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Music Media Businesses Apple

MP3 Download Prices to Rise? 831

Posted by Hemos
from the bad-move dept.
OBeardedOne writes "The major music labels are in talks with music download services attempting to get them to increase the price of music downloads. " Sounds like there is division in the ranks of the music companies, but something to watch.
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MP3 Download Prices to Rise?

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  • by zackrentwood (828124) on Monday February 28, 2005 @12:41PM (#11803950)
    All of MP3 http://www.allofmp3.com/ [allofmp3.com] already went from $0.01/MB to $0.02. This is old news.
  • They are all rich, greedy bastards. Nothing to see here... move along.
  • prices? (Score:5, Funny)

    by MindDelay (675385) on Monday February 28, 2005 @12:42PM (#11803963)
    you mean we're supposed to pay for mp3s?
    • No, its just a funny joke.
  • Haven't we already gone over this a few months ago. They wanted to raise the prices but were not able to because they already signed long term contracts which restrict the price to be where it currently is? And wasn't the base price of the song 90 cents... with the distributor getting only a dime for every download? I remember reading that somewhere.

    Regardless, all this ruckus about music download prices increasing stinks of FUD from the non #1 music download stores who want to push their music subscriptio
  • working link (Score:3, Informative)

    by saleenS281 (859657) on Monday February 28, 2005 @12:43PM (#11803968) Homepage
    working link [clickability.com][clickability.com]
  • by tommyth (848039) <notdefinable.gmail@com> on Monday February 28, 2005 @12:43PM (#11803973) Homepage Journal
    I've never heard of this "404" record label. Or are they a group representing record labels? And why is /. affiliated with them?
  • by TrippTDF (513419) <hilandNO@SPAMgmail.com> on Monday February 28, 2005 @12:43PM (#11803981)
    From my standpoint, the piracy fire has not been put out yet. Increasing the cost of music is just going to push people away from paying for music.
  • illegal trust (Score:5, Interesting)

    by cooley (261024) on Monday February 28, 2005 @12:43PM (#11803982) Homepage
    If this isn't the very reason we have anti-trust laws here in the USA, then I don't know what is.
  • Wait... (Score:3, Insightful)

    by Avyakata (825132) on Monday February 28, 2005 @12:43PM (#11803986) Homepage Journal
    I guess the music companies still think free music is taking away from their profits, even though it isn't free anymore...
  • Link to CNN article (Score:5, Informative)

    by Tree131 (643930) on Monday February 28, 2005 @12:44PM (#11803994)
    Here's a link to CNN article [cnn.com].
    • by i_should_be_working (720372) on Monday February 28, 2005 @12:59PM (#11804221)
      The Financial Times, quoting unnamed music executives, said wholesale music prices, thought to be around 65 cents a song, were originally set artificially low in a bid to stimulate demand

      lol!. I guess for them it costs more than 65 cents to make a copy of a 4MB file and upload it to servers? This is utter crap. They actually expect us to believe that a digital version of a song is more expensive than it's CD version? Not that it is for us now, but if they raise prices...
  • by corporatemutantninja (533295) on Monday February 28, 2005 @12:45PM (#11804014)
    I just clicked on "View Source" to find the missing link. As it were. http://www.theregister.co.uk/2005/02/28/downloads_ price_rises/ [theregister.co.uk]
  • by Tackhead (54550) on Monday February 28, 2005 @12:45PM (#11804019)
    Gimme a simple backbeat. *thumpa, thumpa, thumpa* Aaw yeah, that's it.

    > The requested URL (%3CA%20HREF=) was not found.
    > > Nothing for you to see here. Please move along.

    Percent three, with a Cee-Ayy percent,
    Nothin' for you to see here.
    Percent twenty, Aitch-Arr-Eee-Eff,
    URL wasn't found.
    Slashdot editors makin' no sense,
    Nothin' for you to see here.
    Least it wasn't a duplicate H-ref,
    Time to move along.

    (If the article was workin' I'd know how much to charge you for reading this. Sheesh.)

  • by the_skywise (189793) on Monday February 28, 2005 @12:45PM (#11804021)
    Because the cost of manufacturing has...

    Er... Because they have to hire more employees to handle the purchasing load...

    Er... Because the Britney Spears needs a new swimming pool for her poodle... yeah!

    Isn't it time we just declare the RIAA a monopoly and start regulating it because, obviously, there is no competition.
    • by TheRaven64 (641858) on Monday February 28, 2005 @12:51PM (#11804110) Journal
      Isn't it time we just declare the RIAA a monopoly and start regulating it because, obviously, there is no competition.

      The RIAA is not a monopoly. They do not produce anything (although their members do), and so can not be a monopoly. They are a cartel. Not that that's any better...

    • by Vicsun (812730) on Monday February 28, 2005 @12:51PM (#11804111)
      Er... because price collusion is perfectly legal and ethical.
    • It's not a monopoly, it's price fixing/collusion/whatever. There are several different firms, so it can't be a monopoly.
  • by panic911 (224370) * on Monday February 28, 2005 @12:45PM (#11804023) Homepage
    Well I'm glad I don't pay for my mp3's :)
  • by theparanoidcynic (705438) on Monday February 28, 2005 @12:46PM (#11804026)
    I wouldn't pay more for legal downloads than what they already cost. If it costs the same as a CD I'll buy the CD if I want to be legit. A CD is lossless and comes with the little booklet anyhow. Plus, no (non-laughable) DRM.
    • No DRM? You must live in America.
  • by vapid transit (738521) on Monday February 28, 2005 @12:46PM (#11804032)
    If they raise prices they'll be even less competitive with the price of $0.00 that I currently pay per song.
  • Illegal? (Score:5, Interesting)

    by phorm (591458) on Monday February 28, 2005 @12:47PM (#11804051) Journal
    Wasn't the recording industry nailed for trying to force retailers to up the price for CD's. Wouldn't this be just as illegal for Mp3 downloads?
    • Re:Illegal? (Score:4, Informative)

      by shark72 (702619) on Monday February 28, 2005 @02:23PM (#11805401)

      " Wasn't the recording industry nailed for trying to force retailers to up the price for CD's."

      Kinda. They set up a MAP (minimum advertised price) program with Tower Records and TWE in which they helped pay for advertising if Tower and TWE agreed not to advertise the price of CDs for below a certain point. The MAP program started because Tower Records and TWE complained that Wal-Mart, Best Buy, etc. were putting them out of business by selling CDs at or below cost. When Wal-Mart and Best Buy found out about the MAP program, they went to the government.

      As another poster put it, "nailed" isn't the best term. The MAP program didn't affect the distributor price of the CDs, so the record labels didn't lose any profits as a result of being ordered to stop MAPping. The big winners here were Wal-Mart and Best Buy. The losers are indie and specialty record stores like Tower (who subsequently filed for bankruptcy), as Wal-Mart and Best Buy will continue to drive them out of business. Also among the list of losers is music fans who might be willing to pay a buck or two extra per CD for the opportunity to shop in a cool indie store with great selection, rather than having to deal with the Wal-Mart or Best Buy shopping experience.

      "Wouldn't this be just as illegal for Mp3 downloads?"

      It's a different scenario here, as in this case, the record companies are actually trying to raise wholesale prices. An equivalent to the price-fixing case would be if the record companies were now offering to help fund Apple's advertising if they agreed to only advertise tracks that sell for, say, $1.29.

  • Contracts... (Score:5, Informative)

    by somethinghollow (530478) on Monday February 28, 2005 @12:49PM (#11804082) Homepage Journal
    I think it was Steve Jobs who said Apple has contracts with the record labels to sell songs at .99. These contracts, if I remember correctly, were for at least 5 years. The same rumors [macobserver.com] happened last year in may. But, I guess we'll see what happens.
  • Link (Score:5, Insightful)

    by mushupork (819735) on Monday February 28, 2005 @12:51PM (#11804104)
    Here's one at CNN International [cnn.com].

    Labels are like OPEC...there's no competitive pricing among providers, just THE price for the product.
  • by AtariAmarok (451306) on Monday February 28, 2005 @12:51PM (#11804106)
    The files sold being referred to are mostly protected WMA, AAC, or Real files. Maybe some non-tech idiots think that all digital music files are MP3s, but these are the same idiots who think that all picture files are JPG's and GIF is a kind of peanut butter.
  • Profit Margins (Score:5, Insightful)

    by yetdog (760930) on Monday February 28, 2005 @12:51PM (#11804116)
    What REALLY pisses me off about this whole sham, is the fact that digital downloads are already pure profit for the labels. No packaging, distribution, or printing. Pure profit. And it's just not enough to fill their bloated CEO's coffers. Sue your customers for downloading illegally, but charge them an arm and a leg to do it the "right" way. Piss off, RIAA. You'll never see another dime from me.
    • Re:Profit Margins (Score:3, Insightful)

      by Leo McGarry (843676)
      That same argument has been applied to the pharmaceutical companies. It was bogus then, and it's bogus now. Yes, it only costs the company twelve cents to produce each pill. But that's only for the second pill. The first pill costs four hundred million dollars.

      When you say that "digital downloads are pure profit," you're assuming that the record company has already recovered its costs. This is practically never true. The only reason the record companies are able to stay in business at all is because a smal
      • Re:Profit Margins (Score:4, Insightful)

        by Twanfox (185252) on Monday February 28, 2005 @02:25PM (#11805432)
        The real problem is that when you sell the 3 billionth pill, they have recouped their costs to make that product. For a bottle of 30 pills, that's only about 111 million sales. Note, though, that even though they've recouped their costs, the price never quite seems to go down to the price of over-the-counter drugs.

        And while that's a fair comparison, to the music industry, that just doesn't apply. See, they 'advance' some amount of money to a band wishing to get its music produced. The recording studio then charges the band for use of their studio, which takes a huge chunk of money out of that advanced money. Net effect to the music industry? They paid a band some trivial amount, and got a set of songs recorded. They didn't incur any costs for the band making the recording, they charged them for it.

        While you can argue that there is money spent in manufacturing, sales, production, and getting the products on the shelves, often times 'early teasers' for up and coming bands are given for free to radio stations to give away and play on the air. How much does that cost, in terms of materials? Few thousand?

        Quite a bit of the money goes to people who don't really deserve it, the recording studio. It would be one thing if it were going to directly support the band, but unless you're a Big Name(tm), you generally don't have the clout or backing to negotiate terms. This hate against the recording studios isn't irrational, it is in some ways very legitimate. Convicted of price fixing, seeking to subsidize their own failures with the success of a few bands rather than simply dump said failed projects, and destroying any kind of copyright that the band holds over the music by getting legislation passed making such things 'works for hire'. Ya. These are really people that we want to do business with.
      • Re:Profit Margins (Score:5, Interesting)

        by Welsh Dwarf (743630) <d,mills-slashdot&guesny,net> on Monday February 28, 2005 @02:33PM (#11805518) Homepage
        And you're forgeting that 'production costs' are taken off the Artists 10%. Which means that by the time a record 'breaks even', the record company already has a 900% return on investement.

        There's a link in the /. archives that explains this in detail, but I'm too lazy to go look it up again.
  • Price Elasticity (Score:5, Informative)

    by irhtfp (581712) on Monday February 28, 2005 @12:53PM (#11804143)
    If they raise prices, it will drive more people back into Kazaaland. At the margin, some people will be willing to pay $.99 but not $1.09. The curve that describes this behavior is by no means linear. I would think that Apple has done a fair bit of research to determine where the optimal price point on this curve is.

    It will no doubt change as competition (i.e. Walmart, et. al.) enters the market. It's one of the most common fallacies in business to raise your prices to make more money (or conversely to have a sale). It takes careful research and testing to determine the correct price point to maximize profts. You can't just decide to raise more prices to get more money.

  • Hmph (Score:4, Insightful)

    by delta_avi_delta (813412) <dave DOT murphy AT gmail DOT com> on Monday February 28, 2005 @12:53PM (#11804147)
    The prices of songs via mp3 are already maintained at an artificially high price. This ensures that the price of downloading an album via mp3 is roughly synonymous with the price of purchasing the album in a large retailer. Since the user is paying for "shipping", and packaging and materials are non-existant, it seems to me that even dividing the pie between the distributor, the record companies, and the artists, there's more than enough to go around as is. There's no justification for asking us to pay more for mp3s. Perhaps if they paid for our cable connection...
  • I was hoping... (Score:3, Insightful)

    by Quiet_Desperation (858215) on Monday February 28, 2005 @12:55PM (#11804169)
    I was hoping to see the end of the album format, with the exception of concept albums or soundtracks or long classical works and such. Artists would just release a new song when they had one worth peddling.
  • by Shivetya (243324) on Monday February 28, 2005 @12:56PM (#11804181) Homepage Journal
    Actually I wonder what kind of contract Wal-Mart has with the major music labels? I would suspect that any increase in fee would first require voiding or extensive reworking of the contracts that are outstanding.

    My concern, if the labels get an increase in their fee what is too stop these retailers silently increasing their "costs" behind the scene?

    Frankly the labels get too much of a slice of the fee as it is. I would like to see how much is actually given to the artist per sale. I would suspect that a lot of older music gives less than a cent per sold song to the original artist.

    Higher than 99 cents? Only if I can get it in the format and quality I want. Only if I have a permanent right to have the song at my disposal. Get near 1.99 and it they can kiss the business model good-bye - which may be what they are after so later down the road the can release their own services.

    All this begs the question, if the per song fee increases what happens to the all-you-listen-to sites like Rhaposdy and Napster?
  • Can't be done (Score:5, Interesting)

    by redune45 (194113) <slashdotNO@SPAMredune.com> on Monday February 28, 2005 @12:58PM (#11804206) Homepage
    I don't know if people agree with me, but here's my rant.

    Currently on iTunes a whole album costs $9.99, now I can walk into a music store and get the actual CD for $14.99.

    Personally, if its only five bucks, I'd much rather have the CD. You get a pernament backup, the song lyrics and all of the other extras.

    If you buy it on iTunes, you have to make sure to burn it yourself or lose it forever, and you don't get the liner notes etc.

    Now, if the price per song increases, I'm guessing that the price of an album would increase as well. So that brings the price of buying the album online very close to the price of buying it from a brick and mortar store. So the arugment for buying online is even smaller.

    It will be interesting to see what happens here.
    • Re:Can't be done (Score:3, Interesting)

      Do you go to Best Buy when you're shopping for hardware, or do you go to NewEgg/TigerDirect/PriceWatch? Do you run out to Barnes and Noble whenever you hear about a book you'd be interested in reading? Do you go to.. I can't think of any stores that sell DVDs other than Wal*Mart, but do you go there or do you hop on Amazon?

      Getting stuff online is easier. It's faster. And, even if it's by a few cents, it's cheaper. I've spent over $300 in the iTMS and my iPod's got plenty of room left (for my "other"
  • by Jjeff1 (636051) on Monday February 28, 2005 @12:58PM (#11804208)
    I read an article about this. It seems one of the reasons for the cost increase is to compete with ringtones. Ringtones are going for 2 or 3 dollars each, or you can get a subscription for 3$ a week.

    This of course is insane. 2 or 3 dollars for a ringtone out of my tiny cel phone speaker is barely even something you can call a song.

    Anyway, that's the logic behind it. Ringtones don't target people who want music. They target people who need to be hip and with the pop culture, so clearly people behind this are missing things.
  • by PhotoBoy (684898) on Monday February 28, 2005 @12:59PM (#11804231)
    ... but why title this "MP3 Download Prices to Rise"? Can you actually legally download MP3s these days? Allofmp3.com sounds decidedly illegal and everyone else offers various flavours of DRM restricted shite. Surely "online music stores to increase prices" or something would be more accurate?
  • Simple solution... (Score:4, Insightful)

    by Sebby (238625) on Monday February 28, 2005 @01:00PM (#11804240)
    Apple (or another store) should drop any labels that want to increase price.

    Sure this could drastically decrease their count of their catalog, but the labels might get a clue: 20% more of no sales is $0. Then they'd be begging to be added back with the old price.

  • by mad.frog (525085) <stevenNO@SPAMcrinklink.com> on Monday February 28, 2005 @01:00PM (#11804243)
    IMHO, the prices are too high already, at least for me.

    At a buck a track, I *might* consider buying 'em if they were losslessly encoded at at-least CD quality, and included metadata, "liner notes", etc... basically all the goods I can get at roughly the same price in a physical CD.

    But in a lossy, DRM-infested mess... why the hell would I pay the same amount?

    If they get the price down to 25 cents... or maybe even 50!... then I might consider it. Until then, it's back to the used-CD bins at Amoeba for me.
  • quick thoughts (Score:3, Insightful)

    by jdunlevy (187745) on Monday February 28, 2005 @01:01PM (#11804259) Homepage
    the article: [theregister.co.uk]
    Universal and Sony BMG are less keen to put prices up
    I can't imagine it will happen, but it would be interesting if Apple were to let TimeWarner and EMI (if they're the ones that want it) titles go up in price but keep Universal, Sony BMG, and independent titles at the current 99 cents retail. Watch TimeWarner and EMI online sales dry up -- to the benefit of the labels keeping retail prices at 99 cents!

    the article: [theregister.co.uk]

    The music industry is apparently unhappy with Apple's increasing share of the market
    What? Thanks largely to Apple, the "music industry" now actuall has a market. Without iPods and iTunes, and the Apple Music Store, this money -- 65 cents/song wholesale times some HUGE number -- wouldn't be going to the "music industry" at all.
  • by SamSeaborn (724276) on Monday February 28, 2005 @01:03PM (#11804280)
    I can't remember the last time I downloaded a song "illegally".

    Since iTMS came to Canada I just spend the 99-cents (that's about 82-cents US, by the way) -- it's much quicker, easier and instantly satisfying.

    But if they bumped it up to, say $1.20 per song -- I'll probably go find me an eMule client -- not that much more money, but psychologically 99-cents seems negligable. Above a dollar? That's real money.

    Sam

  • Some questions... (Score:5, Insightful)

    by singularity (2031) * <.moc.liamg. .ta. .tramlawon.> on Monday February 28, 2005 @01:05PM (#11804316) Homepage Journal
    The music industry is apparently unhappy with Apple's increasing share of the market - the firm sells about 65 per cent of songs sold online. The arrival of cheaper iPods is likely to give the firm an even larger share of the market.

    I do not understand the music industry's complaint here. Someone (Apple) is selling their music online and they are unhappy about this? Were they complaining when Virgin, Best Buy, and Tower Records were gobbling up the physical CD market?

    What complaint could the music industry have against Apple? As long as the music is being sold, what does the music industry care? They agreed to Apple's contract.

    Cheaper iPods will also lead to Apple selling MORE songs. That is the reason that Apple will have more of the market. Yeah, the music industry definitely has a right to complain - one of their resellers will be selling a lot more of their product. Gotta hate it when that happens.

    Meanwhile it was confirmed on Friday that the European Commission is investigating allegations that British consumers are being ripped off by Apple's iTunes service because it charges more for downloads from the UK site and does not allow punters to buy tracks from other country's iTunes sites.

    I always thought that a Brit's inability to buy from another country's iTunes store is because of licensing restrictions. That is, that Apple is not allowed to sell a song to a Brit that Apple only has the French distribution rights to.

    I suppose the EU is supposed to rectify a lot of these problems, but I daresay that the contracts between Apple and the music industry follow the older, country-specific licensing agreements.

    How much of this could also be chalked up to England still using the Pound, and not going over to the Euro? Will the EC only be happy when it costs EXACTLY the same in England (with the pound) as it does in France, with the Euro? Would Apple have to change prices daily to keep up with the exchange rate?

    (Yes, I realize that English iTunes is still way too expensive in comparison and should be brought down. I am just not so quick to blame Apple. Maybe the contract the music industry came up with in England just charges Apple more per song?)
    • by DrSbaitso (93553) on Monday February 28, 2005 @01:28PM (#11804621)
      The RIAA doesn't want any one company, be it Apple or anyone else, to get too much of the market. That would give them too much bargaining power! With a bunch of weak market shares, the RIAA can dictate its wholesale price. Now, Apple can tell them it won't pay a higher price and have the muscle to back up its threat.
  • by Jtheletter (686279) on Monday February 28, 2005 @01:13PM (#11804399)
    From the article (emphasis mine): One top label said it would not raise wholesale prices now because the market was not yet mature enough for an increase.

    This statement right here says it all. One might initially read this as a bit of sane thinking from one of the labels re letting the industry grow, however when you think about what it means you see that the greater plan is more stifling prices.
    The only current cost increase that the RIAA could justify is annual inflation. Their distribution costs are taken up by the online reseller (iTunes, etc), their printing costs are essentially zero, just convert a master song copy to digital format and deliver to online distributor once. And their advertising costs remain the same since they are not (to my knowledge) producing any advertisements that forward online music buying specifically.

    The only explanation for the price increase is that they simply want more for the same or less service. And the wording of the one abstaining record label here says it all: not yet mature enough. i.e. They planned to milk consumers for all they possibly could once it caught on, but most of them have gotten tired waiting for the plan to come to fruition and have jumped the gun. In other words if they had waiting another X years/Y% user increase/[insert marketing threshold here] then everybody would have been on board for this as they'd planned it all along.

    Could someone who is a lawyer or has the time to research the appropriate links please explain how the RIAA in doing this is NOT acting as a monopoly or cartel? As I understood it, price fixing by an industry that is not justified by some external cost increase is explicitly illegal, regardless of whether it's a smokey back-room deal or done in the public eye under the guise of an "association".

  • by DarkEdgeX (212110) on Monday February 28, 2005 @01:16PM (#11804450) Journal
    $1 per song sounds OK because it's at that magical price point where most people will just say to themselves "Ahh, it's just a buck". The thing is, $1 per song is a bad deal. Let's assume the average number of tracks (songs) per CD is 12. If you wanted to get the full CD, that's $12. Except now you're getting it in some lossy format (AAC/MP3/WMA) that may be DRM'd (I'm thinking of other online music retailers like Wal-Mart, which I think uses Windows Media Audio (not sure if it's DRM'd or not)).

    I know that not everyone wants every track, but when you're getting it in a lower quality format and at your own expense/time (bandwidth/time taken to download) $1 is a bit of a rip off.

    If anything, the price should be dropping to $0.50 or $0.75. That'd actually encourage people like me to use these online services. And you'd think the music industry would like it because it's less physical content they have to manufacture and ship out to stores.

    Hiking the prices just goes to show people that they can't trust the music industry, and that any trust that was fostered was misplaced.
    • Well, for some clarification, you can get a bit of a deal when you buy the whole album, usually $9.99, to make it cheaper than physical media. Similarly, if they were for some reason to have those strange sound effects CDs with 300 tracks on them, they'd still probably give you the whole set of tracks for 9.99.
    • It seems to me that, from the point of view of the record labels, when most people buy a CD they are paying 15 bucks for the 1 or 2 songs they know and like. The others are just lagniappe. So, again, from the point of view of the labels, they are dropping the current per-puchase revenue from 15 bucks to a single buck.

      BEFORE you shout "FLAME ON", Johnny, I'm not saying I think this is a GOOD THING, just that it may be how the record labels view it. It explains why they are so against music downloading.
  • Milking the market (Score:3, Insightful)

    by a3217055 (768293) on Monday February 28, 2005 @01:19PM (#11804495)
    The main idea is to milk the market. Have a bunch of recodrings for every major age group, from youngsters, teen, college students, 25+ , 35+ etc... and make them pay $15+ for them.

    And then charge the group with the most demand inelasticity the highest price, this is even more than the $15 ammount. The RIAA does not understand that the the music industry is changing; or believes they can still stop the change and it is a matter of time before they change or be changed. They will fight tooth and nail so they can reap their profits.

    After all record companies make money from borrowing money from financial institutions. And these institutions charge them interest rates, and these institutions want their money not matter what this includes the 10% interest etc...

    Also due to the extreme large spectra of artists the quality of music has gone to the euthanasia clinic. Way too many young inexperinced people playing the tune of the music producer. Most people listen to this stuff because they have no alternative choice; for background music. Let the RIAA milk the market, it is time we put a cieling on the price of music. I say no less than 50cents and no more than 99c. And have certain protections for the consumer. I mean there are two ways to make money, charge a higher price or sell more units. Selling more units that is to create demand is hard when all you have to sell is crap so they do option number 1) ; which is to raise the price.

    It is time most consumers got smarter and said hell with the current distribution. The RIAA is nothing but a conglomertation to give people the illusion of happiness, after which they will milk you for your money.

    Let them raise prices and let's see what happens... there will be less songs sold.
  • by Sj0 (472011) on Monday February 28, 2005 @01:43PM (#11804810) Homepage Journal
    "Listen guys, we've been over this a thousand times before. We don't really want to sell music, we want to screw people, and you guys selling popular music at reasonable prices really cuts into the number of college kids we can sue for downloading music!"
  • I dont buy cd's.. (Score:4, Interesting)

    by SlashDread (38969) on Monday February 28, 2005 @01:43PM (#11804816)
    because they are too expensive, and way to little goes to artists. MUCH too much seems to go to "distribution".
    Yeah, Im gonna pay MORE on a digital download. Where "distribution" can be almost cost-less. Sure. Uh-huh.
  • by porcupine8 (816071) on Monday February 28, 2005 @01:44PM (#11804821) Journal
    IF it included paying slightly less for back catalog songs as well as slightly more for the top 40 or whatever. Hardly anything I buy is a recent hit, and I can easily wait til a single is off of the charts to buy it if I do want it. If I could get older songs for 10-20c less I'd certainly buy more of them.

    Unfortunately, it sounds like what the record companies want is to just raise prices on the popular songs and keep the 99c price on the older songs... I don't think that would be a smart move. There are enough people who think 99c is *barely* an acceptable price for a single song, once you go over the dollar barrier I think they might see sales drop enough to balance out the extra few cents. If they lowered prices on older songs (even only ones, say 5 years or older), though, they'd probably make it up through increased sales on that music.

  • by macemoneta (154740) on Monday February 28, 2005 @02:08PM (#11805217) Homepage
    How can the music industry justify charging more than about $0.05/track?

    I get my DVDs through Netflix, and pay about $1 per DVD (the whole thing, with any extras that may be on the disk). Netflix recently lowered their price (so now I pay about $0.90/DVD). Those are regular, effectively unprotected DVDs to watch anyway and on any device I choose (I sometimes rip them and watch them on my PDA).

    Blockbuster and Walmart are competing for the same customers, and they charge even less.

    CD music costs a lot of money to produce, but it doesn't cost 100th as much as a major movie (probably less than 1000th). Why are people paying so much for so little? Where is the perceived value?

    I stopped buying major label CDs a few years ago, but increased my DVD rentals dramatically. There's no value in pirating DVDs at those prices. Studios are even moving the DVD release data closer to theatrical release (to reduce their costs).

    While movie industry seems to be adapting, the music industry seems to be engineering their own demise. Not that anyone will miss them. Independent artists seem to be where the good music is these days, and they are much more reasonable in pricing their product.
  • by Datasage (214357) <DatasageNO@SPAMtheworldisgrey.com> on Monday February 28, 2005 @02:20PM (#11805377) Homepage Journal
    There is something wrong, when my musican friend in malaysia can produce an album for under $10,000 while its almost impossible for a major label to produce it for less than $150,000. Yes there are ecomonic diffrences, but last i checked, it was not that great.

    Listening to his album, most of the songs are good. When is the last time you bought a major album with more than one or two good songs? I thought so.

    Record labels go for quanity, not quality. If they can get an artist to make an album with a couple hits but mostly filler, they can save other hits for other albums. Then they get consumers to pruchase all albums when they were only going to listen to a couple tracks.

    Single downloads kill this model. Because now its possible for consumers to download the hits, and just leave the rest of the tracks be. The idea of raising prices is to get the album revenue out of just the hits.

    This may work if they take an adaptive pricing model. They charge alot for the hits, and less for the misses.

    The music industry is changing. Label, relying on album sales and licencing revenue, are in a bad postion. Artists dont make much money off of album sales as it is, but it helps promote them and thus increases thier other revenue sources such as concerts and sponsorship.

    Label will have to move from an album sales company, to a promotional/financing services company. If they dont, they will become insignificant. But on the other hand, if they still can keep getting musicans to sign stupid contracts and keep funding and create another revenue source by sueing pirates, they might be around longer than they should.
  • by SPYvSPY (166790) on Monday February 28, 2005 @03:21PM (#11806050) Homepage
    This story really shouldn't be filed under Apple at all, but it caused me to (once again) think that the headline was quoting Apple Computer Inc. I know Slashdot is determined to be the most asinine useful web resource on the net, but why do section stories under Apple have headlines that misleadingly attribute quotations to Apple?!
  • Supply and Demand? (Score:3, Interesting)

    by The-Perl-CD-Bookshel (631252) on Monday February 28, 2005 @03:30PM (#11806143) Homepage Journal
    Clearly, simple supply and demand does not work here. Take a normal example: McDonalds could sell millions more Big Macs if they lower the price to $0.50, but they wouldn't want to because they are not equipped to deal with that demand and their current operating assumptions work at the $2.00 price.

    However, in this case, there is almost unlimited capacity to scale the operation. Why not take advantage of this new market condition like Vanderbilt did when he revolutionized the steamship industry. [wikipedia.org] He sold tickets for a lower cost and padded his slim margins by adding value and revenue to the trips by selling food and drink. The record labels wouldn't even have to sell other services because they easily cover their operating margins.

    The record companies are in the unique position to lower the cost of a song to say, $0.75 and take advantage of almost costless scaling. Why wouldn't they?

    The simple answer I can think of is that the quality of the product that they offer is so poor that exposure to this music will lead to less return business. Take a tip from the late, great Sam Walton and discover the power of discounting. [wikipedia.org]

  • by melted (227442) on Monday February 28, 2005 @03:32PM (#11806161) Homepage
    You can buy a used CD on half.com for $8-10, delivered to your goddamn door. That's uncompressed, un-DRMd audio, and the booklet is included, too.

    They should sell the stuff they're smoking instead, it's apparently very strong.
  • What a racket! (Score:4, Insightful)

    by Inaffect (862616) on Monday February 28, 2005 @03:42PM (#11806251)
    The precise reason that illegal file sharing of music has been so popular is because music has been overpriced for a long time. Once these labels recover the initial production costs of the album, it is nothing but profit. Most concerts are organized for the artist to make a buck, but even then the labels take the lion's share. The labels seem to enjoy profiting at the expense of both the listener and the artist. People who avoid buying music at all costs simply see through this. The others don't, which is why you see a bunch of crap on the Billboard charts and particularly the iTunes "Top Downloads". Who is buying this crap? Not anyone with a brain

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