Music Prices Going Up?

[hunt]

From the Apple PC:
"But in any event, most of the ALBUMS on iTunes are priced at $9.99 and below and, no, they're not creeping up. There's always a few that are a little higher than you can go in and pull out, but they're very, very competitive and we see in the future the prices of the ALBUMS coming down, not going up, because that's what it's going to take to sell more ALBUMS and it's in everybody's best interest to do so."

No mention of the price of individual songs. Sounds like the album price is unchanged but the price for popular individual songs is going up.

 

[joemama]

this news more than anything shows how Apple needs to make iTMS its own record label. Find and sign their own artists, promote and sell them on iTMS. Apple gets a larger piece of the pie, as does the artist. Videos, songs, you name it....Apple can do it all, especially becuase most people and more and more create content on the Mac!

Eventually cut out the middle man, ie greedy big record companies.. buh-bye execsm buh-bye MTV (well thats a far stretch, but you get the point)

Think about it, the ONLY thing Apple needs the BIG 5 for (right now) is the music itself...

 

[macdong]

there is an online music store from Russia that sells an album for 50 cents!
and it's legal! (apparently the RIAA in Russia is either very generous, or very lazy).
and those record **** heads in US want to raise prices?

 

[macdong]

How often have you bought a CD just for one or two songs that you liked?

Why not make the "best" songs, or at least the best selling ones, more expensive? Make the Billboard top 100 $1.25 and drop whole Albums down to $8. If a song drops out of the top 100, it goes back down to $.99.

Seems fair to me.

Of course, on the flip side, maybe any song 10 years or older should go for 25¢ or so...

Why should all songs be the same price? They're not all the same quality.

This is just an avenue that needs to be explored... - j

we have been down that road before, before iTMS showed up.
the result is, people exchanging music on P2P network instead of buying the whole aldum for one song.

 

[Lord Bodak]

Wal-Mart may sell them at a loss, but the label still gets the same amount it gets from anyone else-- and I'd bet that Wal-Mart sells a heck of a lot more CDs than most anyone else.

Walmart actually sells music and movies at a loss. They found that it was a good way to get new demographics shopping at Walmart. I for example often go to pick up a dvd and leave with a dvd... some toilet paper and a gun... ok not a gun... but I could if I wanted to.

They are using the same strategy for their online music service... you go for the music, but stay for the floor mats.

This all comes from CNBC... I have no first hand knowledge of walmart's business.

 

[Hattig]

The New York Post claims that the five major record labels have been in negotiations with Apple over pricing as well as other issues surrounding Apple's onling music store (iTunes).

Wait ... so all 5 music companies suddenly go to Apple to increase the prices? What a coincidence ... not.

Sorry, that is price fixing, and that is illegal. Well, in civilised countries it is illegal.

 

[DGFan]

this news more than anything shows how Apple needs to make iTMS its own record label. Find and sign their own artists, promote and sell them on iTMS. Apple gets a larger piece of the pie, as does the artist. Videos, songs, you name it....Apple can do it all, especially becuase most people and more and more create content on the Mac!

Apple Computer's argument in the trademark lawsuit filed by Apple Music is going to be that Apple Computer is filling the role of Wal-mart or Tower Records. If they did as you suggested they would be filling the role of BMG. That would clearly be within the same business as Apple Music and would almost certainly violate their trademark.

 

[GeeYouEye]

The NY Post has a worse track record than any rumor site, except for when they correctly predicted the existence of the iTMS itself... but that was after the rest of the net new about it. I wouldn't have even given this a Page 2 placement.

 

[azdude]

From the Apple PC:
"But in any event, most of the ALBUMS on iTunes are priced at $9.99 and below and, no, they're not creeping up. There's always a few that are a little higher than you can go in and pull out, but they're very, very competitive and we see in the future the prices of the ALBUMS coming down, not going up, because that's what it's going to take to sell more ALBUMS and it's in everybody's best interest to do so."

No mention of the price of individual songs. Sounds like the album price is unchanged but the price for popular individual songs is going up.

As someone stated before, "Think. Read the thread. Then Post."

This was already posted in this thread... it is another quote from the conference call:

Steve Jobs: Great. Let me answer those two things. First one is the price for SONGS in the iTunes store is remaining 99 cents per SONG, and we think that's what customers want and that's what we're delivering. So the prices will remain 99 cents per SONG and any rumors to the contrary are simply not true.

 

[jayscheuerle]

we have been down that road before, before iTMS showed up.
the result is, people exchanging music on P2P network instead of buying the whole aldum for one song.

You're missing the point. There are people in this very thread that say that they buy whole albums online.

What I'm asking is why, if I wanted to buy 2 songs off of Queen's Greatest hits, should the extended & classic "Bohemian Rhapsody" not cost me more than let's say... "Flash Gordon"? Why does every song have to be the same price? I'd pay more for a better song as long as it evened out with paying less for obscure titles.

Sure, everybody wants to screw the big, bad record companies. But if you were a musician/songwriter/artist, wouldn't you want people to pay SOMETHING for all your work? It seems like everybody is focusing on the record companies and not the people creating the work. If you could send an artist money directly for the rights to play a song that took them months to create and speaks to you in a direct profound way, what would you send them? 25¢? A dollar? $5? If you give the musician on the street a dollar in his hat for playing a cover, surely you can pay more than that to someone who lets you take that song with you.

This business model isn't finished yet. The way it was before and the way it is now makes no sense.

 

[billyboy]

A tactic to stick it to the big 5

Any other company going this route would die, but remember the influence and brand awareness that Apple has built up, and thinking different could work out very well.

Basically, Apple dutifully price individual tracks at whatever price the big 5 think is best - ie they roll over, ha ha. Behind the scenes, Apple go all out to build up the biggest collection of decent indie music on the planet, (not as a record label, but as the store) and when the total collection of indie music stored on their servers is at say 500000 plus tracks, then it would be time to screw the big 5 totally ie relegate the big 5 collection to page 2.
sell the independents' singles at 80 cents, albums at $8 and market the indie music offerings like crazy.

It would be a backward step in some ways in the short term, ie the bubblegum crowd would be a bit disappointed that mainstream stuff was harder to find and a bit pricey, and maybe even the big 5 would pull their collections, but with Jobs and co on the marketing job, eventually consumers would come round to the fact that there is a reason that the hippest brand in digital music is predominantly offering access to very good quality indie music that is basically little known in the market place because the big 5 has been swamping choice with their inflated advertising budgets. And the indie music would at least be sold on terms that are good for APPLE, and the artists.

In the long term there will be many artists currently tied to the big 5 who will eventually be out of contract and those mainstream artists I am sure would be very interested in going the iTMS route. So the big names would eventually be represented on itunes again in another incarnation.

 

[~Shard~]

This rumored price hike raises all sorts of intriguing concepts. First of all, to those of you saying “I’d pay $1 but not $1.25 for songs – NO WAY MAN”, all I can say is yah, I’m sure that extra 25 cents is really going to kill you. 🙄 😉 That being said, I agree in principle though – but it shouldn’t just be about the cost increase, it should be about the fact the record industry is once again getting greedy. They lose heaps of money due to P2P networks and illegal downloads, then they finally start making money again off services such as iTMS, and then what do they do? Try and make even MORE money off online music service, because of course what they’re currently making isn’t good enough. They should be thanking Jobs for being their savior, and they should be grateful that they’re actually making money, but no, they want more now.

In one respect though, it’s rather clever and ingenious of the record companies. CD sales have been hurting, yet guess what – there is a large group of people still willing to pay for music, via these online music services. So, what the record company is possibly thinking is, “let’s raise the price of the online downloads such that people will find them too expensive, not worth it, and more worth their while to simply purchase the entire CD” – for the recording industry, it’s perfect, as in their mind this might encourage (force) people to start buying CDs again, which is what they want! The music industry realizes there will always be those people who download music for free illegally, regardless, so instead of targeting them, they are targeting the ones who are willing to pay, and essentially manipulating them to get back into buying actual CDs at the record stores.

The downside of this for the recording industry however is that many people who were legitimately using iTMS et al will simply revert back to downloading music illegally via P2P networks. A price hike like this will ultimately hurt iTMS, will be sad to see.

But as for the cost increase itself, from a purely monetary point of view, there definitely exists a price point at which consumers will not be willing to pay for online music downloads. In this day and age, it seems that everything is slowly going up in price, whether it be due to inflationary reasons, other economic factors or other reasons, yet due to the nature of this service and technology, I think price hikes will have a definite negative impact on the online music service industry and people will not stand for it. A shame, too, as this industry is still in its infant stages and shows so much promise. A price hike might permanently cripple the service, which would be a sad sight to see, both for the online music service industry and Apple as well.

 

[Hattig]

Personally, I don't mind paying $1.25 for a single song. The service isn't out in the UK yet anyway, and when it is it will be 99p a song anyway because we always get ripped off. That's $1.76 in US dollars, although it includes 17.5% VAT. A fairer price would be 85p a song.

Things like iTMS will kill off singles. A single can cost between £1.99 and £3.99, sometimes higher. These are bad value, which is why sales of singles have dropped so much. Getting the song for 99p is good. Singles in store should include more value - the music video for a start. Less crap remixes too, heh.

Of course, I'd want discounts for buying multiple songs, as the processing cost to Apple goes down with a larger order. At 5 songs it should be $5 (near enough to 5 for the price of 4). Either that, or 196kbps AAC instead of 128kbps.

I *want* to support the artists. However I don't think that giving money to the RIAA to hand out is the way to do this ... if they deign to give the artists any royalties at all that is. The best way to support the artists appears to be to go to the concerts, and it is a good way to assuage any guilt over downloading the album that they would have got 10c from anyway.

 

[~Shard~]

Oh, and if they do hike the price up to $1.25 I definitely would download fewer songs from iTMS – if I could actually download any to begin with, since I live in Canada, that is... 😉 😎

 

[Peyote]

Obviously the labels got together and decided to up the prices when the contracts ran out (if this $1.25 rumor is true). However what I find interesting is that one of the labels happens to be Sony, who if I recall correctly is about to open doors on it's own music dowload service. Hmmm...just before Sony becomes a competitor, the record labels (one of which is Sony) decide to force Apple to raise it's prices. Wow...what a coincidence!

I certainly hope that if this is true, none of us go to Sony to buy music, I know I won't. I'm gonna keep buying from iTunes, because even at $1.25, it's STILL the best out there. Sony is COUNTING on all of us to start buying from Sony or other sources if the iTMS prices get raised. They want all that business, and I for one will support iTMS just so that they don't get my $.99.

 

[mrsebastian]

ah the greedy bastards are at it again... it would be quite interesting if we could unite for one month to boycott the entire music industry. no buying cds, itms, listening to the radio, watching vh1 or mtv, buying music related magazines (rolling stone), etc... though it surely wouldn't kill the industry, it would seriously hit them in the pocket book, which seems to be the only place they have any feelings. the loss in advertising dollars alone would surely commit one exec to throw himself out a window 😀

 

[shamino]

I don't believe it

I think the Post is lying. Steve Jobs may say and imply many things, but I've never once seen him flat-out lie to the public. He explicitly said that the $0.99 price isn't changing, and until I see otherwise, I'm going to believe him.

That being said, I too think ITMS costs too much.

I just ordered some CDs from the BMG Music Club. While their catalogs are full MSRP, they always have special discounts and bonusses. I ordered a 6-disc Chicago box set (105 songs) for $37, a 5-disc 80's compilation (95 tracks) for $25, and two single-disc albums (13 tracks each) for $2 each. Including estimated shipping charges and tax, the total price comes to about $97, or about $7.46 per disc. There are 226 tracks, resulting in an average cost of 43 cents per song including shipping/tax or 29 cents per song without shipping/tax.

You heard it right: 29 cents per song. For CDs, with all the liner material, purchased directly from BMG (an RIAA member.) Which is why 99 cents per song for a download (where shipping and tax isn't charged) is highway robbery. Downloads should cost less not more than CDs.

It also shows you how much you're getting robbed in stores. BMG is selling directly to me for an average price of $5 per disc (not counting shipping/tax, even though a lot of that shipping charge is profit). It costs about $1/disc to manufacture (maybe slightly more for box sets, but not that much more. So they are taking $4/disc profit from me to pay the artists and run their operation.

But when you buy those same albums in stores, you are paying $8-12 for a discount album, and $15-18 per disc for a full-price album. I think we can be certain that BMG isn't charging the stores $5/disc, or we'd see stores charging much less in order to compete with each other. That 60-260% markup (between what I pay a local store vs. what I pay BMG through their music club) is mostly going to the record labels and the RIAA-owned distribution channels.

Maybe the music industry wouldn't be losing all that money if they'd come to grips with the fact that an informed public simply doesn't appreciate paying a 250% profit margin for nothing more than a distribution channel.

 

[iggyb]

Apple Computer's argument in the trademark lawsuit filed by Apple Music is going to be that Apple Computer is filling the role of Wal-mart or Tower Records. If they did as you suggested they would be filling the role of BMG. That would clearly be within the same business as Apple Music and would almost certainly violate their trademark.

They could purchase Apple Music, and all would be well.

Of course, with that, I would fear that they would become even more neglectful of updating their computers and software.

 

[shamino]

ah the greedy bastards are at it again... it would be quite interesting if we could unite for one month to boycott the entire music industry. no buying cds, itms, listening to the radio, watching vh1 or mtv, buying music related magazines (rolling stone), etc... though it surely wouldn't kill the industry, it would seriously hit them in the pocket book, which seems to be the only place they have any feelings. the loss in advertising dollars alone would surely commit one exec to throw himself out a window 😀

Won't work. They'll just blame their lost profits on piracy and spend another billion dollars on frivolous lawsuits.

Then when the boycott ends a month later and sales come back, they'll point to the extra money and say "see, the threat of lawsuits is working."

 

[idkew]

i think the only thing to do is:

•use allofmp3.com, or P2P... for all RIAA artists
•Purchase non-RIAA artists music at regular price.


maybe we can get the artists to abandon the RIAA

 

[nuckinfutz]

The Music Industry is right to be afraid. Downloading singles faces them to confront their largest fear which is exposing the multitude of weak albums.

Today you are lucky to get 3 great songs on a CD. If I do find an album with 3 good songs then I buy the CD. If I only like 1 or 2 songs I look for singles.

1.25 for the popular songs is not a good deal. Note they are not offering to lower the price on crappy songs to under .99. Thus this is simply a way for them to defray the cost of losing album sales because their artists and creating "enough" art.

I won't stop using iTMS if some songs go to 1.25 but I will become even pickier about what I choose to spend 1.25 on.

 

[garybooberry]

This just goes to show you what record labels are all about - $

And that's fine, to an extent.

They bitched and moaned about online pirating, a solution was offered, pirating is down to almost pre-Napster levels and they want more.

One word: Duh.

 

[Doctor Q]

Because Wal-Mart, in typical fashion, probably made threats to the labels. "If you don't let us sell songs for 88 cents, we won't stock your label's CDs in our stores."

I hope Steve Jobs is telling the labels "If you don't let us sell songs for 99 cents, we won't stock your label's CDs in our stores" and hoping they don't call his bluff.

I'm hesitatnt to pay .99 for a 128 kbps song, but I'd actually buy a lot more online music at $1.25 per song if it were uncompressed. I also think Apple should allow unlimited conversions from Apple Lossless to any AAC (or other DRM) format, so you could use the lossless file as the archive and keep up with the latest codec advances. The trick would be in still limiting any copies made of the archive file to be treated as the same song, DRM-wise. So IOW you could still only have five machines registered to play any version of the original archived file at any time.

Until this is an option, I'm simply not going to empty my wallet into iTMS. When it is, I will. It still looks very very risky to me as a long-term investement. The technology is changing so fast that I'm afraid any "investment" in 128 kbps DRM files is too risky long-term. I don't want to be left out in the cold at some future date.

Exactly, exactly, exactly. $1.25 isn't so bad for a "master" of a song that I can convert to lossy formats as I see fit.

As far as pricing longer, hotter, or more valuable tunes higher than shorter, older, less valuable tunes, it would be fair, it might make sense businesswise, but it would be really really annoying for me the music shopper.

 

[benpatient]

pre-napster levels?

there are millions of people on KaZaA right now, sharing tens of millions of files.


yes, most of the files are crap, and don't work, etc, but they are there.

Look, guys, I read a report 3 months ago about how the RIAA-friendly labels were complaining about songs only being 99 cents, and that they had wanted them to be more like 2 dollars a song from the beginning, but that places like apple/napster/walmart/etc agreed to basically give between 60 and 80 cents per song to the RIAA, which then gives 1-2 cents per song to the artists...before contractual obligations.

The RIAA's price model expected apple and the rest to want to make a profit on the songs, which they currently do not. When you factor in bandwidth and programming with the RIAA-specified cost per song and cost per album, you end up at least a little bit in the red. Apple created the iTunes store to sell iPods, and that's the only reason. Why? because it costs them less than 100 dollars to manufacture and distribute that 40GB iPod so many of you are so fond of. There aren't many markets outside of diamonds where there is that sort of mark-up.

 

[toontra]

The RIAA's price model expected apple and the rest to want to make a profit on the songs, which they currently do not. When you factor in bandwidth and programming with the RIAA-specified cost per song and cost per album, you end up at least a little bit in the red.

Do you have any evidence for this?