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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

61

Oh Please!!!!!!!!!record companies are greedy. Thats why piracy is so high. I refuse to pay more than 99 cents for a 128bit rate. I might consider paying a tad more if they offered a higher bit rate.

Posted by jazzbass12 on January 25, 2006 at 5:56 AM (CST)

62

The worry for record companies is obviously that iTunes is undermining the traditional single/album distribution method which nets huge profits for the middlemen at the expense of artists and independent retailers.

1x unknown artist + 1x hit cover of established song + 1x album full of filler = tons of money for pony-tailed execs

But in the bigger picture, could a service like iTunes actually replace the current system completely?

Apple signs new acts, pays for the recording sessions and then distributes the product. Of course the whole landscape of the music industry as we know it would have to change: the album format would be gone, single songs would be king. But isn’t that what the pundits are telling us is already happening?

They’d have to settle that suit with the Beatles first…

Posted by yashin on January 25, 2006 at 6:16 AM (CST)

63

I wish the music industry could make up their mind. First of all there are people who are still using illegal downloads not only for music but also for movies and getting away with it for free. With iTunes we are at least downlading in a legal way and paying for it which is a whole lot better than nothing…

Posted by badkittie on January 25, 2006 at 12:11 PM (CST)

64

The industry is never happy. First they complain about the decline in CD sales because of P2Ps. Then Apple launches a legal, pay-per-download system that has become remarkably popular and the benchmark for the digital download industry, and they still complain about lack of sales. “iTunes is too convenient for the consumer! We must charge MORE!” Jesus Christ.

Posted by VousDew on January 25, 2006 at 5:24 PM (CST)

65

Maybe I’m missing something - but doesn’t the volume of sales enter into the picture?  If the recording industry publishes a new song which becomes popular - it will receive a lot more revenue which tranlates into profit.  Why should I pay a premium on top of that?

Posted by Peter on January 26, 2006 at 12:00 AM (CST)

66

Oh, my other thought on this topic: If there are any unhappy artists, it’s probably because they are looking at the press releases about iTunes sales numbers, and feeling left out. If they were averaging $1 per CD sold, don’t we think that they’re probably getting .10 per track form iTunes sales? That probably doesn’t look like much income when we, the selective consumers, are able to “cherry-pick” away from mediocre songs.

Posted by Ronco on January 26, 2006 at 4:45 PM (CST)

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