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Record companies criticize Apple for iTunes pricing

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By LC Angell

Contributing Editor
Published: Tuesday, January 24, 2006
News Categories: iTunes

Many in the music industry are concerned that the iTunes Music Store’s flat rate pricing has done lasting damage to profitability and are adamant that Apple will be forced to move to a variable pricing structure. Music industry executives are taking swipes at Apple at this week’s Midem music trade show in Cannes.

“I’m hearing that the artists aren’t happy, the publishers aren’t happy. Someone other than Apple needs to be happy for this industry to grow,” said Amit Shafrir, president of AOL’s premium services arm.

Record companies say Apple’s 99-cent per song pricing has set the benchmark too low, but have failed to persuade the company to switch to variable pricing, which would allow popular songs to be sold for more.

“For the time being we all must work with Apple and make the most of iTunes,” said Eric Nicoli, chairman of EMI Group PLC, the world’s No. 3 record company. “Single pricing is almost unique to the music industry,” Nicoli added. “If you look at any other consumer category—including things like iPods—they sell at different prices.”

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Comments

21

Well if they actually think they can get or deserve to get more than .99cents a song for a 128kbpps AAC file they are smoking the wrong stuff. Itunes music files when I do DL them are convieniences, it means I’m too busy or lazy and don’t want to run out and buy the CD. If the price goes up than I will buy none.

Posted by Scarpad on January 24, 2006 at 9:50 AM (PDT)

22

I’ve only just checked and here in the UK i’m already paying the equivelent of $1.59 a song - so you think you have it bad :(

If the price is going to go any higher, i’m going to need:

The option of downloading in Apple Lossless/Higher bitrate AAC.

Being able to re-download tracks you’ve already bought, which I think is odd that you can’t do already.

Posted by Fillado on January 24, 2006 at 9:52 AM (PDT)

23

hey, good idea. jack the prices on songs, and i’ll just go download it for free somewhere else.  that’ll help the record industry, won’t it?  are these guys really that greedy, or just total morons?

Posted by rd on January 24, 2006 at 10:05 AM (PDT)

24

Before iTunes, i bought maybe 1 CD a year. the rest i downloaded illegally from first napster, then kazaa, then limewire. i stopped because quality is unpreidcatble on these, and because 99 cents is a fair price. if they want to switch to variable pricing, i’m all for that. let the most popular songs be 99 cents, and the less popular songs be 89 to 29 cents. of course, this is not at all what they are planning.they want popular songs to be $1.49-$1.99, and keep the minimum at 99 cents. i’m fine with that. i’ll just go back to stealing it. at that price, it would be worth it to search for a quality audio file and correctly label everything. record companies have found a way to profit without actually producing and shipping a disk, and they still want more money? forget it. i won’t buy a single track from any label that charges more than 99 cents a song.

do they even realize that they are gaining money from iTunes? before, when i would download illegally, i would only download songs i new. with iTMS, i am exposed to complete albums and discographies, unlike, say, kazaa. iTMS has opened my eyes to worlds of music that i previously was unaware of. but fine, raise the price. i’ll just look up new songs in iTMS, and then download them on limewire. can’t beat that price. especially when compared to the alternative

and this may be a tiny bit off the subject, bit i thnk it’s time they got rid of those tracks that are only purchasable with the albums and just charge $1.99 for them. if a track is longer than 10 minutes, just let me buy it for $1.99. i’d prefer if it were just a standard 99 cents, but that obviously will not happen, and in most cases, i just end up not buying the album andn ot getting the song. or just borrw it from a friend.

Posted by Bradley on January 24, 2006 at 10:32 AM (PDT)

25

Dear record companies: bite me.  For once someone has provided a great and easy to use way to get music at, yes, a fair price.  You’re cheesed off because you aren’t making “enough” money.  Plain and simple.  Have you forgotten all those $12.98 CDs issued centuries ago?  Haven’t you recouped your investment in Bob Dylan yet?  Waaaaa.

Posted by NickT on January 24, 2006 at 10:38 AM (PDT)

26

I buy non-DRM artists’ music from Magnatune. Problem solved. wink

Posted by Moe on January 24, 2006 at 10:48 AM (PDT)

27

I buy some music from iTunes but really if those guys raise the bar then they should lower the prices on “less popular” songs. 95% of the stuff that those “major” record labels record is just gerneric crapp anywho, so no big loss. But raise the prices and I won’t buy them. $.99 and you have to deal with DRM strip the DRM off and charge 1.50 then you got a deal.

Posted by Mtich on January 24, 2006 at 11:06 AM (PDT)

28

Sell new songs at 1.49 for the first 90 days from release. Sell all songs 91 days old up to 2 years for .99. Sell all songs older then 2 years at .79. And,sell all songs under 1:30 in length for .50 less. I’m sick of seeing 45 second long ‘skits’ found on rap cd’s,for example, selling for .99. Or those 20 second ‘intros’ that get their own track number selling for .99.
Also,sell all songs in a lossless format for .50 more…so a new release in lossless would go for 1.99.

Any more then 2.00 for a single song is a joke.

Posted by me2me on January 24, 2006 at 11:11 AM (PDT)

29

me2me, that is an excellent idea. i rarely buy new releases anyhow, and if i need to, i can wait a few weeks. i agree with your comments on the short songs as well. there’s only one problem: the record companies would never do it. not enougn money in it for them. so let me rephrase that: yours is a great idea if the record executives had a shred of decency and common sense

Posted by Bradley on January 24, 2006 at 11:24 AM (PDT)

30

” strip the DRM off and charge 1.50 then you got a deal.”

Exactly, let me download FLAC or some other lossless format that lets me transcode to anything else at a decent price and I’d *never* bittorrent another song file again as long as I live. But so long as the best they can offer me is 128/192 bit files complete with DRM for more cost than I can buy a CD for they’re just never going to get ANY of my business for online delivery.

I’m not sure what universe they live in because, even minus filesharing, there’s just too many ways to obtain DRM free music at higher quality and lower cost than the existing approved online stores especially the iTMS.

I buy an average of 2 or so CDs every single month, and I don’t ever pay anything close to what the iTMS is charging now, I can’t even imagine what sort of stupid price scheme the labels would come up with (particularly considering that they think CDs are supposed to be costing us between $17-$25 each).

Posted by Code Monkey in Midstate New York on January 24, 2006 at 11:24 AM (PDT)

31

I’d be curious to hear more about the Artists who aren’t happy….who are they?  What’s their beef?

Whenever somebody starts a sentence with “from what I hear” (or one of its many similar permutations)its sets of a red flag for me.  Either he’s got a buddy who’s music isn’t selling or he’s just plain making it up so that it sounds better than “the music companies aren’t happy”.  Of course their not.  Greedy bastages….

Posted by DomArch on January 24, 2006 at 11:51 AM (PDT)

32

“I’d be curious to hear more about the Artists who aren’t happy….who are they?  What’s their beef?”

Their beef is probably that they continue to get the same (teeny) label favoring slice of the pie as they to with traditional sales with no hope of renegotiation for this new sales channel.

But the labels wouldn’t want to highlight that part of it wink

Posted by Code Monkey in Midstate New York on January 24, 2006 at 12:06 PM (PDT)

33

“Album sales have declined steadily as consumers ‘cherry-pick’ individual tracks online, said Phil Leigh of Inside Digital Media, a U.S. market research firm. ‘When you can buy just the songs you like in a digital format, you don’t have to buy the album.’?

That has to be the weakest argument ever. Make better tracks *THEN* we’ll buy entire albums, jackass. Once I simply wanted this James Bond remix from the Skatalites for $.99, why the hell should I buy the entire $10 album if I just need one song? It’s convinient and it’s legal. Whenever an album is good, then I buy the entire album (I recently bought the Good Night, and Good Luck soundtrack).

$.99/song or $9.99/album

change the price and trust me, there will be a boycott, and a lot of complaints from iPod owners.

Posted by Zaki Q on January 24, 2006 at 12:11 PM (PDT)

34

Can someone explain to me why I can buy a movie DVD, like Lord of the Rings, which cost $100 million to make, only costs $14.99 on sale, versus a music CD composed of 14 songs (of which maybe 5 are any good) and costs a fraction to make versus a movie, goes for the same price? 

Go ahead…increase prices…watch your profits falter…again!

Let piracy reign you music mogul maggots!

Posted by TechnoGeek on January 24, 2006 at 12:14 PM (PDT)

35

You can either pay $12.99-15.99 retail for the latest CDs, or wait 3-4 months and buy them for $5.99 with free shipping from YourMusic.com.  Screw Apple and their crappy 128Kbps files. Now, if they were offering 192Kbps files, or better yet, lossless for the same price, then that would be a different story.

Posted by Galley in Greenville, SC on January 24, 2006 at 12:21 PM (PDT)

36

They just don’t get it, do they?

Posted by Zen Masta J on January 24, 2006 at 12:52 PM (PDT)

37

A little off topic but what is with the slagging off of Apple and the format in which files are downloaded. The reason why the format is smaller is because people have to download these files, lossless would be great if you have a massive harddrive and a limitless fast broadband connection. And to be honest I can’t tell the difference in sound quality.

The Pricing should stay the same if not a little cheaper in the UK hint hint wink The music companies should think shame! how much does it cost to make an Album these days anyway?

Variable pricing in the UK is already happening with Whole Albums costing as much as a regular CD.

Posted by Paul D on January 24, 2006 at 1:38 PM (PDT)

38

On the BBC news website they have an interview with some music industry people about this, and I am sure they are wrong, but they say it is still illegal to copy CDs on to computers & mp3 players in the UK.

http://news.bbc.co.uk/1/hi/entertainment/4641054.stm

Posted by tom on January 24, 2006 at 2:05 PM (PDT)

39

they’re greedy 99cent per song is a good deal the average CD has about 11-13 songs and sells for around $11-12.99. so 99 per song is just about right.

Posted by devGOD on January 24, 2006 at 2:29 PM (PDT)

40

Artists are unhappy?

Name them.  Which artists?  Because all I EVER hear from the artists themselves is that they love this stuff, and they NEVER complain about the 99 cent pricing.

Someone is lying, Mr. Record Company Stooge.

Posted by stark23x on January 24, 2006 at 2:39 PM (PDT)

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