Apple, record labels to face off over pricing

[NashVegas]

The love affair between record labels and Apple Computer Inc. could be headed for the rocks as they bicker over prices ahead of licensing renegotiations set for early next year.

The licensing agreements between Apple, maker of the wildly popular iPod digital music player and operator of the most widely used music download service, and the record labels are set to expire next spring.

Apple's chief executive Steve Jobs, believed by some to be the savior of the music industry, insists that prices should be uniform at 99 cents a song and $9.99 an album, saying that the buying experience for consumers should be simple.

Record executives, however, are seeking some flexibility in prices, including the ability to charge more for some songs and less for others, the way they do in the traditional retail world.

"There's no content in the world that has doesn't have some price flexibility," said Warner Music Group Corp. chief executive Edgar Bronfman at the Goldman Sachs Communacopia investor conference here. "Not all songs are created equal. Not all albums are created equal. *"



http://today.reuters.com/news/NewsArticle.aspx?type=technologyNews&storyID=2005-09-22T223259Z_01_FLE281150_RTRUKOC_0_US-APPLE-MUSIC.xml

*scuse me, but I think some people who make arguments for file sharing have been saying the same exact thing.

[rocktivity]

1. But what would it be based on?

A song's age? Nationality? Genre? Popularity? How many musicians are used? Maybe we should just stop buying records and switch to a file sharing system where the money goes directly to the artist!

:shrug:
rocknation

[mccoyn]

8. Supply and demand.

Actually, with the extremely cheap supply it will be based only on demand.

[trogdor]

14. Why not?

DVD's are sold this way, why not records?

Let's pick a classic rock masterpiece, like Springsteen's Born in the U.S.A. Amazon will ship you a new copy in shrinkwrap for $10.99, but you can get a used copy, still good for ripping or whatever else you want, for less than six bucks. Six bucks for a multi-platinum record from a quarter-century ago that our grandchildren will still be listening to.

How about another one? Led Zeppelin IV sells new for $13.49, but used copies can be had for under five bucks.

Another one? Exile on Main Street, arguably the Rolling Stones' greatest work, new price $13.49, used price around seven bucks.

Electric Light Orchestra's Out Of The Blue. New: $10.99, Used: around six bucks.

Eagles' Hotel California. New: $13.99, Used around three bucks.

OK, so I'm 42. That's what I listen to.

There are lots and lots and lots of these classic rock records floating around. Why would anyone pay ten bucks for a collection of MP3s when they can get the physical disk cheaper?

[rocktivity]

16. MILLIONS of people are paying Apple ten bucks for "a collection of MP3s"

because it's EASIER than "getting the physical disk cheaper."

If you don't mind the album being used, making the effort to find a used copy, or waiting a few days for delivery if you order it, fine. If not, downloading provides convenience and instant gratification.

The only reason why the industry wants to charge more is because they WANT more. Fortunately, Apple understands that there's no way to justify charging for shrinkwrap, manufacturing, packaging, or postage when there isn't any!

:headbang:
rocknation

[DerBeppo]

29. apple understands?

Apple understands that there's no way to justify charging for shrinkwrap, manufacturing, packaging, or postage when there isn't any!

then how do they justify charging $300 for an mp3 player when I can buy one with a larger capacity and better sound for 100 to 150 dollars less?

[Podface]

35. huh?

the mini is $199

the new nano with 2 gig is $199

[DerBeppo]

36. the 20 gig

i bought a 40 gig creative zen for the same price as a 20 gig ipod. twice the size and a much, much longer battery. not to mention i don't have to let itunes take over my music files.

[Brundle_Fly]

17. but the packaging...

shippping, stocking, warehousing, trucking, etc etc costs are offset, and uneeded.

Keeping it at 99 cents a song and 9.99 an album, where there is no cost to the old school system is fair.

expecting the record companies to get more money for doing much much less is retarded and a perfect example of the greed in the US corporate system. As if they will have anything for "LESS"



Cheers steve jobs, I hope you win

[Coventina]

2. How much do you want to bet that if the music industry gets their way

that the prices will only go up, not down?

[ender]

4. Jobs isnt giving in.

[Ready4Change]

9. Yep. .99 and 9.99 will be the floor.

.

[boredofeducation]

11. So what

So what, if they raise the prices, people will either pay more, or not buy. Then when they realize that people are not paying the high prices, they will lower them. Let the RIAA experiment, if it fails, good for us, if they succeed, good for them.

[merwin]

13. Unfortunately, that approach doesn't work favorable with Americans.

Just look at what's happening with gas and how we're just tolerating it.

[belle]

23. Totally different. There's no alternative to gas (yet, anyway...)

and it's a lot harder to find one. But the music industry is not going to get consumers to pay more for their overrhyped CD's when they can just point 'n' click and have what they want for less (nothing, if they use shareware, which they still haven't been able to block).

[NashVegas]

30. Betcha They Can

This is an industry that has long traded on glamor as a means to underpay the people who make profit possible.

[merwin]

33. Sure there is. Biodiesel.

[belle]

22. They won't. They're going the way of the dinosaurs. Buh-bye.

If they kick and scream it might be a little later than sooner; but they're over. The 'Net has made them redundant. And you can't beat an underselling competitor.

[Ignacio Upton]

26. They'll ask for $1.25 or $1.50 per song

Which, if you ad up to 17 or 18 songs, means you are paying MORE for an album than you did with physical CDs.

[NWHarkness]

3. The record companies killed the goose that laid the golden egg

Then when Steve Jobs gave them another goose, they said "Let's kill that one too."

[wakeme2008]

6. That's right

All they get from Jobs is $$$$$,,, they do not have to produce and ship and market anything.......

What a deal, and they want more $$$$$$

[stepnw1f]

5. Greed is a Waste of Time...

Why are people soooo near-sighted. This is what got them in trouble in the first place. Don't they give a damn about the industry?

[sendero]

7. The record-company guys..

.... couldn't find their own asses with both hands. They are always looking for a way to gouge the customer, then they cry like babies when the customer extends them the middle finger and goes online.

Screw the lot of them.

[rocktivity]

10. DING DING DING! Sendero, you're our grand prize winner!

The record company guys...cry like babies when the customer extends them the middle finger...

The record company guys realize they're on the brink of extinction, but they're too greedy to follow life's most basic law--"adapt or die." If a dollar a song and ten bucks an album is cutting into their overhead, they should downsize and reorganize like everybody else!

:headbang:
rocknation

[LeftHander]

12. Screw Warner....

There enough independant artists and labels that giant record companies are not needed anymore.

SHow them....buy my CD....


lol

[joefree1]

15. Go Apple. Screw the music corporations!

I love iTunes because I can sample the music before I buy it. So I check out a lot of stuff I would never had heard on corporate radio.

If it ain't on iTunes I will probably not buy it.

Steve Jobs should tell the music labels to take a hike and I will keep buying independent labels and up and coming artists.

[ikri]

27. Apple aren't that perfect

I'm pretty sure that there's a lawsuit pending in the EU over iTunes' unfair trading practices.

A single track in the US costs $0.99
A single track in the Euro-zone costs €0.99
A single track in the UK costs £0.99

It might sound OK, but $0.99 equates to €0.83 or £0.55

There shouldn't be a problem. I can buy a product from anywhere in the world from the UK and pay in the correct currency since my bank will simply exchange the currency when I pay. Since there is no physical item to deliver there should be even less problematic as there are no postal charges.

iTunes, however, localizes me. I cannot, as a UK resident, purchase from iTunes in the US or iTunes in mainland Europe.

Apple do suck a lot less than most record companies, but they're still a profit driven company and as such only suck slightly less.

[Podface]

18. On Itunes

Jobs is a fucking genius. He and his company had the foresight to make a user friendly software interface that includes music from most worthy labels, and the kick-ass ipod hardware that people love.

quick facts-

95% of the music sold on itunes - singles - albums rarely sell.

31 million iPod in 2005 and 43 million units projected in 2006.

500 million songs + sold.

Itunes makes about 35 cents gross on each song purchased.

Singles sales had dumped since iTunes landed.


The model Apple has built works perfectly for the consumer.People like me don't mind spending a buck or two for a song. If I really want the CD I'll buy it and load it into iTunes/ipod. Major Record companies are slow, non-progressive and greedy. They see our culture is moving away from buying full CDs and Jobs owns the distribution company that sells their music. They want a better deal. The worm has turned.

I hope Jobs stays firm, because there is no way these idiots will be able to launch a successful iTunes clone.

[dhinojosa]

19. The Record Labels are under the illusion that they are in control.

If they raise prices over .99 or 9.99 they'll get 0.00 because that would cause a resurgence in free filesharing.

[HuffleClaw]

20. seems to me what is needed here is what those hollywood actors did...

...so many years ago. chaplin, fairbanks and others. they formed 'united artists', iirc, to cope with the stranglehold the studios had on the 'talent'. if a few 'big name' artists banded together to form their OWN studio and made their OWN deal with apple, they could change the entire industry pretty damn quick. music studio executives are like tv network executives, which isn't saying much. they don't WANT the listener/viewer deciding what is GOOD. they want to keep churning out new brittney's.

[AlCzervik]

21. Wait until you can download movies off Itunes, that'll will be pretty cool

i can already picture the imovies web site and i bet there will be a price cap.

[Ignacio Upton]

25. A movie Ipod will probably come out in 2-3 years

But I bet they will make the Ipod bigger as a result so they can have a wider screen.

[Podface]

32. oops

[Ignacio Upton]

24. The RIAA and their ilk want more and will work to get it

If it were up to them, the MP3 format itself would have been illegal. For example, in 1998 they tried to stop Diamond Multimedia from releasing their Rio MP3 player (which was only 32 MB for songs, but a breakthrough because it legitamized MP3s as sucessors to CDs) charging that by making a portable player it would help file-sharing. The judge ruled in favor of Rio over the RIAA, and since then, instead of adapting to the changing times, the RIAA has sued everything and everyone who has defied them. When will they learn that they need to adapt or die? They're now going after internet radio providers (and Electronic Frontier Foundation email I got claims that they want the FCC to limit the technology of Hi-Def Radio and internet shows.)



BTW, don't turn to anyone in the Democratic Party. One of our major surrogates on Hardball, Hillary Rosen, was a former president of the RIAA, and many of our Dems on the Judiciary Committee have gotten donations from record companies. Same with the Republicans, especially Orrin Hatch, who proposed creating a technology that could remotely destroy any computer that downloads music

[NYC Liberal]

28. Here's how I see it:

RIAA way overcharges for CDs.
People go online to illegally download songs.
RIAA sues downloaders.
Apple launches iTunes - songs and albums are much cheaper, people buy them legally.
Legal downloading is a huge hit.
RIAA wants to overcharge for online downloads.
People illegally download songs......

And over and over and over. You can't win with the RIAA.

[NashVegas]

31. Sure You Can Win

Just fuck 'em. Support live music or even better, make your own.

[Podface]

34. Faster than you think - the world is changing

Apple is now going flash memory. no need for that bulky hard drive anymore.

all the technology exists, and they have been negotiating with record labels actively for video content this year.

the real fun is when WIMAX is deployed over the next couple years.

WIMAX is like wifi, except one base station on a roof broadcasts broadband in a 5-10 mile radius.

so... in two years - apple may rule the video phone world too.

how aboout an wireless video ipod with ichat AV. Sweeeeeeet!