Their store, their distribution point. They can sell for what they want, and the labels can join or stay out.
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Warner Music Considering Not Renewing Long-Term iTunes Contract
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Their store, their distribution point. They can sell for what they want, and the labels can join or stay out.
I don't think the music companies can collude and all pull out of iTunes as that would violate antitrust laws. But one of them can play a game of chicken and pull out on their own and hope the others follow. If that happens, Apple would have a serious problem on its hands.
I think the more likely scenario is that the music companies will continue to force Apple to sell DRM tracks while letting others sell them DRM-free. This ploy won't have any impact as most people never run up against iTunes DRM and probably don't even know it exists. Plus Apple can still increase the quality of DRM tracks to 256K to better compete.
I think you should evaluate the over simplicity of your responses. If apple distributes for Warner, EMI, Sony and others. What does kind of deal do you think these companies are going to barter with Apple when Apple the record label uses iTunes to push Apple's artist to the number 1 slots?
And if those labels leave Apple what kind of choice for music will iTunes be left with? Apple artists? you can kiss the success of iTunes goodbye if that happens.
I don't understand why people point fingers at the labels.
It is the retailers that raise CD prices. cduniverse.com is a prime example. They mark their prices up more than 30% the RRP.
Other retailers follow the same pattern, and soon you have to pay higher prices. It is the discount stores like Wal-Mart that fight to lower price standards set by specialized retailers like Tower Records.
The record labels don't receive any of the mark ups set by the retailers. Knowing where to shop is a key to not getting ripped off.
HMV is one of the best retailers you can buy stuff from.
iTunes is already going DRM free - and at higher quality than Amazon.
The iTunes app is much more optimized than a web browser for browsing and searching for music, playing previews, etc.
iTunes is much nicer for purchasing - you purchase the song and it's instantly in your music application and syncs with your iPod next time you connect it. A web browser can not do that.
You'd have to be some kind of masochist to think a web browser is better for browsing and buying music than an app with features developed explicitly for that purpose.
I find it comical that the music companies keep falling over their own feet when it comes to digital distribution of music. Apple (computer company) single handedly saved their asses by creating an electronic distribution model that ushered in the legal way to download music. These guys are a train wreck waiting to happen, and should thank their lucky stars that a computer company helped them make millions of easy dollars without them(music companies) doing a damn thing...
Actually, the labels can set a MSRP on it and if they feel that Apple is selling it at too much of a discount from that, then they should definitely leave the store. I think the labels' biggest issue with Apple is the flexibility especially with regard to newer releases vs. older releases. I mostly listen to older music so it kind of annoys me when I see older songs being sold for the same price as newer ones, even if the album price is much lower. And mind you, I'm not talking about Bob Dylan or other classic artists like that, I'm talking about random "filler" songs by the likes of Guns N' Roses. By all means, if a song is incredible and really popular even if it's old, then sell it at a higher price. But if it's just some random album track that was never released to radio? $1.08 including tax is too much unless the song is longer.
Don't forget that the iPhone and iPod touch both now support ITMS. Overnight, this added over a million devices who are able to browse the store and buy music remotely. This has and will continue to greatly increase "impulse buying" of songs. I've already purchased a few this way. That's value add for the ITMS that the others don't have.
I imagine that this might be one of the unspoken reasons why Apple is dragging its feet on the SDK for the iPhone. Once it's released, it will only be a week before Amazon and others begin releasing iPhone applications for their music stores.
I imagine that this might be one of the unspoken reasons why Apple is dragging its feet on the SDK for the iPhone. Once it's released, it will only be a week before Amazon and others begin releasing iPhone applications for their music stores.
True. However, a store that has nothing to sell will go out of business pretty soon.
Don't kid yourself. 90% of the people buying the Touch or the iPhone already own iPods to begin with and are already iTunes customers. The Wi-Fi iTunes Music Store, on the other hand, has a ton of potential. Perhaps this is what you were trying to refer to? The Wi-Fi store will give people plenty of chances for impulse buying, which I think is far more likely when you've got a small device in your hands instead of a computer. You tend to think things through more when you're on the computer.
Mo Money
I think what is happening now is that the music companies want to cut out the "middle man". Probably when they were first were approached by Apple on allowing legal digital downloads, they were skeptical that it would actullay work, but agreed to help slow down the illegal (Napster, Morpheus, Limewire) downloaded.
When iTunes exploded, they could not believe how successful it could be. Now they want to control the pricing and stop having to give Apple a piece of the pie. The only thing I think is wrong with that thinking is that having things centralized on iTunes made it easier for people to buy music. If I have to go to one place for Warner, one place for Universal, one place for EMI, and one place for Sony, I might not buy as much. IMO. YMMV.
I think what is happening now is that the music companies want to cut out the "middle man". Probably when they were first were approached by Apple on allowing legal digital downloads, they were skeptical that it would actullay work, but agreed to help slow down the illegal (Napster, Morpheus, Limewire) downloaded.
When iTunes exploded, they could not believe how successful it could be. Now they want to control the pricing and stop having to give Apple a piece of the pie. The only thing I think is wrong with that thinking is that having things centralized on iTunes made it easier for people to buy music. If I have to go to one place for Warner, one place for Universal, one place for EMI, and one place for Sony, I might not buy as much. IMO. YMMV.
They could use an equation to determine the price. Higher demand = higher price.
Not talking about a $3 variation, more like a range from $.75 to $1.25.
People like me who loathe most popular music would rejoice.
You are incorrect. A big deal was made back in 2003 when Universal lowered their wholesale prices -- i.e., what distributors pay for the merchandise -- from the $12 they had been at (with a suggested retail price of $18), to $9 (SRP of $13).
Do you really think Tower Records watched their sales decline -- due to non-competitive prices -- and didn't lower them just... because? They didn't because they couldn't sell them for wholesale and still make a profit to run their company.
The record labels hate Apple because the a la carte system and lack of bundling is killing them. Over the past 15 years they've truly become dependent on the "2-3 singles and filler" formula for their artist's records, and have signed, developed, and produced appropriately. The a la carte system, where people can just buy what they want, is killing their profits because people, when given a choice of what they really want, just aren't buying full albums.
This is the big point they don't want to bring up, because it will reveal an inherent weakness in the product they are selling (i.e., that their full albums maybe aren't really worth buying).
Agreed, although I think anything under 1 minute long should not be charged any more than 50 cents. It's ridiculous that "intro" tracks are 99 cents + tax on ITMS and pretty much every other download store. That sucks in my opinion. It should be based on the size of the file and distribution costs (bandwidth) plus popularity.
Fifteen years? I'm surprised because many of the albums I've purchased over the last 15 years are solid throughout... the single has been dead for years; there are plenty of album-orientated artists that dont even think of releasing a single, whatever form it takes.
No, the simple fact is, is that very few acts have it in themselves to write and create a consistently strong album more than once or twice. Those that do are the big household names.
Great post.
What's so funny about this situation is that the labels used to live on singles (1950's and 1960's). Then the Beatles and the likes of Bob Dylan in the mid-60's began putting out great albums. Suddenly the entire industry switched to focusing on albums, and the 1970's saw some incredible albums from the likes of Led Zeppelin, Pink Floyd, and so on. Unfortunately, the 80's and 90's brought about the one hit wonder and thus the consumers felt ripped off because they paid $10-15 for one killer song and 10 or more crappy songs.
Well said
We now return you to your regularly scheduled hysteria.
I read the original article too. I was wondering when anyone would realize this is a non story. GOOD FOR YOU
Longer songs should cost more, eh? I guess you don't listen to symphonies, opera, jazz or Iron Butterfly, huh? Variable pricing is ludicrous -- setting a single, easy to remember price is best for the consumer and creates a uniform, predictable experience.
Subscription services have show time and time again, that people don't like to rent music. The brilliance of the iTunes/Amazon type system is that once you've plunked down your money, you can do want you want with it -- burn it to CD, put it on a PMP or listen on your computer.
Actually, the data released by Apple and NPD shows that 40-50% of iPhone purchasers didn't already own an iPod.
Mustang, actually I do listen to quite a bit of longer stuff. I consider anything 8 minutes or longer to be pretty long, which is why in that case you might as well buy the frickin' album itself. Pink Floyd has some songs that are ridiculously long, Led Zeppelin has some live stuff that is ridiculously long, and I have no problem if they sell it at a higher price point. All songs were not created equal. You cannot sit there and say that a 25 minute long song should cost the same as a 4 minute song, and you can't say that a 4 minute song should cost the same as a 20 second one.
I believe subscription services would work if Apple did it. What you have to understand is that most of the people who use subscription services go out of their way to find them. Apple has a monopoly with the iTunes store and draws a ton of casual users. I think people love using iPods, and if you used the same DRM as FairPlay with obviously no burning rights, then it becomes a great option for people. You would STILL have the option to buy songs or albums, perhaps at a discounted price for having the subscription. There's nothing wrong with giving the labels and the consumers some flexibility.
As for the iPhone, thanks for the correction.
I believe subscription services would work if Apple did it. What you have to understand is that most of the people who use subscription services go out of their way to find them. Apple has a monopoly with the iTunes store and draws a ton of casual users. I think people love using iPods, and if you used the same DRM as FairPlay with obviously no burning rights, then it becomes a great option for people. You would STILL have the option to buy songs or albums, perhaps at a discounted price for having the subscription. There's nothing wrong with giving the labels and the consumers some flexibility.
As for the iPhone, thanks for the correction.
honestly if Amazon emerges in a better position to garner more of the market so be it. But the truth still stands that the iPod is a sound piece of electronic equipment and other manufacturers have not quite been able to come close to replicating it. Perhaps that may change in the future, but the lessons of economics and of the marktet place is that you have the in a direct position to control the content/product you wish to sell to the masses. Apple is the driver of the hardware, MS, and Amazon are not.
We see both these companies trying to build their networks with Samsung, Panasonic and others to bring the hardware side to their plan. By the time they get a good player out there, Apple will have had that much more time for R&D to have developed major improvements to the current iPod that it will continue to dominate.
Nobody would have taken any notice of the Zune whatsoever if it hadn't been produced by Microsoft. And it sells in a distant fourth place.
To put it into perspective: If Apple had announced a new iPod, and the result had been the Zune, there would have been enormous disappointment on MacRumors.
Really, I don't see any difference buying music than buying anything else. I don't shop for electronics at one store. I don't buy food from one restaurant.
Itunes could be re-written to access amazon store, universal's store, sony's store, etc. etc. You would then select the store and download the music that you want. The interfaces might not be as consistent and you would have to deal with mp3 vs aac etc. but it wouldn't be a big deal.
Apple will still sell their ipods and itunes would still be the key tool to manipulate content on the ipod.
Actually I'm not, the major record labels sign thousands of musicians throughout different divisions, and then sub-divisions who are in cooperation with indie labels, throughout many nations.
I know a few distributors right now, If I started a business, prices for original pressed CD's are around US$3.99-US$5.99 depending on your distributor. Non localised artists are higher priced.
This, dependent on 2-3 singles filler stuff is nonsense.
If you don't know where to find the talented modern musicians you would like, or where to buy CDs without getting ripped by the merchants, then thats your problem.
Steve Jobs even said most people purchase the whole album from the iTunes store. Don't blame it on the record labels. My guess is that the labels are likely thinking, why are we paying Apple for this?
They are likely starting up their own online digital music store, considering Sony has had a successful digital store for many years.
Why pay Apple anything to do it, when it is easier to do it yourself?
Where is my thinking coming from? 4 years of international relationship and business studies focused on the music industry, and Japan.
Because you would need to pay Apple some of the profits.
It is an unnecessary expense.
Thank you; someone speaking with some sense and experience, rather than people parroting the same lines they've heard others say elsewhere without thinking things through.