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Suggestion to Apple: Knock iTMS prices

S

StarbucksSam

macrumors 65816
Original poster
Nov 21, 2004
1,433
5
Washington, D.C.
I think that it would be GREAT for Apple's business if they knocked iTMS prices in the US from $.99 to $.69 for just a month. I'm not saying they should KEEP it there, but it would do what the Pepsi thing did - get people hooked. I never even CONSIDERED using iTMS before the Pepsi promotion where I got free ones, and now I buy LOTS OF SONGS from the store online. Promotions like that get people interested, so maybe thirty cents off would do the following:

A) Increase sales for the month at the very least to the point where the profit margin would be equal to the $.99 prices or exceed it for a month because of sheer volume.
B) Undercut the competition for a little while.
C) Get people to try it and get hooked. Do we need a Surgeon General's warning?
 
they would have to do special advertisments to make sure people KNOW that this is not a regular price, if they did something like that. for example "Holiday Special" or maybe gave discounts on gift certificates for the holidays. ie: 7.99 for 10 songs or something like that.


anyone know what the latest download count is up to? and the # of songs in the archive?
 
StarbucksSam said:
I don't think Real ever took off in the first place. iTMS did.
Click to expand...

Exactly. I don't think a small price reduction is such a big deal, $0.99 is pretty cheap. The magic of the Pepsi deal was the exposure and the that it allowed people to download free songs to see how it was done and how it worked. This allowed people to get a 'feel' for the iTMS, the type of people who would never have considered downloading music. A lower price would encourage current users to download more songs, not encourage new users who have never downloaded a song before.
 
The problem is is that Apple does not control the prices - the record companies do. Apple only receives like 5-10 cents for every sale. It would be up to the record companies to lower the price, and we all know they will never do anything to lower their cash flows :rolleyes:
 
StarbucksSam said:
A) Increase sales for the month at the very least to the point where the profit margin would be equal to the $.99 prices or exceed it for a month because of sheer volume.
Click to expand...

Only problem is that Apple is only making a few pennies per song as it is. iTMS doesn't make money, the iPod is where the cash comes in. By lowering the price to 69 cents, Apple would be losing around 10-20 cents per track.
 
I like volume discounts better than a temporary discount, reward the people who are buying and lure people into buying more.

Say for every 5 you buy, get one free kind of thing. Not necessarily in one order, but over time.
 
stoid said:
Only problem is that Apple is only making a few pennies per song as it is. iTMS doesn't make money, the iPod is where the cash comes in. By lowering the price to 69 cents, Apple would be loosing around 10-20 cents per track.
Click to expand...

Curious why you would think they lose that much? Edit: That was revenue not profit....

Their bread and butter is still their computer hardware sales (almost 60% of revenue).
 
kingjr3 said:
Curious why you would think they lose that much? Edit: That was revenue not profit....

Their bread and butter is still their computer hardware sales (almost 60% of revenue).
Click to expand...
On which planet can you the price by $0.10 on each sale and but not decrease profit by $0.10 on each sale? Please explain this wonderous new mathematics to those less talented among us.
 
I'm still waiting for an option on bit-rates. I'm hoping that they introduce 160kpbs at $.99 and drop the 128kps to $.79.

Not counting on this though.
 
virividox said:
what they need is to standardize the price across all their stores
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Most people are only qualified to buy from one store, so prices of tracks at other stores doesn't really factor. There is no real benefit to be had from standardisation on prices, especially when you factor in the confusion arising from different currencies.

The only scenario where a standardised price would be beneficial if there was to be a single iTMS (copyright issues etc. aside). But personally I like the set up as it is, I know in reality the local content of each store is minimal but it's still better than a one large homogenised store.
 
virividox said:
what they need is to standardize the price across all their stores
Click to expand...
They cant do this. The price of the track is controled by the right owners. Thats why CDs in UK are more expensive than in US which are more expensive than in Canada. This is very stupid but its the foundation of editing and distribution in a world wide market.
 
There's not much reason for them to offer a sale to attract customers when the iTMS is already far-and-away at the head of the market. Why take a loss on cut-rate song prices (because they still have to pay the record companies the same amount) when they're selling just fine at the current level?
 
rueyeet said:
There's not much reason for them to offer a sale to attract customers when the iTMS is already far-and-away at the head of the market. Why take a loss on cut-rate song prices (because they still have to pay the record companies the same amount) when they're selling just fine at the current level?
Click to expand...

They might be way ahead of the market but at the moment it's a very small market. The online music industry is very much in its infancy and there are lots of potential customers out there, which Apple needs to attract. Resting on your laurels is never good practice for any business.

Just playing devils advocate really, I don't think slashing prices is the way to go but neither is the attitude that iTMS is invincible. It'll be interesting to see how Apple capitalises on its dominant position and how the online music grows, how it will combat piracy and the battle between subscription and a la carte.
 
rueyeet said:
There's not much reason for them to offer a sale to attract customers when the iTMS is already far-and-away at the head of the market. Why take a loss on cut-rate song prices (because they still have to pay the record companies the same amount) when they're selling just fine at the current level?
Click to expand...

Because business is incredibly competitive and this theory has put many companies in the red.
 
sigamy said:
I'm still waiting for an option on bit-rates. I'm hoping that they introduce 160kpbs at $.99 and drop the 128kps to $.79.

Not counting on this though.
Click to expand...

I too believe that they should give options on the bit-rates of the songs you buy. Hopefully the AAC-Plus does sound better and you can encode at 96kbps instead of 128kbps.

Here is what I'd like to see them offer(assuming AAC-Plus is good):
-96kbps AAC-Plus - $0.79/song - $7.99/album
-160kbps AAC-Plus - $0.85/song - $8.50/album
-224kbps AAC-Plus - $0.95/song - $9.50/album
-320kbps AAC-Plus - $0.99/song - $9.99/album
-Apple Lossless - $1.05/song - $10.50/album
-Full CD Quality - $1.09/song - $10.99/album

I would buy a lot more from iTunes if I had these options. I encode at various bit-rates depending on the artist/song and how much I like/listen to that artist song. There are songs on iTunes that I'd like to buy but are not worth $0.99 to me.....and there are songs on iTunes that I'd like to buy but the 128kbps AAC encoding is a lesser quality than I'd like.
 
MisterMe said:
On which planet can you the price by $0.10 on each sale and but not decrease profit by $0.10 on each sale? Please explain this wonderous new mathematics to those less talented among us.
Click to expand...

Decreasing profit 10-20 cents is not the same as a 10-20 cent loss on a song, unless you are making the assumption that someone would have bought the song at either price point. The poster my comment was directed was implying the break even price is in the neighborhood of 79-89 cents and that selling at 69 cents is a 10-20 cent loss. I think the break even is actually lower and that by decreasing the price to $.69 Apple would still turn a profit, meaning that they wouldn't "lose" 10-20 cents on that song unless the buyer would have bought at full price.

For example, lets say the profit is .50 per song and they sell 1 million a month. Total profit is 500,000. Reduce price to .69 and now profit is only .19, but if that increases sales to 5 million a month, they make 950,000 in profit.
 
Jovian9 said:
I too believe that they should give options on the bit-rates of the songs you buy. Hopefully the AAC-Plus does sound better and you can encode at 96kbps instead of 128kbps.

Here is what I'd like to see them offer(assuming AAC-Plus is good):
-96kbps AAC-Plus - $0.79/song - $7.99/album
-160kbps AAC-Plus - $0.85/song - $8.50/album
-224kbps AAC-Plus - $0.95/song - $9.50/album
-320kbps AAC-Plus - $0.99/song - $9.99/album
-Apple Lossless - $1.05/song - $10.50/album
-Full CD Quality - $1.09/song - $10.99/album

I would buy a lot more from iTunes if I had these options. I encode at various bit-rates depending on the artist/song and how much I like/listen to that artist song. There are songs on iTunes that I'd like to buy but are not worth $0.99 to me.....and there are songs on iTunes that I'd like to buy but the 128kbps AAC encoding is a lesser quality than I'd like.
Click to expand...
Actually, I would think this would confuse people especially for those who have no idea about AAC-Plus and about bit rates. For example, if you called it Apple Lossless, why would Full CD quality cost more than it? That would mean that it is no longer lossless, right?
 
angelneo said:
Actually, I would think this would confuse people especially for those who have no idea about AAC-Plus and about bit rates. For example, if you called it Apple Lossless, why would Full CD quality cost more than it? That would mean that it is no longer lossless, right?
Click to expand...

The options would not necessarily be targeted at those who would be confused by them....perhaps a standard bit-rate (like the 128 AAC now) with the option to go in and select another.........for those of us who care about audio quality and are not confused by it. A lot of people probably do not buy online b/c the quality is not equal to CD. Lossless is not full CD quality.....if it was it would be full size.........it's as close as you come to sounding like full CD quality.
 
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