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Record companies criticize Apple for iTunes pricing

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By LC Angell

Senior Editor, iLounge
Published: Tuesday, January 24, 2006
News Category: 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

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.’â€?

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)

41

Greedy capitalist pigs!!!
How stupid are they? Now let’s see, Apple’s happy, consumers are happy, indie labels are happy, indie artists are happy, and I’m pretty sure the major labels artists are doing ok...which leaves only the greedy bastards at the major labels! What a surprise! Flat rate pricing is why the iTMS is so much better than a bricks and mortar record store. I do not want to have to look through the online iTMS bargain bin to get past the overpriced major label crap.

And by the way, I know the trend may be sliding away from buying whole albums and towards single songs on iTMS, but I’ve spent about $150AU and I’ve only ever bought albums, not only because it works out cheaper per song, but also because I much prefer to have a whole album than a couple of songs by an artist.

Posted by Nuke666 in Melbourne, Austalia on January 24, 2006 at 2:47 PM (PDT)

42

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?

Simple. This difference is commonly called “a movie theater”. Films like the LOTR properties have generally made all of its money back from gate receipts alone; video rentals add to that, and video sales is pure gravy.

Music, by and large, is solely dependant upon retail sales for its profits.

I read these comments here and all I can do is laugh; if you don’t like the price, then boycott. Simple as that. But all I read is how many of you people will go back to the P2Ps and steal instead. Having your cake and eating it to, eh?

Sounds like two sides of the SAME coin; the record companies may be greedy, but so are all of you who want something for a price YOU alone think is fair.

A sliding scale pricing schedule is not an unreasonable solution. New songs are priced higher, then drop as their popularity fades...no different than videos, video games, books, CDs. By pricing individual songs higher, then perhaps full album download sales becomes more attractive. A song for one Frosty is pretty cheap, if that song is really OH SO SPECIAL to you. If you think that these songs AREN’T worth more, then why are you even bothering to listen to them, then?

It may also surprise some of you that there ARE occasional gems on those albums that the record labels never get around to pushing.

Posted by flatline response on January 24, 2006 at 2:51 PM (PDT)

43

the price increases are bound to happen unfortunately - time will tell how the consumers will react.

for now we have torrents wink

Posted by gabe on January 24, 2006 at 3:01 PM (PDT)

44

I have no problems with variable pricing.  I can understand the problem with those who are only downloading the select song(s).  The linear price scheme just doesn’t work.  As a consumer, I would be fine with (slightly)increased prices for select tracks.  But then I would ask the record companies - how about pricing some of those nasty album-filler-outers below $.99?  I will not pay more than $10 for a downloaded album - it’s already too high.  I can almost get the same price for the CD version and then I’m getting better audio quality, the CD insert, artwork, the ‘tangible’ product.  So, fine - move to variable pricing, as long as it doesn’t lead to an increase to complete album download prices, which I think actually need to be lower in order for legal downloads to take off.  I would imagine that the artists themselves would want to find some way to encourage complete album downloads so that their complete piece of art is experienced more as they intended.

Posted by Alien Hand on January 24, 2006 at 3:15 PM (PDT)

45

flatline response, i agree: we should boycott if we don’t like the options they give us. and how will we boycott? by taking the songs from p2p networks. the record companies can give us any choices they like, but as the consumers, we can tell them to go screw themselves, and get the songs elsewhere.

and just because one likes a song doesn’t mean one will pay a ridiculous amount for it, especially when there are easy ways to get it for free. if you love your songs so much and consider them so special, and you think 99 cents is too low a price, then why don’t you send a check for extra money to your favorite record labels. i’m sure they would appreciate it, and maybe then they would stop bullying the rest of us (well, no, they won’t)

Posted by Bradley on January 24, 2006 at 4:22 PM (PDT)

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