Record companies criticize Apple for iTunes pricing | iLounge News

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Record companies criticize Apple for iTunes pricing

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

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 4:47 PM (CST)

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 4:51 PM (CST)

43

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

for now we have torrents ;)

Posted by gabe on January 24, 2006 at 5:01 PM (CST)

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 5:15 PM (CST)

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 6:22 PM (CST)

46

Well, what is the point of downloading tracks off itunes if they’re going to end up costing as much (or more than) as purchasing the cd. I never have downloaded off itunes because i like my VBR encoded mp3s. So i purchase a lot of used ones. The only new cds I have bought are albums that i truly fully loved. So quite simply, if the record company wants us to purchase FULL albums, then they need to release GOOD albums. Variable pricing would work, but the minimum can’t be 99 cents. Think about it, if i wanted to download a album with 15 tracks, then normally it would already cost me 15 bucks! I could probably get that cd for 10 bucks if i looked enough. If they push prices up, then new albums would be around 20 dollars to download in 128kb AAC! Just doesn’t even sound reasonable since you don’t even get the actual cd.

Posted by hoancai on January 24, 2006 at 7:09 PM (CST)

47

“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.”

Let’s say that you can go to any store in the country and buy, we’ll say, 100% milk chocolate bars for $1.00 each. Of course, you’ll either have to drive 20 minutes or order these chocolate bars and wait a few days for post to get them to you. Are you seriously suggesting that the consumer should be willing to pay $1.00 per bar for a 15% chocolate bar with the rest being flavorless parafin wax just because somebody can slingshot it across town to you in 5 minutes?

Consumers should not be asked to pay CD prices for downloaded tracks unless they are lossless with the same options as a CD gives them. If you don’t have broadband and are willing to eat the wax & chocolate, more power to you, let them set a price that is representative of the lack of quality inherent in such a file, but trying to sell music according to what the least equipped customer has is a terrible business model. Plus, just because you can’t hear the difference between an iTMS file and the original source (or even a better quality compressed file), doesn’t mean that many of us can hear that difference and find it unacceptable for the price.

As for your other comments, hard drives are cheap and/or DVD burners are cheap. My entire CD collection, more than 400 CDs and taking up three storage boxes, now sits in a stack of 30 or so DVDs in lossless FLAC above my computer desk. There’s absolutely no justification for not offering the choice today, and that’s the real reason for the slagging: we are not given the choice to buy actual CD quality, but we are asked to pay real CD prices.

Posted by Code Monkey in Midstate New York on January 24, 2006 at 7:11 PM (CST)

48

“If you look at any other consumer category—including things like iPods—they sell at different prices.

Posted by The Raven in USA on January 24, 2006 at 9:26 PM (CST)

49

Are the record execs trying to say that they aren’t rakin’ in the dough?  Who do they think they’re fooling?  They’ve got no overhead, no manufacturing costs and no distribution costs.  Every iTunes sale is pure profit.  What they REALLY want to do is return to the days of artificially inflated prices.

Posted by The Raven in USA on January 24, 2006 at 9:43 PM (CST)

50

“But then I would ask the record companies - how about pricing some of those nasty album-filler-outers below $.99?”

Well, how about they just leave the filler out altogether?

Posted by The Raven in USA on January 24, 2006 at 9:45 PM (CST)

51

I think the whole thing is stupid. Record companies would rather we download music for free because that is what is going to happen if they raise the price. I refuse to pay $16.99 for a cd in a record store when I only like two or three songs on the whole album. I have bought more music since I have had iTunes then I have in my whole life so if record companies want any money at all from me then they need to suck it up.

Posted by ev on January 24, 2006 at 10:24 PM (CST)

52

Obviously, their plot is to drive iTunes out of business.  If they charge $1.99 for a song, people will stop using iTunes to buy music…it will be easier to replace itunes with the crappy Urge MTV spinnoff integrated into friggin WMP and Vista.  With subscription services, they can control which songs are part of the all-u-can eat service…their plan is to double-charge for the popular songs by keeping it out of the all-u-can eat service.  Obviously, they figure this out to be the most profitable money making scheme…The gov’t should investigate for collusion…cause they did it before, and they’re trying to do it again.

sheesh…I use to like dislike Apple in the 90’s, but they ARE fighting the good fight now.

Michael

Posted by Michael Ihle on January 24, 2006 at 10:33 PM (CST)

53

“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.”

Yeah, because when I go into a store, the most popular CDs are always priced more than the less popular ones…
In truth it’s usually the reverse. Where I shop, chart CDs and new releases are generally anywhere from AUD$2-$7 cheaper (around AUD$18-19) than general stock (up to AUD$28-30).

Where do they (record companies etc) find these people?

Posted by saveferris91 in Melbourne, Australia on January 24, 2006 at 11:33 PM (CST)

54

Hey Apple. One up these guys. Start your own label. Stick it completly to them and hurt them where it counts. Those jerks deserve it.

Posted by rebel_519 on January 25, 2006 at 2:03 AM (CST)

55

I want ¢99 for each time some RI representative or associate complains about iTunes pricing.

Posted by Bad Beaver on January 25, 2006 at 3:04 AM (CST)

56

Why the hell would they want to sell popular songs for more $$? Normally, popular or newly released CDs are priced cheaper than the normal or older ones.

And especially in Thailand, where CDs cost you 399 baht ($10) each, each song would cost a dollar if there were ten songs. But normally there would be more than ten songs per CD. So why don’t the record companies bitch about losing profit in Thailand let alone they don’t need to pay for material cost and retail cost if they sell in iTunes.

These people are just greedy bastards.

PS I wouldn’t buy from iTunes anyway because buying a CD is the same price as buying an album in iTunes. Plus, I get the encoding options. :P

Posted by hoho on January 25, 2006 at 4:28 AM (CST)

57

Slightly off topic, but a quick search of the UK ITMS reveals 10 tracks that are nothing but silence on sale for 79p.  I wonder how happy the record labels are that they’re making money for selling literally nothing?  Or Apple for that matter?

Posted by phennphawcks on January 25, 2006 at 4:47 AM (CST)

58

Well other than apple I’m sure the consumers are happy! :D

And now that apple has got their contacts in their hands, i dont think the record companies are going to win too soon.

Make em pay apple!

Posted by matt on January 25, 2006 at 5:10 AM (CST)

59

“Why the hell would they want to sell popular songs for more $$? Normally, popular or newly released CDs are priced cheaper than the normal or older ones.”

Good queston.  It just points out the industry’s illogical “logic”.

Posted by The Raven in USA on January 25, 2006 at 5:41 AM (CST)

60

“Well other than apple I’m sure the consumers are happy! :D”

And, if the musician’s are unhappy, it’s only because they continue to get screwed by their labels.

I would also suggest that many of the individual song sales on iTunes are sales that the label would NOT have made if the buyer had no option other than purchasing an entire overpriced CD or CD single.

Posted by The Raven in USA on January 25, 2006 at 5:49 AM (CST)

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