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Mix: Record exec, iPod weddings, Creative Technology, STINKR

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By LC Angell

Contributing Editor
Published: Wednesday, September 21, 2005
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Following Apple CEO Steve Jobs’ remarks on iTunes pricing yesterday, an anonymous record label executive told MTV that there’s a simple explantion for Jobs wanting to keep the prices at 99 cents: “It helps him sell iPods. When he started iTunes, he broke through that psychological barrier that consumers had and made a lot of dough doing it, but it seems like he has a monopoly and he’s become the Wal-Mart of the Internet, and he wants to retain that monopoly.”

CNET has a report on the growing number of couples who are turning to iPods to handle the music at their wedding receptions. “What could be easier?” says Lori Leibovich, editor of IndieBride.com. “You bring it, you program it, it sounds great. It doesn’t surprise me at all that more people are doing it.”

Business 2.0 reports that Creative Technology plans to shift its marketing focus from its MP3 players to its PC sound card line. “Creative made lots of noise last November, when it unveiled two new MP3 players that it predicted would help it take 40 percent of the global market this year. But, analysts say, despite spending about $100 million to promote its MuVo and Zen models, the company’s market share is still around 10 percent (compared with Apple’s 70)... Tellingly, Creative has begun shifting its promotional efforts toward its new line of sound cards.” [via MDN]

In yet another bad review for the Motorola ROKR, Fortune’s Peter Lewis writes: “The most inexcusable failing of the ROKR is that for all the anticipation, many of its features do not work as advertised. Doesn’t anybody test these things before selling them to the public? The ROKR software is sluggish and clunky, and transferring songs into the ROKR’s memory is so slow—even on a dual-processor Apple Power Mac G5—that I was almost glad of the 100-song limit.”

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Comments

1

Major record company executives are such greedy little fools. If they made better albums and developing talent instead of serving up drivel, maybe there’d me more success like Coheed & Cambria.

Posted by bill on September 21, 2005 at 8:39 PM (PDT)

2

How homorus -  a record company saying someone has an monopoly! Ask what indie musicans think of record labels who are tryng to get there music onto the radio and then see who has an monopoly!

Posted by BOOO on September 21, 2005 at 8:43 PM (PDT)

3

The thing these idiots in record companies don’t get—and I HOPE TO GOD SOME PEOPLE FROM SOME RECORD COMPANIES ARE READING THIS RIGHT NOW SO THEY CAN GET A CLUE—is that it doesn’t matter how fat it makes Steve Jobs’s wallet. It helps him sell iPods? SO WHAT! It’s supposed. These idiots are making money without having to produce a physical CD. Less production costs, more profits. Steve Jobs wants to maintain a monopoly? Who wouldn’t? Like these jacka$$e$ in the record industry wouldn’t try to make a monopoly on music if they could. As it is, $.99 is a little too much to pay music, but it is slightly manageable so I’m okay with it. Any higher and I’ll go out on the street and advocate a return for everyone to P2P Music Piracy. #### the RIAA. #### the greedy record companies. It IS greed, like Jobs said. Jobs doesn’t need to change his tune, these record execs do. He’s making them more money than they were making just a few years ago when many people were just TAKING their music for free. And now, since they’re going in with Gestapo tactics and trying to sew up the cracks, so to speak, and prosecute everyone who trades music, they think they’ve got the monopoly. They don’t. Nothing screws up a business more than pissing off the customers, and in actuality we are the CEOs of these record companies. WE keep them running with our money. If they try to push higher prices (or try to get around the whole thing by insisting that yes prices may stay at $.99 per song, but no longer will people be able to buy individual songs, they’ll have to buy whole albums), we should ALL go back to boycotting the record labels and trading music. These idiots don’t realize that they’re lucky to be making money as it is right now. We DON’T have to pay. Buying the music is VOLUNTARY. We could be downloading for free. They need to get their heads out of their a$$e$ and realize that WE call the shots; they don’t. Just a suggestion.

Posted by Jack on September 21, 2005 at 8:47 PM (PDT)

4

iTMS the Wal-Mart of the internet? 

God help us….

.99¢ is the magic number.  It’s the perfect price point.  That’s why Steve and Co. want it to remain so.

Posted by Cameron Talley on September 21, 2005 at 10:11 PM (PDT)

5

iTMS doesn’t sell iPods.  iPods sell the online music, and very little of it at that.  If you take the ~500m songs sold and divide by the ~25m ipods sold that’s going to be roughly 20 songs per iPod.  Do record execs think that the novelty of buying a couple of cds worth of locked music through a online music store at an average rate of less than one song per month per iPod owner is really the driving force behind iPod sales?  Well, it’s either that or the tiny size, long battery life, easy to use interface, and sheer status of owning one.  Oh, it must be the locked music file thing.  No one is stupid enough to buy that song and dance.  Frankly it’s insulting.  The iPod came first and took 70% marketshare as a standalone product.  It has decimated the sales of every other MP3 player on the market.  The real story is that the record industry feels threatened by Apple’s dominance.  They tried to get Apple to give away it’s lead by licensing fairplay to other music stores and Apple wouldn’t budge.  They tried to talk up other services and portable players too.  Again, no dice. So now they want an excuse to pull the plug because they’re afraid if this continues much longer, Apple will usurp their position as music distributor and then suddenly they’re out of a job.

As for the ROKR thing, does anyone get the feeling Steve knew this thing was a dud before launch?  I do.  I’m guessing he was tired of hearing about how phones were going to eat away at the iPods popularity so he decided to release one that was doomed to fail from the start.  After all, if the preeminent online music company can’t make it work for phones, who on earth possibly could!? Maybe if someone got out there and made a decent device it wouldn’t flop so hard.  I want to buy a $1000-$1500 phone that will work with any mobile service, has a 5-20Gb drive, 2 to 2 1/2 inch color screen, 5-7 megapixel camera, j2me, and wi-fi that I can use for data and/or talk if I’m near a hotspot.  You know, like a pocket size laptop.  That way I could get rid of my batman utility belt AND buy my mobile service like I do my internet service.  I would buy that in a heartbeat but the phone manufacturers are too busy being the mobile service providers lackey to do it.  I don’t want a stinking mobile service contract.  I don’t have to sign my soul away to the devil to get an internet service, why should I have to for mobile phone service?  Anyway, duct tape, an iPod Nano, and a Motorola RAZR would make a better iPod phone than the ROKR.

Posted by Anonymous Coward on September 21, 2005 at 11:25 PM (PDT)

6

The record exec is absolutely right, but I’m not saying he’s right and Jobs is wrong.  They’re both greedy.

How about this for a trade, guys?  Buy a 60gb iPod for $149 and songs for $1.99.  I’d take that deal, but no way in heck Jobs is gonna lower his insane margins, he’s just gonna blame it all on the record execs.  They make easy targets, but I’m not blind enough to miss what Jobs is doing, and you shouldn’t be either.

Everything Apple sells is a product of greed.  They charge double what all other companies charge for RAM and hard drive upgrades in their computers.  They charge $39 for the iPod headphones that everyone on this site knows sound like garbage.  What about $29 for the iPod armband—isn’t that greed?

In fact the iPod has created an economy of greed.  Bose wants $299 for their SoundDock, and Klipsch want $399 for their iFi speakers—that’s what I call greed.

After all is said and done $1.99 doesn’t sound so bad for a song considering the music is what we bought the iPod for in the first place.  Didn’t Jobs himself say something like it’s about the music, stupid?

Posted by Talking Madness in Los Angeles on September 21, 2005 at 11:29 PM (PDT)

7

Erm…we’re using an iPod for our wedding reception on Saturday night. And I thought I’d come up with a fantastically original idea!

We’ve got a mass of wedding songs and we’ve split them into several playlists: ‘Food’, ‘Dance’, ‘Danish’ (we live in Denmark) ‘Appropriate’ (where the title of the song has a link to our situation) etc. It’s going to be a whole lot better than a DJ putting on ‘The Birdy Song’ every 5 minutes, it’ll never say ‘yes indeedy!’, and no one will be up there saying ‘Got any ‘Quo?’

Oh, and I’ll be dancing with the remote control in my pocket…

Posted by Species 8472 on September 22, 2005 at 12:09 AM (PDT)

8

“If they want to raise the prices, it means that they are getting a little greedy,? Jobs told reporters before the opening of Apple Expo in Paris. “We’re trying to compete with piracy, we’re trying to pull people away from piracy and say, ‘You can buy these songs legally for a fair price,’? he said. “But if the price goes up a lot, they’ll go back to piracy. Then everybody loses.?

O.K., I’m a high school drop out. Can I become a record exec. too?
What an absolute idiot.
As Jobs pointed out, EVERYBODY looses. He does, the record companies do, the customers do.
The iPod was gaining momentum long before iTunes, and let’s face it, you can fit just as much pirated music on the little bugger as purchased music.
I don’t know about other people, but iTunes is nothing more than a conveinience to me. I know the song I download will be properly tagged and of reasonable quality, (unlike pirated music…which is like a box of chocolates)
If they raise the prices, it starts getting less conveinient and I start caring less about having to re-tag music and search for decent copies.

Posted by MirandaKali in D.C. on September 22, 2005 at 1:05 AM (PDT)

9

That record exec quote is so completely and utterly dripping with irony that if you looked the word “irony” up in the dictionary you’d probably find that quote. 

And as I keep saying, if Sony would only ditch ChronicStage, Apple would have some serious competition.  The latest generation of Sony players actually look quite sexy, rather like the PSP.

Posted by phennphawcks on September 22, 2005 at 2:20 AM (PDT)

10

With all offense intended to the record executive (and all others)... you’re greedy, and 99 cents is the maximum I am going to pay for a song.  Yes, it’s true - Jobs is out to sell iPods, but really, he’s never pretended otherwise.

Posted by Lee on September 22, 2005 at 4:08 AM (PDT)

11

That wedding idea is SO 6 months ago…  Haha, not really, but I did it way back then and it worked great.  Here’s the thread: http://forums.ilounge.com/showthread.php?s=&threadid=87916&perpage=15&pagenumber=1

Posted by mretzak on September 22, 2005 at 5:57 AM (PDT)

12

.99¢ is the magic number.

If I go to allofmp3.com, the magic number seems to be around 10¢. When Rhapsody temporarily dropped its downloads price to a trial price of 50¢, its sales grew dramatically.

It has decimated the sales of every other MP3 player on the market.

This is a common misconception. On the contrary, the iPod has opened up a vast new market. The gripe most other companies have is that while their sales have grown respectably, Apple’s sales have grown tremendously.

Consider that in Q2 2005 Creative sold over 2 million DAPs and increased revenue by 45%. Now, five years ago Creative had around 60% of the DAP market, but the market was less than 5% of the size it is now. Creative’s position today, grabbing 10-15% of a vastly larger pie, is quite a lucrative business and dwarfs its earlier results.

Posted by Demosthenes on September 22, 2005 at 8:23 AM (PDT)

13

It was at a huge risk and expense to Apple to create the iTunes Music Store and NOW that it has succeeded and owns 80% of the market, these CORPORATE FATCAT LOSERS (who probably still don’t even understand iTunes or iPods) want to turn the screws on consumers / Apple.

.99 for a single song is not enough? You guys are joking.  How about this - charge us $1.50 for each good song on a CD and $0.00 for the cruddy filler songs that reside around these good tracks.  So instead of $9.99, each LP download would cost around $4.50 - that I’m ok with.

Posted by Cornelius Bigglesworth on September 22, 2005 at 9:15 AM (PDT)

14

Very interesting a record company exec. stating the obivous in an attempt to put down Jobs.  Ok MR. Record Company listen loud and clear to this, WE THE PEOPLE ARE TIRED OF BEING TAKEN ADAVANTAGE OFF IN YOUR ATTEMPT TO MAKE MONEY OFF OF US THE PEOPLE.  THE DIGITAL REVOLUTION HAS ARRIVED, EITHER CHANGE WITH THE TIMES OR YOU WILL BE OUT OF BUSINESS!!  WE THE PEOPLE HAVE CHOICES AND WE CHOOSE NOT TO BUY YOUR MUSIC IN STORES AT INFLATED PRICES!! WE CAN NOW DOWNLOAD MUSIC LEGALLY THAT WE WANT, AND WE CHOOSE TO DO SO IN AN ATTEMPT TO GET MUSIC AT A LOWER PRICE!!  YOUR BUSINESS MODEL IS OUTDATED AND NO LONGER WORKS!! WE ARE CHANGING IT FOR THE BETTER!! POWER TO THE PEOPLE!!  Ok thanks for letting me rant!!

Posted by scoobydoodt on September 22, 2005 at 9:37 AM (PDT)

15

I wish the price of iTMS songs would go up to $3.99 to make Apple lower the price of the iPod.  I would much rather have cheap iPods than cheap downloads.

Posted by Talking Madness in Los Angeles on September 22, 2005 at 12:08 PM (PDT)

16

I can’t believe that record executives are that AMAZINGLY arrogant.  Actually, I shouldn’t be surprised since they set up a system that is slanted toward forcing us to buy WHOLE CDs of songs that typically have ONE OR TWO GOOD TRACKS.

Besides that point.  These are the same people that sat idly by and cowered in the face of piracy while every was already downloading left and right.  Steve Jobs comes buy and shows them a model that actually MAKES THEM MONEY (contrary to this record exec’s swipe, Apple makes very little off of the actual tunes) and now they want to basically #### IT UP by RAISING PRICES.

I don’t understand why the record industry is so bitter.  They could have taken initiative themselves and made themselves the definite source of quality digital downloads.  They could have accepted piracy as a cost of doing business but realized that the right price dimishes the incentive to pirate (why search and wait when I can get a track immediately for 99 cents?).  They could have OWNED this industry but they slept on the opportunity. 

Now, already late to the party, they want to come in with JACKED UP PRICES??!?!?  THIS IS THE SAME INSANITY THAT DRIVES THE SO-CALLED “IPOD-KILLERS” OUT THERE.  They expect to take out the market leader with inferior or marginally better products at a HIGHER PRICE.  That’s why Microsoft’s mafia of mediocre media devices has to make an “announcement” every three month that they have the “true ipod killer”.

None of them get it!!!

Posted by Frank Z on September 22, 2005 at 12:16 PM (PDT)

17

ANONYMOUS Record Exec: “It helps him sell iPods.”

I wouldn’t say that’s true at all.  I didn’t even start looking at iTunes until AFTER I bought my iPod.  And if users were SO concerned about the price of downloads, they would simply lapse back into piracy (just as Jobs has forewarned).  The truth is it helps him sell iTunes—the songs—which, IIRC, helps the record companies too, doesn’t it?

“When he started iTunes, he broke through that psychological barrier that consumers had and made a lot of dough doing it…”

What psychological barrier would that be?  The fact that consumers were conflicted between pirating music illegally, and submitting themselves to highway robbery, by being forced to buy whole albums for $15-16 to listen to a few choice songs, without any simple means of previewing the rest of the album?  Mr. Record Exec, I think *YOU* have the psychological barrier: transference of guilt.

“...but it seems like he has a monopoly and he’s become the Wal-Mart of the Internet, and he wants to retain that monopoly.”

What a crock.  As influential as Jobs and Apple may be, the iTunes Music Store is ultimately at the mercy of the RIAA, not the other way around.  Wal-Mart is near-monopolistic because of its anticompetitive business tactics—exclusivity deals, price regulation, etc.  iTunes MAY have monopolistic market share, but it’s not because it strong-arms the competition or the suppliers…  It’s just because they’ve been better at marketing themselves and selling iTunes and iPods synergistically.  Simply put, they do it better.

Posted by SPThom on September 22, 2005 at 12:20 PM (PDT)

18

WHERE DOES MUSIC COME FROM?
A very basic fact about the music industry is that they do not create music. The only things any record company ever created were million dollar starz, and they are few and far between.  Most of their artists are MILKED into obscurity and poverty.
  Music existed long before the studios and if they ever were to vanish, music would live on long after.  Music, by nature, is not as much a product as it is an expression. It’s an expression of emotion and experience, owed entirely to the society it came from. This means that we, the musicians and listeners, are the very source of all music. Record companys would rather you not see it this way. They need for us to believe that if it weren’t for them, we would not have all this music we love so much.  What the industry is good at, is determining what “sound” earns them the most profit and then capitalizing on that “sound” as quickly as possible. Therefore they have to find, record, and release as many artists that share that “sound” or artists who their producers can mold to fit that “sound”, before our ears move on and are ready for something different. Ultimatly this provides us with the least origional and creative musicians out there.  More importantly, the creativity possesed by these musicians is most often “scattered, smothered, and covered” as they are encouraged (forced) to pay off their debt to the label by following trends rather than exercising their creative muscle. This could help to explain why so many albums have only a few decent songs. The industry can only see music for it’s potential for profit. Their desire to force apple to raise iTunes prices is based entirely on the fact that their studies suggest we would be willing to pay more. It’s up to all of us to prove them wrong. WE CAN’T FORGET THAT, THROUGH CREATION AND INSPIRATION, WE ARE THE TRUE SOURCE OF MUSIC!

Posted by T.S. on September 22, 2005 at 12:22 PM (PDT)

19

(As much as I hate to interrupt this heated discussion…)

Re: Creative
<nelson>HA-HA!</nelson>


Thank you for your time smile

Posted by Alex H. on September 22, 2005 at 12:26 PM (PDT)

20

It is about greed but not in the obvious way. The record companies don’t want iTMS to be successful. It is an independent outlet that they can’t control, unlike the various chains of music stores. Without that control, they can’t fudge the numbers and have to pay artists what they actually owe and pay the IRS what they actually owe.

Posted by Nipith in Los Angeles, CA on September 22, 2005 at 12:35 PM (PDT)

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