Reader Editorial: iTunes Price Changes - Beginning of the End, or Natural Evolution? | iLounge Article

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Reader Editorial: iTunes Price Changes - Beginning of the End, or Natural Evolution?

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Tuesday, December 6, 2005
Articles Categories: Editorials

Because of continued reader interest in the topic of iTunes Music Store pricing, and developments on that subject today, we have created a new Reader Editorial as a discussion hub for your opinions. If you haven’t read today’s news yet, here’s a brief summary of what’s going on.

Over the last several months, Apple CEO Steve Jobs has been publicly challenged by certain record labels to alter the iTunes Music Store’s famous 99-cent-per-song, $9.99-per-album pricing scheme for music in the United States. Though Jobs has responded fiercely in public to such requests, there are signs that iTunes pricing is readying for changes behind the scenes. International iTunes Music Stores have already begun to adopt flexible pricing for single songs, numerous albums are now selling at prices other than $9.99, and premium-priced “deluxe” versions of albums with “extra” music videos and songs have been increasing steadily in number.

Today, there was a surprise twist to the announcement that certain NBC, Sci-Fi Network, and USA Network shows would be available through the iTunes Music Store: several offerings have skipped the $1.99 per show pricing announced by Jobs at the October launch of iTunes 6 and the fifth-generation iPod. Specifically, Late Night With Conan O’Brien is selling full-length programs for $9.99 each, and only providing 6 to 12 minute sketches for $1.99. Sci-Fi’s four-part Battlestar Galactica Miniseries is available only as a $15.99 “album? through the store, and not sold in lower-priced parts.

How do you feel about these changes to the iTunes Music Store’s pricing for audio and video? Is this the beginning of the end of Apple’s dominance of the legal market for downloaded audio and video, allowing a carefully planned and proven successful pricing structure to crumble? Or is this just a natural evolution of the legal downloading business to cope with demands from reasonable providers of content? Please share your opinions in the Comments thread below.

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Comments

1

The major music industry is a grotesque example of gluttony. Forget the recent rootkit controversy- while indies lower prices on iTunes and other online vendors for (full albums to $7.99 (because they pass along the savings on manufacturing and distribution markup to the consumer), these ivory tower bozos have the nerve to want to charge MORE for popular tracks. They aren’t doing one good faith thing to help stem the tide of file sharing.

(I also like Emusic, they offer most good indie stuff for a subscription as a DRM free MP3)

I don’t mind paying $1.99 for a iPod sized n episode of a show that I may have missed or want to watch on my commute and keep for posterity. iTunes video content certainly loads faster than a bittorrent would. But the hour long Conan “special” for $9.99… nuh uh. That’s NBC gettin greedy.

If the customers don’t feel ripped off, they’ll pay for the convenience of acquiring content via iTunes. It’s unfortunate that Apple, despite their considerable marketplace oomph, can’t dictate more user friendly terms to the content providers.

Posted by bw10009 on December 6, 2005 at 7:00 PM (PDT)

2

I’m not that big of a fan of TV to want to pay 1.99 let alone 9.99 for an episode of Conan (he’s not THAT good!).  My sense is the pricing is designed to be high to enable a foot in the water approach - if it were much lower, it might open the floodgates for downloads causing consternation among NBC Universal distributor customers (cable and satellite companies).  Broadcasters and content owners must strike a balance between taking advantage and getting used to a new channel while still protecting their existing channel. 

As for me, I’m going to hold out for when content producers go direct to iTunes bypassing the cable/satellite companies enabling me to just cancel my cable service altogether and buy only what channels and better yet only those episodes I want to see - this would be nirvana. 

I would be willing to pay a slight premium for the aggregate of all the shows/episodes I want to see above and beyond my current cable service (approx $45/month).  Current 1.99 per episode pricing is far too much of a premium.

Posted by robotaz on December 6, 2005 at 10:01 PM (PDT)

3

Well, Seeing as I live in Canada, it doesn’t really affect me. Does anybody know when (or if) Canada is going to get TV shows?

Posted by AirNJ15 on December 6, 2005 at 10:32 PM (PDT)

4

This was a 90 minute Primetime special. Think of it as a movie instead of a single episode of latenight.

Typical episode of Late Night: 42 minutes without commercials
10th Anniversary Special: 60 minutes without commercials

And keep in mind, the special was a good 80% comedy bits, while a single episode of only has 20 minutes of comedy sketches.

Also another way to think of it, this is a full length release that NBC has put out on DVD (http://www.amazon.com/exec/obidos/tg/detail/-/B0002DB5NG?v=glance)...$10.99 on Amazon.

$9.99 on iTunes you’re saving. Quit overreacting people.

Posted by edixonki on December 6, 2005 at 11:01 PM (PDT)

5

I’m in Australia where we don’t yet have TV content at the Music Store, but I agree totally with bw10009. Apple must say no to the major players in both music and TV in terms of their pricing, I’ve heard major label execs quoted as saying that offering variations of price in the iTMS is better for consumers, but this is greedy capitalist bullsh*t, one of the iTMS biggest stengths is its across the board pricing (this is breaking down even with music. In the Australian store standard album price is $16.99, but some are $17.99, I can deal with that for now).

I don’t really care so much for TV content, but if this happened to music any more than it already is, the iTMS would be no better than any bricks and mortar chain store, where you ignore the populist major label overpriced stuff and hunt for bargains or specials.

bw10009 is also right in describing this stategy as gluttony, because it’s the major labels, those who make the most money, who have the highest prices. Indie labels generally keep their prices lower, which lowers their profit margins, but rewards the consumer for buying the music and ensures that more music is bought than shared.

If the music industry as a whole wants to wean people off illegal file sharing, they need to quit their greedy practices and offer fair and consistent pricing. The iTMS was revolutionary and became so popular because it did this in the US when it opened in 2003. Don’t screw it up Apple.

Posted by Nuke666 in Melbourne, Austalia on December 6, 2005 at 11:21 PM (PDT)

6

Didn’t anyone notice that the higher-priced content is more than simple episodes. For example, as Edixonki was saying, this is a Conan 10th Anniversary special, not an everyday episode. Plus, Apple has to appease the networks by not cannibalizing sales of their DVD products. Battlestar Galactica is a good example of this: the miniseries, on DVD, would cost around $20 - $30, right? So they priced it accordingly, almost in a way saying, “Pay a little more for the DVD if you want the quality, but keep the download option in mind.” If given a choice between a $16 download and a $25 DVD, I’d have a tough choice on my hands, which is just what the networks want. But make it a choice between a $1.99 download and a $25 DVD, and I’ll take the download, no matter what the quality. Apple probably negotiated long and hard on the price points before the networks felt satisfied.

Posted by Macobyte on December 7, 2005 at 8:26 AM (PDT)

7

I usually have classes on Wed nights and I don’t own a VCR or Tivo. So I use my ipod video to download my favorite TV series “LOST” episode that is usually available the next day after it gets aired @ ABC. $1.99 per episode is not bad as I can watch it anytime and without commercial and can replay it anytime. I simply love this feature from iTunes.

Posted by TheEye on December 7, 2005 at 9:43 AM (PDT)

8

i like this because i dont get htese shows here, and i have the dock and S-VHS cables to watch it on TV so i am 110% Satisfieds from this, and as mentioned before, it makes sences that a 60 min. special wouild be ten bucks

Posted by jitaroo on December 7, 2005 at 11:38 AM (PDT)

9

TheEye, you can afford iPod video, but not a VCR player, which costs much much less???

I do agree with you though about how nice it is to have commercial free episodes of Lost.  I do not have iPod video, but I did buy season 2 episodes to ‘catch up’ with the series (I bought season 1 on DVD set, then season 2’s 8 episodes…then watch tv from then onward).  smile

Posted by Jing in USA/Singapore on December 7, 2005 at 11:55 AM (PDT)

10

$1.99 for a full length TV episode for LOST isn’t bad. A little more then I would like to pay, but I’ll deal with it. I do refuse to pay $1.99 for a 2-5 minute video though. That is way too much for the short content. $.99 for music videos would be better. There is no way I will pay $9.99 for a TV Special. As posted above, you can by the DVD for $1 more. I would be more inclined to buy the DVD at the store then buy it through iTunes. It would give much clearer detail and better 5.1 sound options. I could then make my own conversion for my vPod.

Apple, NBC, ABC, Etc…should be paying attention to this thread and lower their prices on content or lose what customers they think they might have. Lowering the prices will allow, and make, more people interested in downloading the content. The providers would make more money on selling shear volume of sales then they would on selling less at higher prices.

Posted by rivertrek on December 7, 2005 at 12:51 PM (PDT)

11

It’s definitely too expensive.  I am the prime target for the new video initative—I don’t have cable because I only want to watch maybe three programs per week, and it wasn’t cost effective.  However, at $1.99 per half hour for lower-than-broadcast-res video, it’s still not cost effective.  It’s obvious that’s a real introductory, test the water kind of price, the kind that will make the executives signing on to these kinds of deals less worried about the perceived risk of putting shittier-than-DVD, watermarked and compressed video into the hands of consumers.  It is not the price that will solve the problem of 430,000 downloads of Battlestar Galactica, or of falling advertising revenues, or of cancelling brilliant, acclaimed shows people want to see just because they can’t stand up to the audience of football.

Posted by dasmegabyte on December 7, 2005 at 1:04 PM (PDT)

12

I find $1.99 for a five minute sketch a little excessive.  Conan O’Brien is very funny but it is not worth it.  I would rather spend the two dollars for an entire episode of something else (Lost, Monk, etc…).  Until they provide them at a reasonable price, I know I won’t be purchasing them. 

Others may disagree, but that is my opinion.

Posted by ClarkPod in Delaware, Ohio on December 7, 2005 at 2:10 PM (PDT)

13

An absolute rip-off in my opinion. And if TiVo manages to successfully implement TiVoToGo transfers for the video iPod, it’s completely useless. I was already especially not fond of the idea of paying $1.99 for a 4 minute music video that was FREE just a few months ago. Music videos have always been advertisements and marketing tools for records companies to sell CDs and now all of the sudden they’re a revenue stream? WTF? $1.99 for a Lost episode might be worth it if I missed it and I’m desperate, but in that case, half hour shows ought to be $0.99 and a 6 minute skit should be $0.25! Yuck. I don’t need videos on my iPod that badly; I’ll add my own clips from my DVD collection and download stuff from free sites out there. iTunes and NBC can go eat it.

Posted by DiscountSounds on December 7, 2005 at 3:18 PM (PDT)

14

Living in Sweden, downloads of TV shows have yet to come. While I think that $1.99 might be OK for the latest episode of some hot TV series, one should be very careful when deciding on a pricing policy for other video content. This product would often compete not only with DVDs but also DVD rental. One should also consider that many DVDs have a substantial second-hand value. When you have finished watching a TV series season on DVD you may sell it and typically get back at least half the money paid.

Posted by Galex on December 8, 2005 at 2:30 AM (PDT)

15

I think that $1.99 for an episode of Dragnet, Adam 12 or Hitchcock is just fine. I loved them as a kid and now they are even better.

Posted by JeffNNJ on December 8, 2005 at 10:42 PM (PDT)

16

The iTunes prices are too high. The iPod Video is a novelty, and I suspect that’s why video sales have been so high; it will be interesting to see what happens over time.

For me, there is quite a difference between the value of a music download and the value of a video download. I have many, many songs on my iPod that I will never tire of hearing. But really, even if I were willing to pay $1.99 for an episode of “Lost”—which I’m not—how many times would I want to watch it?

I purchased one music video from iTunes just to see how it would look and sound on my iPod. Looks and sounds great, but I’ve only watched it twice over the past several weeks and may never watch it again. Doesn’t seem worth the $1.99.

Video content will have to become much more diverse and pocket-friendly before I start parting with my hard-earned $$$.

Posted by Waynewrite in Kansas City, MO on December 9, 2005 at 9:00 AM (PDT)

17

I would pay 99¢ however the current pricing scheme of $2.29 in Canada disgusts me.  Especially when the enjoyment I get from an episode of TV will last only one viewing of that show, I will likely never revisit it and watch it again.

Iggy :(

Posted by TheIguana in Calgary, Alberta, Prarires, Canada, North America, on December 9, 2005 at 7:11 PM (PDT)

18

I feels that this is just showing every one the real face of the record cumpenies - the greedyness will bring them to there doom - and ppl we’ll go back to file share…

Posted by LinkTree in IL on December 10, 2005 at 1:48 AM (PDT)

19

I don’t have a iPod photo, and I’m still rather amazed that anyone would pay for free TV.  I mean Lost/Conan all come on TV over the air. 

Why pay?  I don’t watch alot of TV, but 90 hours a year seems reasonable.  I could see paying for cable TV content, like Te Sopranos, 6ft Under or Battlestar Galactica, but free TV…?

  I assume everyone has a TV already.  After 90 $2 shows, you can have a DVD Recorder or a dying breed of VCR.

Posted by silvius on December 10, 2005 at 9:42 AM (PDT)

20

I have bought each of the LOST episodes from season 2 as they have aired.  I have even bought 1 or 2 music videos.  I was interested in purchasing some of the NBC content, but the pricing is not in line with what I believe it is worth.  At $9.99 for an episode of Conan, iTunes should at least provide a service like Audible.com where I can log in and re-download any content I have legally paid for.  Even then, I don’t believe the price is worth it for a lot of this content.  I pay for DirecTV and can record most of this content for free onto my Tivo, copy it to my computer and convert it to my iPod format.  $1.99 per episode was worth it for the convenience.  $1.99 for a 10 minute sketch is not.  $9.99 for a one-hour TV is definitely not.  The video content providers need to wise up or they will go the way of the record companies and users will stop purchasing their products.

Posted by nerothedog on December 10, 2005 at 9:43 AM (PDT)

21

This is not different than anything else - if people will pay for the video, it will stay exorbitat - if not, it’ll come down…god bless the free market…

Posted by Glen in fort lauderdale on December 10, 2005 at 10:31 AM (PDT)

22

because i dont have a 5g ipod im not too worried about the video prices. even if i had video capabilities, i wouldnt use them. however, i do think that it will only take apple a month or two to figure out that higher prices arent worth it. hopefully, by then they wont be so deep in trouble that they cant lower the prices again.

if they try to up the song and album prices… thats gonna get ugly. ill just go back to pirating music. at the momment, im proud to say that all 3000+ songs on my ipod are legal. if the prices go up, thats gonna change though. i think a lot of people agree with me on that.

Posted by FODzilla in Edmond, OK on December 10, 2005 at 12:21 PM (PDT)

23

To be honest I think that $1.99 US or $2.29 Canadian for a Full TV show that airs an hour with commercials isn’t that much to ask for. Say there is 24 Episodes in a Season and you pay 1.99 each thats $47.46 for the entire season. Now don’t get me wrong some are going to argue that you can buy the DVD set around that price, which you can the next year, (and you get the actual DVD and Artwork that comes with it) that main thing you are paying for in that instance is the convience of being able to get it now. And by now I mean the next day without having to wait the year for the DVD. Convience Costs money right?

But I don’t get the fact that a 3-5 minute video can still cost the same as a 45 minute tv show of lost.

With the song pricing changes, lets be realistic for a second. It’s not like they are saying that they are going to raise the price of every song that is available. Seems to me that they are going to make the hotter or more popular songs more expensive then the less popular songs. Meaning that on an album of 12 songs you would say get the whole thing for $11.99 or oyu could download certain songs for different prices. So for example an artists cd songs that are going to be singles could be priced at $1.49 and the other filler sngs on the album be priced ar $0.79 per song.

Record companies are just looking at the fact that if a song is a radio hit, why shuold it be the same $.99 as a song that was added to the album as filler? In a sense it is greedy but if you have issues then go buy the cd to support the artisit and then upload the songs. Your more then likely going to burn the itunes songs to a cd anyways right?

Posted by milldawg on December 10, 2005 at 6:25 PM (PDT)

24

man thats insane
who would pay 10 bucks for an episode when it can only be played on a two inch screen
oh i forgot you can put it on your tv too, but it comes out all weird because of sizing
i know i won’t pay that much though

Posted by CLC on December 10, 2005 at 6:28 PM (PDT)

25

Hi.
First I have to say how very much I have enjoyed listening to ilounge since I found the pod cast about three months ago.
I have to tell you that I live in Germany at the time of writing, and my Germany is OK as far as reading and understanding (spoken word) go’s, but I prefer the English language for reading and listen privately, I receive the news and emails from Apple USA. (In English)
I received an email from Apple QuickTime (US). which had some advertising for itunes, one of the ad’s was for Diana Krall the new Christmas album and there was a free download offer for the song Jingle Bells, and as I am a fan of M/s. Krall I thought why not. I will give it a try. (first time buyer from itunes, I have not had my ipod too long, about 3 months)
After the double click I was told that this is the first time this computer had tried to buy anything from itunes so I was asked which country the credit card billing address was, I told itunes; “Germany?, 
I was then moved over automatically to the Germany itunes to the entry for Diana Krall Christmas album, there I was disgusted to see that there was not a free download.
If I wanted the song it would cost me 0,99 Eurocents, which is OK, but free to someone in the USA. but here in Old Europe we have to pay, some what UNFAIR.
Which fits just right in too your article about pricing in itunes
The music company’s want to increase the prices, but Macintosh can not even get a prices in itunes that’s the same over the world.
I am paying here in Germany a lot more than you in the US for the same song. And I would even pay more than the itunes in the UK. THAT IS VERY UNFAIR.
Why should there be four different prices for the same song, which probable come from the same server
Look at the exchange rates USA: $0.99 = €0.83 ..... UK:  £0,79 = $1.38 ..... Euro: €0,99 = $1.17,
Why is there the different between itunes USA. and itunes everywhere else after all the credit card company’s money is the same all over the world.
It seems as if there is a form of exchange rate HIGHWAY ROBERY GOING ON.
63065-anglo

Posted by 63065-anglo on December 11, 2005 at 5:37 AM (PDT)

26

You will buy Jay Leno for 10 bux or so when you need to ... say… when you are stuck overseas and have a broadband connection maybe… otherwise… this will figure itself out. competition and all. As for overseas, dont care much that Japan music is higher priced per song… it is cheaper than their new cds by a longshot. Also, I wanted it so found a giftcard online and paid via paypal. I figure that is available for the u.s. store also for those wanting to buy through u.s. - ebay and all.

Posted by vr2nr on December 11, 2005 at 10:11 AM (PDT)

27

Living in Denmark, Europe, I am saddened to see that the high prices for our own local artists are keeping the majority from buying danish acts, since foreign acts cost less.

And therefore it saddens me to see that the Record (CD/plastic disc) Industry is succeeding in driving up the prices again. This only means that you are driving the customer back to P2P file sharing - and everybody looses.

Steve Jobs could have been the savior of rock and roll hmmm

Posted by Kirpus on December 11, 2005 at 2:37 PM (PDT)

28

I don’t believe that prices are the only problem.

However, to discuss price, as soon as the price of an individual song becomes higher that buying a CD, I will refuse to buy online.  In other words, we know that an average CD is about 12 songs and costs about $15. That’s about $1.25 a song. Once I have to pay more than that, nevermind.

This is my other issue, though. I won’t pay money for a song that is only 128k - period. I won’t pay for any song encoded less than 320k. I want CD quality. Once I download the song I can burn it to a CD, or re-encode it at a lesser bit rate to save space. I have options that way. If it starts at 128k, there are no quality options.

I doubt that, in the end, we will see either thing happen. Prices will eventually go above $1.25 a song, and I have yet to see (doubt I will) an online music service that allows 320k or better downloads. Because of this I will continue to turn to other sources to get music. That’s too bad.

Posted by IBnotRich on December 12, 2005 at 9:39 AM (PDT)

29

Who would pay for such crap?! Haw haw if you do what a joke.

Yeah I have a 5G but I rip all my own stuff with Handbrake, or just down load using BitTorrent via a Torrent file. It’s all FREE!!! If you pay for that crap in stupid iTunes you are a goober dufus so, so what. By the way Apple is as lame and Greedy as the next Corp. Just as bad as Microsoft IMO. I would like to think that Apple is better but the more money they make the worse they become. When I bought my first iPod a long time ago it came with a power adapter and dock etc.. Now Apple calls these items accessories!
That is total BS, hey Apple bite my balls!!!

Posted by Cletus inmyballs on December 12, 2005 at 12:37 PM (PDT)

30

I think that Itunes 6 should not lower there video prices but I do think they should lower there single song prices ITS Rediculous!! I think that they should at least lower single song to 50 CENTS! I mean if someone wanted to fill up there Ipod it would be 7,500 BUCKS if you had a 30 GB ipod and only bought single songs!!!  SHEESH!

Posted by Whitley Bales on December 13, 2005 at 3:19 PM (PDT)

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