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Apple Holding Back the Music Business? 705

Posted by Zonk
from the how-dare-you-use-technology dept.
conq writes "With average weekly download as of Nov. 27 sales down 0.44% vs. the third quart, BusinessWeek speculates that Apple might in fact be holding back the music industry." From the article: "As has been true since the start, iPod owners mostly fill up their players from their own CD collections or swipe tunes from file-sharing sites. Now legal downloads may be losing their luster. According to Nielsen SoundScan, average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter. Says independent media analyst Richard Greenfield: 'We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players.'"
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Apple Holding Back the Music Business?

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  • And if you don't know why, search this site for "RIAA"
    • by kherr (602366) <kevin@pupDEGASpethead.com minus painter> on Tuesday December 13, 2005 @05:34PM (#14250603) Homepage
      This is such a load of crap. It was RIAA who insisted on DRM before Apple could offer music. So Apple developed FairPlay to make RIAA happy, and thus was able to get all of the music we see in iTunes Music Store. This is whining because of the monster that was created. Apple owns the only really successful online music store. Apple owns the only portable music player that works with FairPlay. Music labels can easily get around this by dropping the need for DRM.

      This is exactly the lock-in future that DRM brings to the world. The music labels are crying bitter tears because they don't control the locks. Whaa whaa whaa. What would be different if Sony had succeeded instead of Apple? Do we think we'd be seeing Sony offering whatever they had to everyone? No. DRM simply sucks. It's anti-consumer, anti-competitive and restricts the growth of the marketplace. Reap what you've sown, you greedy bastards.
      • This isn't the music labels whining this time. This was Napster complaining that you can't load Napster purchased song onto an Ipod. You think the Record labels would really complain if people were to "mostly fill up their players from their own CD collections." That means more CD sales.
        • by samkass (174571) on Tuesday December 13, 2005 @06:22PM (#14251173) Homepage Journal
          In fact, the music industry would LOVE it if Apple freely license FairPlay. Then they win, and consumers lose. Right now FairPlay is keeping RIAA in check because it's basically a choice between FairPlay or stolen music for 90% of digital music player customers... so you get things like 0.99/track and such. If Apple freely licensed FairPlay, it would be you against the record labels directly, and they'd be free to charge $4.99/track for the latest pop crap because if one service didn't license it for that price, another would.

          In effect, Apple's monopoly is working against the music labels' monopoly. If you take Apple's DRM monopoly away, consumers get screwed.
        • by Red Flayer (890720) on Tuesday December 13, 2005 @06:23PM (#14251182) Journal
          "You think the Record labels would really complain if people were to "mostly fill up their players from their own CD collections." That means more CD sales."

          I filled my MP3 player with music from CDs I already owned. Haven't bough a single song online, haven't bought a new CD in 6 months.

          Quite simply, I have enough music to never get sick of what I own. And since it's all easily at hand, I'm even less likely to get bored with it. I have downloaded some music that is being distributed free of charge by the copyright owners, but that's it.

          Now that its so easy for people to access their own library, the music industry needs to do more to get me to spend any money.
          • by soft_guy (534437) on Tuesday December 13, 2005 @09:07PM (#14252462)
            In your case, it sounds like you've "outgrown" buying more music. You aren't into new artists or looking forward to new records coming out.

            To get my 70+ year old father to buy more music, you'd have to bring Bob Wills back from the dead to record another album.

            I don't think you or my father are the kind of customer the RIAA is trying to attract.
            • I don't think you or my father are the kind of customer the RIAA is trying to attract.

              No? I'm not the guy who wrote the comment you're replying to, but I'm in the same boat. You really think the RIAA doesn't want to attract thirtysomething males with scads of disposable income? Maybe you're right - maybe they don't care about actually getting people who have money to spend, but that's really their problem, isn't it? Shouldn't they be doing something to attract people like me?

              I actually do still buy musi
        • by SeaFox (739806) on Tuesday December 13, 2005 @07:08PM (#14251591)
          You think the Record labels would really complain if people were to "mostly fill up their players from their own CD collections.

          Yes. Because they'd rather have me buy two copies of each song I want to listen to.
  • by Thud457 (234763) on Tuesday December 13, 2005 @05:25PM (#14250468) Homepage Journal
    My Ipod's full, I can't buy any more music!
  • Absolutely Correct (Score:2, Interesting)

    by whargoul (932206)
    I use my own CD collection - NOT illegal downloads
    • by op12 (830015)
      I use my own CD collection - NOT illegal downloads

      The article mentions this too....how does that hold back the music industry? They're still making money (and probably more per song than through Apple) on people buying CD's.
      • by Ucklak (755284) on Tuesday December 13, 2005 @05:46PM (#14250765)
        The article mentions this too....how does that hold back the music industry? They're still making money (and probably more per song than through Apple) on people buying CD's.

        Because those greedy bastards want a nickel EVERY TIME YOU HEAR THE SONG

        • by forgoil (104808)
          Preferably at all other times as well. When are they going to realise that the single biggest reason why people aren't spending more money on music is the fact that a handful of music stars and music industry bosses already have taken all the money. People just don't want to spend that kind of money on music anymore, and why should they? It has never been cheaper to copy music, and in fact, that is what people are doing. They are willing to pay the hardware price, but no longer the software price.
    • by Golias (176380) on Tuesday December 13, 2005 @05:33PM (#14250587)
      This is a case of unreasonable expectations.

      When CD's came out, the vast majority of music lovers replaced the albums they already owned with new CD's.

      I seriously think that there are music execs out there who were hoping that a new format (downloaded music) would mean that we would all want to buy our entire music collections all over again, in spite of the fact that the power is in our own hands to convert files this time.

      Consequently, the back-catalog sales are absolute shit compared to what the early days of CD's were like. Lots of people are using iTMS to buy songs from Fountains of Wayne, Death Cab for Cutie, and/or the latest pop princesses, but nobody's re-buying the old Pink Floyd albums they already own in another format, and that's what's driving them nuts.

      Why, we even have the audacity to BACK UP our media files, so we no longer need to buy a new copy every few years because of loss, damage, or wear. It's KILLING their sales numbers.
      • Entitlements (Score:5, Insightful)

        by Anarcho-Goth (701004) * on Tuesday December 13, 2005 @05:48PM (#14250791) Homepage Journal
        Simply put, record company execs are looking for entitlements.

        Ultimately, they think they are intitled to make a profit every time someone listens to a song under their umbrella, or iron fist.

        So if I own a lot of LP records, and want to listen to them in the car (car turntables are not very stable unless you drive really carefully) they cry "No Fair!" and get a tax put on casset tapes.

        If this were really about piracy, that would be the only thing they would mention. The fact that they are complaining about people filling up their iPods with music that they already have a legal right to tells us what is really on their mind. They feel entitled for people to buy music all over again. And in another 10-20 years they will propose yet another format and expect it over again. Like a corrupt utility company, or a corrupt government, record companies want the right to tax us and then keep that money for themselves.

        With any luck Artists will control their own music, and profit from it by then and the record companies will be dead.
        • Re:Entitlements (Score:3, Informative)

          by notthepainter (759494)

          o if I own a lot of LP records, and want to listen to them in the car (car turntables are not very stable unless you drive really carefully) they cry "No Fair!" and get a tax put on casset tapes.

          Chrysler had the http://www.imperialclub.com.nyud.net:8090/Repair/A ccessories/HiWay/invent.htm [nyud.net] Highway Hi-Fi in 1956. The link implies that it even played on bumpy roads! It was a commercial failure not because it skipped, but because of a poorly marketed format change! The article is a good read, good geek l

        • Ignorance is bliss (Score:3, Insightful)

          by geekee (591277)
          "With any luck Artists will control their own music, and profit from it by then and the record companies will be dead."

          If ignorance is bliss, you must be very happy every time you contemplate the music industry, or economics or business in general.
        • Seriously. (Score:5, Insightful)

          by commodoresloat (172735) on Tuesday December 13, 2005 @07:57PM (#14252003)
          This reminds me of the "Apple is dying" hogwash. iTMS sales are down a bit so now Apple is holding back the music industry? Give me a break. It if wasn't for iTMS, the music industry's main mode of doing business with the internet would be the same as it was in 1998-9 -- suing the hell out of Napster, Gnutella, etc. users, and extorting money from anyone forward-thinking enough to invest in such endeavors. Apple came along and showed the industry that there was a way to make money selling legal downloads, and now they are bitching that it's not enough. They want the price raised; they want more DRM; they want more restrictions and more costs added until we are paying full album sticker price every time we listen to a song, and they're still complaining that sales are going down. Even then it won't be enough for these greedy corrupt egotistical blowhards. Given their attitude they should be happy anyone buys any music from them at all.
      • Exactly (Score:5, Interesting)

        by sterno (16320) on Tuesday December 13, 2005 @05:48PM (#14250799) Homepage
        The problem the music industry is facing right now isn't a decline in the sales of new music, it's just that their cash cow of back catalog replacement sales is withering. They had intended to salvage this buy going with DVD Audio and trying to get people to re-buy everything yet again.

        The problem for them is that there's nothing compelling about new music formats other than MP3/AAC. DVD Audio may be wonderful, but to the average person who just wants to listen to some music in the car, or while working out, it doesn't matter. The high end audiophile types might get into it, but there's not enough of them to create the necessary economies of scale.

        I would argue that Apple/ITunes is boosting new music sales because it makes it so incredibly easy. If I find a new artist, I can e-mail you a link, you click it, and 30 seconds later, you're downloading the new music. No trips to the store. No forgetting about that cool new album your friend recommended. Plus the IMixes give another way to find music you might not have bought before.

        So it is good for the music industry in the long run, but they have to learn to accept the fact that the crack pipe of back catalogue music sales is running out of smoke. It's going to be hard times for them for a while because even with growing new album sales, they're likely to see an ongoing decline in revenue.
      • nobody's re-buying the old Pink Floyd albums they already own in another format

        I don't know how many years it's been since my last copy of "Dark Side of the Moon" was either liberated by a roommate or just otherwise lost, but I bought that album from the ITMS just last night, along with some vintage Elvis. Before that, I bought some Miles Davis, Van Cliburn's Rachmaninoff Preludes, and the Fleetwood Mac Rumours album for what must be the seventh or eighth time in the past 30 years.

        I owned my 30G iPod P

      • by Prospero's Grue (876407) on Tuesday December 13, 2005 @05:56PM (#14250891)
        I seriously think that there are music execs out there who were hoping that a new format (downloaded music) would mean that we would all want to buy our entire music collections all over again, in spite of the fact that the power is in our own hands to convert files this time.

        The music industry insists that we all should buy our music collections all over again. It's legal to copy the CDs for your own use - just as it's legal to copy DVDs for your own use.

        That's why the laws to make it illegal to break encryption - it was a way around consumer rights. You can rip DVDs for your own use, but you can't break encryption, and the movies are encrypted.

        This nonsense of attempting to DRM CDs is just the music industry trying to play catch-up. Trust me, I've ripped my 200+ CD collection, and the music industry would have me pay for every single song a second time.

      • I actually just bought several Pink Floyd albums on iTMS. These were albums that I used to have on cassette tape, copied from friends' CDs and tapes. So, the recording industry made money not only on the subsidies they get from the sale of blank cassette tapes and dual cassette decks, but then also on the legitimate copies I eventually bought on iTMS.

        But iTMS is killing the industry! Legal music downloads were down a whopping zero-point-four-four per cent since the previous quarter! (For anyone who can't

    • by Anonymous Coward on Tuesday December 13, 2005 @05:41PM (#14250700)
      I am the same way and for a very practical reason: the quality (sound quality) of digital downloads is inferior to that of a CD. If Apple were to offer high quality downloads (using the Apple lossless format for example) I would start buying downloads even if the per song price were over $1. Maybe they could offer the "standard" 128k AAC files for $1 and the "audiophile" Apple Lossless files for $1.50 or even $2.00. For a lossy compressed format, ~200kbit VBR MP3 is the minimum I will accept. (I encode my own CDs using LAME preset standard and that seems to average out around 200k.)

      Also, they need to come up with a solution to the "segue" problem. Many albums are mixed such that one track segues smoothly into the next. You get this when you buy the CD. When you buy digital downloads you get hiccups (gaps) between the tracks. Kludges like a crossfade in the MP3 player are not acceptable. I want the exact segue as mixed on the original CD!

      There are two pieces to fixing this: the files themselves need tags indicating that a segue exists into the next track from the album and, for compressed audio formats, there needs to be a tag indicating any "gap" (coding delay or frame padding) at the beginning and end of the file such that the MP3 player can strip this off during playback. (The LAME encoder does this and so you get gapless playback on an enabled player eg Foobar2000.) The other item the tags should contain is a recommended fadein and fadeout to use when a track is not played among the other tracks of that album. That way you dont get abrupt cutoffs when playing songs in shuffle.

      Did I mention I still buy music on CD? Lots of it too!
  • Silly (Score:5, Insightful)

    by lewp (95638) * on Tuesday December 13, 2005 @05:26PM (#14250485) Journal
    Oh no! Downloads are down less than 1% since the third quarter!

    Seriously, it's right before Christmas, as the article points out. Nobody's going nuts buying music because they're spending all their money on presents and other holiday shit. Apple says they're selling a crapload of gift cards, and I believe them, given that everything iPod seems to fly off the shelves, virtual or otherwise. Regardless, since you no longer have to buy the physical media songs come on, there's no reason to buy them when you're doing your normal Christmas shopping, so sales very well *should* be down.

    iPod sales are nuts, as usual, but that doesn't mean that music has to be selling, either. How many people you know, out of those who have bought iPods recently, are buying their first one? I'm sure a large portion of whatever iPods they're selling are peoples' second or third such devices. They're not going to be re-buying songs just because they got a new player, at least for now...

    All this amounts to is another chance for the music services that lost (and it was pretty much over before they even got started) to bash Apple in a futile attempt to gain some traction. It's pointless, though. There's no buzz about Napster or Rhapsody, it's all iPod, iPod, iPod, for better or worse.
    • Re:Silly (Score:5, Insightful)

      by yog (19073) on Tuesday December 13, 2005 @05:40PM (#14250673) Homepage Journal
      Agreed, this article is a little off the mark. Apple is a pioneer in this field and inevitable there are going to be some shifts as the industry adjusts itself. Certainly it makes more sense to sell some tunes for different prices, just as movies tend to sell for more at first and then end up in the discount bin when they're old hat.

      I think by demonstrating that it's possible to be a profitable "middle man" in the online music business, Apple has in fact saved the tushies of the music companies by offering an alternative to napster-like music trading systems. This exemplary system can be emulated by the music companies, if they so wish and assuming they have the intellect and vision, or they can go through Apple or Real or whoever else jumps in (Microsoft, probably).

      The iPod would not have succeeded if Apple had tied it strictly to their iTunes database and disallowed any other formats. The secret of success for any great product is its power to do one thing really well and flexibly, emphasis on the latter. They had to let people rip CDs to their iPods, and of course that will lead to trading and avoiding paying for tunes, but it also allowed the iPod to revolutionize the "walkman" generation's listening habits.

      Business Week is a pretty astute publication but this is clearly a case of short term-ism getting in the way of seeing what a revolutionary product the iPod really is--and now they're doing it again with videos. Should be interesting to see where they go with this. I think iPod may eventually absorb the cell phone and handheld organizer and we'll see excellent high capacity, wifi/cell-enabled personal bliss bars in everyone's shirt pocket in a few years.

  • Not that bad... (Score:5, Insightful)

    by rwven (663186) on Tuesday December 13, 2005 @05:27PM (#14250494)
    Well, 0.44% is not too much to whine about (less than half of one percent?) It could be that maybe a lot of popular *new* music didn't come out during that time compared to the quarter before.

    Not to mention a lot of the MP3 player sales they're basing their estimates on could have been bought as Christmas presents.

    I think they just WANTED a big growth in sales and things just don't always work out that way. They should compare things year to year, not quarter to quarter...

    That's my $0.02
    • by Potent (47920) on Tuesday December 13, 2005 @05:31PM (#14250572) Homepage
      Could it be that music just sucks 0.44% more than the previous quarter? :)

    • Re:Not that bad... (Score:5, Insightful)

      by slashname3 (739398) on Tuesday December 13, 2005 @05:56PM (#14250880)
      You hit the major points in your post. It is the Christmas season and a few people are spending on other things than music or are to busy to buy more music. And a good percentage of those iPod purchases are probably Christmas gifts (or should I say Holiday gifts, is the word Christmas allowed anymore?).

      This smacks of another jab from the music industry trying to cry about how they are all going to go out of business because people can download songs for a dollar. The sad part is some congress critter out there that gets huge amounts of money under the table from the recording industry will use this to launch some legislation that will impose unrealistic and unenforcable laws on everyone.
  • by AltGrendel (175092) <ag-slashdot@e x i t0.us> on Tuesday December 13, 2005 @05:27PM (#14250496) Homepage
    I would suspect that people have enough of what they want to hear.

    For now.
    That's all.

  • by Anonymous Coward on Tuesday December 13, 2005 @05:27PM (#14250502)
    I am sure sales will pick up as soon as Apple starts charging "market price" for the music per the wishes of the music industry. :/
  • by daeley (126313) on Tuesday December 13, 2005 @05:28PM (#14250507) Homepage
    The second "critic" expert they decided to ask said this:

    "The villain in the story is the iPod. You have this device consumers love, but they're being restricted from buying anything other than downloads from Apple. People are bored with that."

    Who was this expert?

    None other than Chris Gorog, CEO of Napster Inc.

    Yeah, Chris, people are *real* bored. And by people, you mean you and your cronies, and by bored, you mean not making enough money for your tastes.

    I would expect more out of BusinessWeek.
    • by nelsonal (549144) on Tuesday December 13, 2005 @05:43PM (#14250730) Journal
      Business Week is the least capitalistic of all the business magazines. Their core reader is the useless MBA whose sole function is gumming up the works while collecting one more paycheck toward retirement. You can disagree with the Economist and WSJ but at a minimum they are anti-government intervention in all ways (good and bad for business). I generally find myself in agreement with the libertarian ethos of those, but can't stand the editorial bent of businessweek. Businessweek is pro corporate welfare but anti government intervention in anything that might hurt business.
      They are protectionistic, rearview focused, and generally useless for even lining a bird cage. The sole redeeming feature is that they are pretty good at calling the top of a mainia (by focusing on why you should be there now).
      It has always surprised me that the music companies blessed Apple's entry into music, when the most basic sales calculations were demonstrating that the iPod was the thing that legitimized the public use of shared music for a large subset of mainstream consumers.
  • Be my guest (Score:5, Insightful)

    by iamacat (583406) on Tuesday December 13, 2005 @05:28PM (#14250509)
    Critics say Apple's proprietary technology and its refusal to offer more ways to buy or to stray from its rigid 99 cents a song model is dampening legal sales of digital tunes.

    If music industry is considering non-propietory technology and prices below 99 cents/song, there is nothing Apple can do to prevent that. All they have to do is put their stuff on mp3tunes.com
  • 0.44%!!! (Score:2, Interesting)

    by Nighttime (231023)
    0.44%? Oh no! The sky's falling in. Good job it wasn't 1% or we'd be back to the days of the Great Depression with music execs throwing themselves out of windows. Sheesh! 0.44% is within statistical variance.
  • by jaymzter (452402) on Tuesday December 13, 2005 @05:28PM (#14250519) Homepage
    FTFA: As has been true since the start..
    What exactly is this generalization based on? It basically implies that all individuals owning an ipod/mp3 player are copyright infringers from the get go. Then, just because sales are down for a quarter, it's the sign of the Apocalypse! Are they not teaching logic in schools anymore?
  • Too Expensive (Score:5, Insightful)

    by EEBaum (520514) on Tuesday December 13, 2005 @05:28PM (#14250522) Homepage
    When downloads start costing significantly less online than on CDs (just like CDs should cost significantly less than CDs) people will buy quite a bit more.
    • Re:Too Expensive (Score:3, Insightful)

      by Nerdposeur (910128)
      I heartily agree with that. Selling a CD off the shelf means manufacturing lots of them, printing booklets, shrink-wrapping, distributing to stores, suffering inevitable waste and theft, not always having the supply in the right place for the demand, etc etc.

      Digital sales are VERY efficient. Once something is recorded and set up, your only distribution cost is bandwidth. So why the heck does one CDs worth of material cost the same as one physical CD?

      For that matter, since a lot of the record company's
  • "You have this device consumers love, but they're being restricted from buying anything other than downloads from Apple. People are bored with that."

    That's simply not true. You can put music from other services on an iPod.
    • Some, but not all (Score:3, Insightful)

      by jfengel (409917)
      Some other services, but not all other services. In particular, you can't put on WMA-protected music, which is the next most popular format for legal music downloads after iTMS's own FairPlay/AAC format. (The article is something of a shill for Napster, which uses WMA).

      You can get lots and lots of music from other services in other formats supported by the iPod, especially MP3s, but usually those are from less-well-known bands or from services of dubious legality, like allofmp3.com.
  • They're GIFTS! (Score:5, Insightful)

    by cloudscout (104011) on Tuesday December 13, 2005 @05:29PM (#14250530) Homepage
    Yes, iPod sales are up, but those sales aren't going to transalte to iTMS purchases until AFTER the iPods have been opened. The story says that gift card sales are "off the charts". You can expect downloads to jump dramatically beginning December 24th.
  • by supabeast! (84658) on Tuesday December 13, 2005 @05:29PM (#14250531)
    "We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players."

    Hmmm... sales suck on CD, sales suck online... maybe it's time for the record industry to reconsider its current business model of pushing albums where the musicians lose almost all control to producers who churn out an album with three good songs and ten filler tracks.
  • by Quaoar (614366)
    The day the music industry stops selling us DRM crippled, low-quality merchandise over the internet is the day I stop loading my iPod the conventional way.
  • You want to see phenomenal growth? How about making phenominal music, not phenominal marketing campaigns. Otherwise, the only music you're going to sell is people buying their favorites in the new format, like they did from vinyl -> tapes, tapes -> CDs, CDs -> mp3s.

    Find some really talented artists, not hyper-hyped hot chicks, make it available only digitally and watch the dollars roll in.
  • People like the RIAA are going to fight the internet as a distribution method to the hilt, and many other people will join them, because as it becomes more popular they will start losing their market. If I can buy a whole CD online and be listening to it in seconds, instead of going out and picking it up, I know which one I'd rather be doing, and it's the one that most people would.

    Of course, the RIAA and other companies hate this because it means they can't control distrubution and it gives all artists
  • The history of the CD, when the music industry was dragged, kicking and screaming, into that distribution medium, new releases came out on CD, old releases were on vinyl. Two years later, vinyl couldn;t be had, and the Beatles White Album was top of the (CD) charts, and R.E.M. or somebody was number two. Why do we feel that Internet distribution of music should be any different? I can get out my credit card, buy and download software today, or I can wait two weeks and get a printed CD with the software.
  • Not Apple's Fault! (Score:5, Insightful)

    by gasmonso (929871) on Tuesday December 13, 2005 @05:31PM (#14250555) Homepage

    Jobs wants to lower the cost of songs, but the RIAA has insisted that they raise the cost of new songs in order to lower the cost of other ones. Many people are not willing to pay $.99/song muchless $1.xx for one. And the complaint from Napster in that article is pathetic... they are just upset that Apple dominates the marketplace. You want more sales... then lower the price!

    http://religiousfreaks.com/ [religiousfreaks.com]
  • by mobiux (118006) on Tuesday December 13, 2005 @05:31PM (#14250557)
    Is 0.44% a statistically significant number?

    I.E. So of an average of 1,000,000 downloads, that means last month there were only 995600?

    Seems like someone is reading alot into it.
  • Yes (Score:2, Insightful)

    I believe in the laisez-faire free market with exception to monopolies. In Apple's case, they have created one and good for them, but being at the top with tech stuff especially self-fulfills itself and the greater your marketshare, the more helium you have underneath to lift you further. Because that is due to the nature of consumers in whose minds a brand's importance is overstated instead of exclusively creating superior technology (which may be true but I said exclusive), it is ultra hard for other comp
  • Lies! (Score:5, Insightful)

    by Darius Jedburgh (920018) on Tuesday December 13, 2005 @05:31PM (#14250559)
    Napster CEO: "but they're being restricted from buying anything other than downloads from Apple"
    Funny that seeing as (1) a large proportion of commercially available music can be downloaded from Apple and (2) iPods will play mp3 format files from any vendor or ripped from CDs. This guy is simply lying. It's interesting that someone can get away with such a bald-faced lie.
  • blame apple (Score:3, Insightful)

    by Paladin144 (676391) on Tuesday December 13, 2005 @05:31PM (#14250567) Homepage
    Yes, of course the music industry would love to blame Apple for anything that's been going wrong in their business. I'm sure it couldn't have anything to do with the big labels' dwindling music-producing skills. And lord knows it couldn't be that cool new bands are refusing to sign with major labels, and are deciding to go it alone against the RIAA, thus depriving the RIAA of the right to control their music and their future.
    </sarcasm>
  • It's more like (Score:3, Interesting)

    by Solr_Flare (844465) on Tuesday December 13, 2005 @05:33PM (#14250589)
    The music industry's latest antics combined with their rediculously high pricing schemes(and wanting to raise them even more) that is hurting them, not Apple. If anything, Apple has helped by keeping the music industry *in check*. If they hadn't then we'd all be paying $3 to $5 a song by now and legal filesharing would be totally dead.

    This piece comes off more as a paid attempt by the music industry to weaken Apple's position and power. Anyone who has been following the news knows that there is a bit of a mini-power struggle going on between Apple, who wants to keep things affordable, and the music industry. While I certainly think Apple could do better than they have been, at least they are thinking ahead and pushing in the direction music and consumer tastes are moving towards instead of clinging to the past model like the RIAA has, which has done nothing but hurt them the last 10 years.
  • by QuantumRiff (120817) on Tuesday December 13, 2005 @05:33PM (#14250593)
    Is to let the RIAA have their way with tiered pricing.. Obviously, if new songs aren't being bought at $.99, they will be purchased in droves at $2.99 for that hit new single...
  • by Ara (15000) on Tuesday December 13, 2005 @05:34PM (#14250595) Homepage
    Or, heaven forbid, there might be some people buying multiple iPods...

    For example, over the course of the product, I've owned 4 different iPods. Apparently this means that my online music buying should have quadrupled, which it did not.

    Thus, the link between iPod sales and buying music online is not directly proportional.
  • Confused? (Score:3, Insightful)

    by chill (34294) on Tuesday December 13, 2005 @05:34PM (#14250606) Journal
    I thought the iPod would play unrestricted MP3s? What is stopping anyone from buying an MP3 from Rhapsody, MP3.com, AllofMP3.com or anywhere else from putting them on their iPod? How is this holding back the *music* industry?

    I can see how it is holding back the portable music player industry, since they can't access iTunes, but they are direct competitors to Apple in the hardware arena. Apple made it easier to get to their service with their software, but that is the name of the game.

    [For the unenlightened, the rules DO change if you are a convicted monopolist [microsoft.com].]

      -Charles
  • by shr3k (451065) on Tuesday December 13, 2005 @05:34PM (#14250609) Homepage
    In other news, the RIAA and major music industry conglomerates have announced new terms for customers purchasing and listening to their members' music.

    "All people do with their CDs and iPods is listen to them. People think that they don't have to pay anything else beyond the initial purchase price. But what they don't understand is that they need to pay royalties every time they listen to them," said RIAA spokesman, Bob Degalhart. "Every song you play on your stereo or iPod should require some form of small micropayment to us for the right to even play that music. Everyone should realize that purchasing the music is only the first of many steps."

    The RIAA and the industry plans to push legislation to require all stereo equipment, MP3 players, and hearing aids be fitted with special software that is capable of completing micropayment transaction per listen. Industry member Sony says that it has special software available for installation on home PCs for this purpose and plans to deploy it in the near future.
  • It seems to me.... (Score:5, Insightful)

    by Big Boss (7354) on Tuesday December 13, 2005 @05:34PM (#14250611)
    That there is one very compelling reason NOT to buy legal downloads. DRM. No, not for the tinfoil hat reasons, but for one very simple one: interoperability. I can't take my DRMed iTunes AAC file and play it with my MP3-CD car radio. I can't play it via HMO on my TiVo. I can't play it in any other portable device. While I do own an iPod, I also own other devices that I listen to music on. Those can't play AAC, let alone DRM AAC. And I'm not even going to get into WMA-DRM.

    Burning it to CDA and re-ripping it doesn't count. It's annoying and drops all the metadata, in addition to the transcoding quality loss. If they want to sell me music, it MUST be in a non-DRM format that I can use on ALL of my devices, MP3 for example. If they refuse, I'll take my money/time elsewhere. Indy, filesharing, certain russian sites, etc.. And I'm sure I'm not the only one. I'd be happy to pay $1/song, for high-quality (LAME-Standard minimum) MP3 or FLAC audio files. Hell, let me pick the format and bitrate and charge me a little more for the bandwidth for the higher filesizes. Oh, wait, someone else allready does that.....
  • by Thumpnugget (142707) on Tuesday December 13, 2005 @05:35PM (#14250627)
    Everything on my iPod is either 224 or 192kbps VBR mp3s ripped with LAME. I can even tell the difference between that and source and am considering reripping all my CDs to a lossless format, which I am NOT looking forward to, as I have over 1000 CDs.

    The 128kbps AAC files from the ITMS don't do it for me. They sound highly compressed and you can occasionally here aural artifacts in the high-end, like flanging in the cymbal washes. It's a lot worse with 128kbps mp3s, for sure, but the quality just isn't high enough for me to even spend a dollar there.
  • by Irvu (248207) on Tuesday December 13, 2005 @05:37PM (#14250645)
    The author is saying a) We predicted that we should be making X sales this week, and b) we are not. Therefore Apple is to blame, as are the people who keep choosing to not buy the overpriced "music".

    Can you spot the logical flaw?

    Last week I predicted the following:
    a) I would immediately win a hundred bojillion dollars in the lottery.
    b) The most beautiful women in the world would gather around me to sing my praises.

    None of that has happened so far, and seeing as how b is dependent upon a (lets not kid ourselves, I'd have to buy plane tickets for all of them to fly here), we should focus on a. A requires me doing things like buying lottery tickets, and the lottery having that kind of money, neither of which is the case. Therefore there is only one inescapable explanation: It's all the lottery people's fault. They're 'holding me back'. They should have set the pot that high, given me a free ticket, and then changed the rules so that only I would win.

    I love this game!
  • by ndansmith (582590) on Tuesday December 13, 2005 @05:37PM (#14250646)
    A competitor (I think it was Napster) put it well when they pointed out that using iTunes it would cost $10,000 to fill up a 10,000 song iPod. No one has ever expected the consumers to buy their music exclusively online. Apple debuted the iPod two years before the music store was online. They assumed that consumers would fill up their iPods with music extracted from their own CD collection and downloaded from P2P networks. Notice that there was not a significant price restructuring in the iPod line when the music store went live. In other words, the iPod is not a razor and the songs are not blades in Apple's business model, so dropping %.44 will probably not even make them balk.
  • 0.44%!? (Score:4, Insightful)

    by Turn-X Alphonse (789240) on Tuesday December 13, 2005 @05:40PM (#14250672) Journal
    0.44%!? That's less than 1%, hot damn the world's rebeling against music! That's like.. DOOMED!

    Totally ignore the fact that Christmas is comming up and people stop spending money on what they want and start saving for others, very often presents arn't music so the money goes else where.
  • Sorry RIAA... (Score:5, Insightful)

    by Craig Maloney (1104) * on Tuesday December 13, 2005 @05:41PM (#14250707) Homepage
    I'm sorry, but I've stopped purchasing RIAA encumbered music. There's plenty out there, and I don't need to support greedy corporations who don't understand their customer wants or needs. It only took a few years, but I finally caught that the RIAA is not interested in making sure that I remain a customer, and I've complied by taking my business elsewhere. Magnatune, Positron Records, Metropolis Records... they all get it. Soon other companies will understand that the problem isn't their customers (who want to support them), but the marginalized trade group cartels that are holding them back. Until this happens, my cash goes elsewhere.

    Sorry, RIAA... you had your chance.
  • and (Score:5, Insightful)

    by beforewisdom (729725) on Tuesday December 13, 2005 @05:41PM (#14250708)
    I'm sure draconian cd prices and lousy pop music have nothing to do with a decrease in sales.
  • Not in my household (Score:5, Interesting)

    by dada21 (163177) * <adam.dada@gmail.com> on Tuesday December 13, 2005 @05:42PM (#14250720) Homepage Journal
    My lady and I have a tendency to purchase a LOT of music -- we've filled a few 400 disc changers in the past before going with a wholehouse MP3 distribution system.

    Our reasons for buying less music is:

    1. Dislike of Sony and the RIAA -- where we used to buy 3-4 CDs a week at Borders, we're lucky to buy even 1 a month because of their strongarm tactics. Until Borders starts carrying the popular indie bands in their area, we won't buy CDs. Some indie bands in our area have sold 2000+ CDs privately without record store support. If they expect to be part of my community, they better do more research.

    2. Bigger support of the ma-and-pa brick and mortars. As our retail stores that we own lose business to the dotcoms and the super stores, we've found that by supporting other locally owned shops, we see more locally employed customers at our stores. It is the ultimate "outsourcing" to see your community spending money outside of the community to save on sales tax and maybe a 5% difference in price beyond that. 14% is still a huge savings, all from government coercion.

    3. Income. Our income this year is about double the last 3, but our income in the last 6 months is down over 70%. I've been putting more of my income into real savings (gold, silver, property) to weather to storm ahead. I've also expanded my market from just-the-Midwest to the entire world, and I expect it will take a year or two to get back to my first half of 2005 income levels.

    4. Quality. The quality of the mass produced records is terrible. I can't listen to the top 40 record stations at all -- every vocalist is enhanced, delay and reverb is worse than the 80s, and the compression destroys any fidelity that might have made it through the overproduction period. Garbage in, garbage out, garbage unbought.

    5. Promotion. I don't feel any desire to pay $50 to see a concert of 3 bands I barely know. The indie scene is usually $6 to $12, I see 2 amazing bands and 3 new bands cutting their teeth. $2 beer, $4 calls instead of the big shows where we paid $14 for a drink recently ($110 per ticket). Without cheap promotion the records won't sell.

    6. Collusion. Try to get tickets today to any popular show. The rules governing ticket scalping are created specifically to take care of the few scalpers who are licensed by the local government. It has made shows nearly impossible to attend to. One popular show we were willing to pay $60 per ticket for was sold almost entirely to 3 ticket scalpers.

    7. No desire. There are so many new ways to be entertained (due to the web) that music-on-CD just won't cut it anymore. I've been talking to a local show producer who is finding better ways to stream live shows to the web in a high quality, high fidelity, well produced show. I can't wait for his work to come to fruition.
  • by HangingChad (677530) on Tuesday December 13, 2005 @05:46PM (#14250771) Homepage
    But I'd still rather have a CD than download directly from iTunes. Then I can move my material from device to device as the media changes.

    It's mp3 this year but who knows what audio format is coming around next year? Are you going to be able to play your iTunes downloads 10 years from now?

    I'm glad Apple is doing well with iTunes, but it's just not for me. I want a disk. I want a disk I can rip to the PC and portable device of my choosing whether it's on Windows, OSX or Linux. And I especially want to be able to find something that can still play that CD 10 years from now.

  • right (Score:3, Insightful)

    by mr_tommy (619972) * <tgraham@NOSPAm.gmail.com> on Tuesday December 13, 2005 @05:47PM (#14250779) Journal
    Forgive me - the main quote for the start of this story comes from Apple's direct competitor, Napster, and is followed up by more in-partiality by one from Real!? It doesn't take long to decide exactly how much credibility to give this piece...
  • Margin of Error? (Score:4, Insightful)

    by Elfboy (144703) on Tuesday December 13, 2005 @05:48PM (#14250784)
    .44%. Half of 1 percent. And what is their margin of error? Somehow I doubt Nielsen SoundScan has THAT high a precision.
  • by Peter Trepan (572016) on Tuesday December 13, 2005 @06:07PM (#14251022)
    Yeah, that's what I thought.

    I know dozens of talented musicians in active local bands, but I don't know anyone - not even a friend of a friend - who makes a living from their band.

    The solution? Let go of those cherished dreams about getting "discovered" and give your music to the world for free. If you don't like the record industry, that's the best way to screw them. Do it for the recognition. Do it for the chicks. Do it because you enjoy it. But if you're doing it for the money, you'd be better off buying lottery tickets.
  • by aiken_d (127097) <brooks.tangentry@com> on Tuesday December 13, 2005 @06:29PM (#14251242) Homepage
    Consumers are clearly demonstrating that the $0.99/song model doesn't work. Educated by **AA's anti-piracy campaigns, consumers realize that Apple's business model is unfair to the artists who create the songs they listen to. This is clearly a groundswell of public opinion whereby customers are telling Apple "If you continue to release Ms. Spears' latest single for $0.99, you are robbing her of her compensation as an artist, and we won't stand for it anymore."

    I don't think Apple has any choice: in the face of this consumer backlash against affordable music, they'll have talk the labels into allowing them to raise prices on the most artistic material (that which is in the highest demand, that is). If they charge, say, $2.99 for the latest Britney Spears single, consumers will once again be able to purchase from iTunes with a clear conscience, and not worry that they're contributing to a young artist being taken advantage of by a huge corporation.

    Cheers
    -b
  • Dear Chris (Score:5, Insightful)

    by Tsiangkun (746511) on Tuesday December 13, 2005 @06:37PM (#14251306) Homepage
    Chris Gorog, CEO of Napster Inc. (NAPS ), which sells both subscriptions and downloads. "You have this device consumers love, but they're being restricted from buying anything other than downloads from Apple. People are bored with that."

    Chris,

    I know this is hard to wrap your head around. The iPod is a media player with a built in hard drive. There is no vendor lock in. I've been able to downlaod music from napster, kazaa, soundclick, and a variety of vendors. Amazingly, they all work fine. AIFF, WAV, MP3, ACC, all work fine on my iPod. Should your's behave differently, RTFM.

    What the iPod doesn't do, is support every god damned DRM scheme on the planet that lets you and your corporate cronies "lease" your DRM infected music to iPod owners. Quite frankly I'm not interested in DRM laden crap from napster, real, or anyone else including iTMS. I bought my iPod to carry around the large collection of music I already have, not to populate it with new music that has been approved by some industry suit.

    So, in conclusion, the iPod is a hard drive. I can get files of any type onto it with ease. The iPod is a media player. I can play a fair variety of widely available media types without problems. The problem is in the DRM schemes that lock content to specific devices.

    The iPod did not lock me into anything, your DRM infected business plan locked me out of your customer base. I am not interested, and it has nothing to do with my iPod.

    I have not, nor will I ever "lease" digital music for my device. If I am paying with real cash, I want real bits I can twiddle as I see fit.
  • Sorry Charlie! (Score:5, Interesting)

    by Morgalyn (605015) <slashmorg@gmail.com> on Tuesday December 13, 2005 @06:45PM (#14251378) Journal
    As has been true since the start, iPod owners mostly fill up their players from their own CD collections

    I'm not sure why they are surprised with this? Did they honestly think people would only put newly-purchased music on their iPods (apparently so)? Why wouldn't I want to put all the music I already listen to on it? When the iPods first came out, it seemed like the biggest buyers were people with too much money on their hands that bought every CD that ever appealed to them, and were tired of shopping for n-disc changers for their cars and jukebox systems for their homes. The whole POINT is that they can hold albums and albums and albums of music without carrying around all the accompanying cruft (CD organizers, anyone?). iTMS was just icing on the cake, a way to explore new music and purchase a track or two without buying the whole album. If I had to make a guess, I'd say iTMS completely revitalized the 'singles' market.

    We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players

    "the ... growth ... we should"... hmmm.. I think its time to hire new analysts, right? Just because someone came up with some numbers doesn't mean its a bonafide, set in stone, destined fact. If this commentary is referring just to the current quarter, then they should REALLY give themselves a kick in the pants - sure iPods and other MP3 players are flying off the shelves: people are buying them for christmas gifts. They aren't even being used yet! They're probably wrapped up and under a tree, or being shipped, etc.

    PAH. I give up. Someone needs to get the music industry to grow up and stop whining that someone played with their toy: it's time for them to eat their vegetables and wear regular underwear instead of diapers. This should be accompanied by a talk about how life doesn't play by the rules you make up for yourself. Sheesh.
  • 0.44% (Score:3, Interesting)

    by LoudMusic (199347) on Tuesday December 13, 2005 @06:58PM (#14251500)
    0.44%. But for an android, that's like an eternity

    Seriously, 0.44%? Is that honestly an issue?
  • by DrSbaitso (93553) on Tuesday December 13, 2005 @07:51PM (#14251962)
    "RIAA sucks! Apple rules! iPods rule!" et cetera. It's getting old.

    To fill a 60 gig iPod with songs from itunes costs roughly $15 grand. And yet they still sell very well... hmmm. I suppose a lot of folks with 1250 disc CD collections (the stack of CD cases would only be about 30 feet high) will come out of the woodwork to talk about how much they love having each bootleg Phish show they own on their iPod, but the fact is that most people who have 60 gigs of music stole a lot of it. (Other anticipated responses: I use my ipod to store 8 million digital pictures of my girlfriend; I keep 60 gigs of [not copywritten] porn on it; I back up every Linux distribution ever created; etc. You're a hero, and this post isn't about you, so go have a Jolt to reward yourself!)

    If quarter-over-quarter iPod sales are way up (discounted for seasonality - lots of those iPods will be Xmas gifts, after all) but quarter-over-quarter music sales aren't, record executives are right to be skeptical about iPods driving their sales. They've pretty much figured out that Apple screwed them over - the iTMS is basically an advertisement for iPods. The fact that it generates some revenue is an ancillary benefit, nothing more.

    Now, I'm all for music labels as they are generally constituted now shrivelling up and dying. I couldn't care less. But for the longest time, people b**ched and moaned about how they wouldn't steal if there was a better alternative; if only some genius company would sell tracks for $1 each, so you wouldn't have to buy the whole crummy album for the 3 songs you wanted! I think I read that same post about 6 million times in 1999. Now that it's here, people are discovering that actually, free is still a lot better than $1, and so file-sharing and allofmp3 downloads keep setting all-time records.

    This is bad, because the mean record industry is going to call up their cronies in congress and pass more stupid laws that will piss off everyone here. They are going to do something, because the availability of cheap, legal music isn't enough to stop the flood of illegal music being shared. So stop whining and go buy some indie records off itunes :)

I'd rather just believe that it's done by little elves running around.

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