 

[Cameront9]

How much did prices increase by? I'm oblivious to iTunes, I still get my music from physical media.

They went to a variable pricing structure, with some older titles at 79 cents, then 99 cents, and most new releases at 1.29

 

[je_wallace]

Music vs eBooks?

Hope McGraw-McHill & the other publishers are taking note of this announcement.

The Market determines the price, not the executive, admin or government official.

 

[JPark]

There's a huge psychological difference between $.99 and $1.29. I'll drop $.99 on anything without giving it a second thought, but I have yet to buy a single track for $1.29.

 

[Eidorian]

It is pretty pathetic when you can purchase a CD cheaper or at the same price as the digital version.

There are a few instances on eBay where I pay $0.99 for a used disc and $2-3 on the USPS shipping.

A few of my purchases came with additional scratched discs as packing material for the good discs. Not that a few minutes with cdparanoia and error checking didn't manage to scrape off 90% of the tracks on those bad discs.

 

[LagunaSol]

Apple should start to change the prices since they don't care about computers anymore.

Can we bury this ridiculous chestnut already? Apple still makes the nicest computers on the market (and they're selling more of them than ever). Yes, a MBP update is desperately needed, and soon, but they're still the best-designed laptops on the planet, and the new iMacs are stellar.

 

[kerryn]

File this one under "duh!"

 

[bobr1952]

Higher prices mean more torrent users--seems simple enough to see that--but I guess that is because I am not in the music business.

 

[mozart11]

The jerks deserve it.

I buy 95% less music because of the price increase. I used to spend everyday in iTunes buying music. $1.29 is not worth it, literally for a track of the crap they call music. Even my kids don't buy it - and I pay!

And you are talking to someone with 8 thousands iTunes bought songs!

 

[nemaslov]

How many times can you buy Freebird? I'll still buy a CD over a download. Songs should cost 50 cents,

 

[VulchR]

...
According to the report, Warner CEO Edgar Bronfman, Jr. ... acknowledges that raising music prices 30% during a recession may not have been a smart move.
...
Article Link: Music Labels See Slower iTunes Sales Growth in Wake of Price Increases

Duh.

It's called a demand curve, and consumption declines with price for luxuries. I know that (even though I am geeky academic in the UK who has to justify my economic value every &^%$£^ day), but I bet Bronfman's salary is far higher than mine.

 

[JPark]

The jerks deserve it.

I buy 95% less music because of the price increase. I used to spend everyday in iTunes buying music. $1.29 is not worth it, literally for a track of the crap they call music. Even my kids don't buy it - and I pay!

And you are talking to someone with 8 thousands iTunes bought songs!

You spent $8000 on what you consider crap? I need to get into the Port-a-John business.

 

[nep61]

Apple showed them the data, and argued that $0.99 was the right price point. They didn't listen, and this is what they get.

You said it !
Wasn't Jobs the one who argued against the record companies trying to convince them to keep the prices fixed?
I rarely buy much music anymore... my 9800+ songs on my iPod will have to do for now.

 

[LagunaSol]

And you are talking to someone with 8 thousands iTunes bought songs!

Ouch.

 

[Chupa Chupa]

Other music industry related news today:

February 9, 2010, Hollywood, CA. -- Warner CEO Edgar Bronfman, Jr., fresh from a Himalayan retreat told reporters he guarantees the Indy Colts will win Superbowl 44 by 31 points and that Payton Manning will be the hands down MVP.

(for those of you in Rio Linda, the previous "news" bite was satire. Bronfman did not make that statement today -- to my knowledge -- nor did he just come back from the Himalayas -- to my knowledge. Heck I don't even know who he rooted for in SB44, if any team, or if he even likes football, although I do know he loves the royalties made from licensing music for play during football games -- OK just guessing there).

 

[jaw04005]

Maybe I'm dense, but I can't tell if their saying the NUMBER of sales dropped, or the amount of revenue dropped, because they are two different things. You CAN raise your prices, sell fewer units, but still make more money, and thats the bottom line they care about.

I would say the latter. Although it's not real clear.

Knowing the music industry, he could mean something convoluted like it was a "net positive" because they now control pricing or that higher priced digital downloads increased CD sales (which is what they really want to happen) or they believe it will benefit them in the future.

They went to a variable pricing structure, with some older titles at 79 cents, then 99 cents, and most new releases at 1.29

Most older titles that are worth a damn are $1.29 too. Just try to download something from the Stones, Billy Joel or Aerosmith for $0.69 or $0.79.

There are so few $0.69 cent songs that Apple doesn't even bother trying to feature them in the iTunes Store anymore.