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Record Labels Push for iTunes Price Hike 971

csteinle writes "Looks like the major labels are getting their own way again. The New York Post reports that the price per track may be going up to $1.25, while the per album price for some albums could go as high as $16.99. The Register has its own take on this, too. Aren't you glad you starting paying for downloaded music?" Update: 05/07 19:15 GMT by M : Apple says their prices won't increase.
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Record Labels Push for iTunes Price Hike

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  • (Score:5, Informative)

    by datan ( 659165 ) on Friday May 07, 2004 @12:38PM (#9085669) Homepage
    This was featured on slashdot a few weeks ago.

    It's a pretty cheap service, but some doubts were brought up whether Americans could legally use the service.

    It charges 1 cent per MB of downloading, and it works out to about 5-8 cents per song. You can choose your encoding (mp3, ogg etc.) and bitrate. []

  • Steve's take (Score:5, Informative)

    by Raindance ( 680694 ) * <johnsonmx&gmail,com> on Friday May 07, 2004 @12:40PM (#9085688) Homepage Journal
    I'd recommend reading the Register's take on the story rather than the Post's: it has more facts right and doesn't have a flashing Howard Stern advert. Anyway, Steve Jobs also mentioned the issue in a recent iTunes conference call- here's what he said (credit goes to

    "But in any event, most of the albums on iTunes are priced at $9.99 and below and, no, they're not creeping up. There's always a few that are a little higher than you can go in and pull out, but they're very, very competitive and we see in the future the prices of the albums coming down, not going up, because that's what it's going to take to sell more albums and it's in everybody's best interest to do so."

    So, it's definitely a label vs apple thing. Anyone know who would get the extra money from the price hike, and in what proportions?

    p.s. The journalism in the Washington Post is just "great". I quote,
    "Apple's willingness to allow some singles to be priced higher than 99 cents indicates the company feels empowered by its current success in the download market and sees a chance to boost profits from the sales of digital music."

    Where'd they get this information, you may ask? Did they perhaps pull it out of thin air? Immediately preceeding this, "Spokespersons for the major record companies declined to comment. A spokesperson for iTunes was not available for comment."

  • (Score:1, Informative)

    by Anonymous Coward on Friday May 07, 2004 @12:40PM (#9085704)
    Try this []
  • by christurkel ( 520220 ) on Friday May 07, 2004 @12:43PM (#9085732) Homepage Journal
    The download biz is finally taking off after eyars of trying and you want to raise prices? This strikes me as profoundly stupid but then again the RIAA isn't exactly a brain trust.
  • by linuxbaby ( 124641 ) * on Friday May 07, 2004 @12:43PM (#9085738)
    Worry not. There are many many MANY more to come that are being very competitive AND open. CD Baby is delivering over 250,000 songs to EACH of the companies below, and the norm for the smaller companies is to receive MP3 or even FLAC delivery.

    So instead of whining about how some big major-label Universal album (where the artist hardly gets paid anyway) is DRM'd or expensive, be an independent thinker and go try some of the smaller services.

    Emusic []
    Website for Mac, Windows, Linux where members can download up to 40 tracks per month of high-quality MP3 files. Has been around for YEARS doing both 99-cent downloads, and all-you-can-eat downloads for paid members. Has great catalog of indie label music - company is currently reforming.
    AudioLunchbox []
    One of the first all-independent music download sites. Tracks retail for 99 and albums retail for $9.99. ALB pays out 59 per song and $5.90 per album.
    NetMusic []
    Digital download and streaming service. We get 65 cents per downloaded song. Entire-album downloads usually retail at $9.99. []
    Website that primarily targets Latin America, USA and Spain. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.
    Etherstream []
    Website that offers a la carte downloads. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.
    Music4Cents []
    Retails independent music at very reasonable prices. Pays 55 cents per download. Sells independent music - they will sell CD Baby songs at $.69.
    QTRnote []
    Artist gets about $.64.
    TriaSite []
    TriaSite retails independent music downloads. Pays $.65 per download
    Puretracks []
    Canada-only service that offers $.99 downloads. Website is currently available to Candian residents only. Puretracks is acting both as an online download retailer and a back-end service provider for other retailers. Downloads cost $.99 per track - artist gets about $.59 per track.
    CatchMusic []
    Download site focusing on independent music. CatchMusic sells a la carte downloads at $1 each. Songs retail at $1 - artist gets about $.55 per song.
    Viztas Digital Marketplace []
    Viztas Digital Marketplace will sell all kinds of digital media - not just music. Tracks retail for 99 and albums retail for $9.99. Vistaz pays out 60 per song and $6.10 per album. Viztas has not yet launched.
    DiscLogic []
    A la carte downloads. Tracks sell for 99 cents. We get 65 cents. Entire-album downloads are usually $9.99.

  • Re:Caveat emptor! (Score:5, Informative)

    by Raindance ( 680694 ) * <johnsonmx&gmail,com> on Friday May 07, 2004 @12:45PM (#9085759) Homepage Journal
    "Retroactive price hikes... now possible under the DMCA!"

    The DMCA may be a terrible, terrible thing, but it doesn't legalize *everything* a geek hates. Anything resembling a retroactive price hike would bring lawsuits and are not obviously legal under the DMCA.

    Yes, it's horrendous, but no, it doesn't make things normally illegal, legal. It 'just' makes certain normally legal things illegal.

  • Re:Sigh (Score:5, Informative)

    by gclef ( 96311 ) on Friday May 07, 2004 @12:49PM (#9085828)
    You mean, like these [] guys?
  • by Anonymous Coward on Friday May 07, 2004 @12:49PM (#9085839)
    I though 99 cents was fair before. But $1.25? I know it's only a quarter, but fuck that.

    At $1.25 per song, I can waste my time trying to find it for free somewhere else on the net. Check out Broadjam []. They have all sorts of music from independent artists for free, and the stuff on their charts is damn good.

    Fuck you RIAA. All you've done by raising prices is increased the rate of piracy. I hope it puts the labels out of business.
  • iTunes feedback link (Score:5, Informative)

    by Monoman ( 8745 ) on Friday May 07, 2004 @12:51PM (#9085870) Homepage
    Tell them how you feel.
  • Re:Extra money? (Score:5, Informative)

    by Bobdoer ( 727516 ) on Friday May 07, 2004 @12:56PM (#9085945) Homepage Journal
    Just to provide some solid numbers:

    "Major label artists will end up with only 8 to 14 cents per song."

    For more data on how the money from ITunes is distributes, see this page from [].
  • by gosand ( 234100 ) on Friday May 07, 2004 @12:56PM (#9085952)
    Magnatune []

    I have found Magnatune to be very good. Not a massive selection, but at least they are all of good quality. No "dork-in-the-basement-with-a-keyboard" like some other free music sites have. Some of these are really good. "Brad Sucks" is interesting, "Rocket City Riot" and "The Napolean Blown Aparts" are good ol' rock-n-roll. I am sure there is more there, I just haven't gotten through it all yet.

    Check it out.

  • by jacoplane ( 78110 ) on Friday May 07, 2004 @12:58PM (#9085982) Homepage Journal
    You missed , the [] Russian Music site that is offering legal digital music by the MB []. If you don't trust russian companies with your credit card details, you can pay through paypal.
  • by gorbachev ( 512743 ) on Friday May 07, 2004 @12:59PM (#9086000) Homepage
    Sony's (one of the Big 5 record labels) Sony Connect music download service launched 5/5/2004. The price point is $.99 for singles and $9.99 for albums.

    The same week we get reports that the Big 5 has successfully managed to pressure Apple to raise their prices.

    Coincidence? I don't think so.

    Proletariat of the world, unite to kill RIAA
  • by Hackie_Chan ( 678203 ) on Friday May 07, 2004 @01:06PM (#9086108)
    Last time I checked (one minute ago) N.E.R.D's Fly or Die album was on sale for $13.99. That's 14 bucks for twelve songs, two whom you can only get by purchasing the entire album. Washington Post are, as Al Franken would say, "LIIIAAAAAARS!"
  • by Caesar ( 9965 ) * on Friday May 07, 2004 @01:07PM (#9086130) Homepage
    From our coverage at Ars [], it's not entirely clear that these reports are true. Just a week ago Jobs said that all of these rumors were false.
  • (Score:5, Informative)

    by cpt kangarooski ( 3773 ) on Friday May 07, 2004 @01:12PM (#9086208) Homepage
    Because it isn't importation. When you import something, you remove it from its source and bring the very object to the destination.

    When you download something, you make a local duplicate based upon the original on a server.

    For example, let's say that Alice is in Russia, and has a copy of War and Peace. She collect calls Bob, who is in the US. If Alice reads the book aloud over the phone, and Bob faithfully writes it all down at his end, it is plainly obvious that the book Alice is holding in her hands has NOT been physically moved anywhere. A copy has been made. Even if Alice destroys her book, even if she destroyed every word after saying it to Bob, Bob's copy is still being created in the US, and is still utterly distinct from Alice's copy. It's a new copy.

    While I don't really agree with the MAI v. Peak, or Utah Lighthouse v. Intellectual Reserve cases, they VERY much stand for the proposition that computers reproduce things all the time. And in this instance, so does common sense.

    And reproduction of copyrighted works is one of the exclusive rights of the copyright holder per 17 USC 106. Distribution is another, also per 106. While there is an exception for SOME importation under 109 and 602, it's considered to be connected to the distribution right, and that involves the distribution of existing copies, not the reproduction of more copies.
  • by lpangelrob2 ( 721920 ) on Friday May 07, 2004 @01:16PM (#9086265) Journal
    Under the terms of some of the deals, the prices for some of the most popular singles could rise to $1.25, according to sources familiar with the negotiations.

    Just supply and demand, folks. I don't think many people here would be interested in what goes for $1.25, anyway.

    If prices across the board get raised to $1.25, on the other hand, you've got reason to cry "bait and switch." But that's not what this article is saying.

  • by kimgh ( 600604 ) on Friday May 07, 2004 @01:16PM (#9086275)
    Hold off on the suicidal tendencies, here. Jobs was adamant in the conference call last week that the price would remain at 99 cents, regardless of the rumors that were floating around.

    I think Apple is in the driver's seat on this, so I bet the price will not be going up...

  • by GPLDAN ( 732269 ) on Friday May 07, 2004 @01:21PM (#9086343)
    Anybody know of a band that broke-out with real sales & popularity on the net or via mp3 alone?

    A band named Fugazi basically flipped off the whole industry and went completely indy. They didn't get rich, but they are beloved my many GenX like myself.

    I know the old didn't go anywhere trying to push artists that weren't on a label, but I never thought that model worked very well. The model that was interesting was the band website, with all the songs online and you could donate. Shareware mp3s.

    If radio Paradise can pull in about $110k/yr in domations (he'll need more this year) - I wonder if some bands could make it this way.

    I download stuff from Finnish techno, stufffrom Japanese speed metal bands, the market for free music that is global, authored and distributed by the bands themselves exist - but it hasn't been a revolution like I thought it would be 5 years ago. There are still corporate conglomerates like the production company that does the American and World Idol gig. They invade the pre-teen mind with that shit, and pre-empt any attempt to look into the independant music scene.
  • Your local library (Score:5, Informative)

    by Danathar ( 267989 ) on Friday May 07, 2004 @01:21PM (#9086353) Journal

    a: Check the local library for your CD. If it's not there...go to step B.

    b: Buy used CD's

    c: When you are done "listening" to your used CD(s), donate them to their local library.

    Pretty soon the Library will have a decent collection for everybody!

  • by FreeUser ( 11483 ) on Friday May 07, 2004 @01:23PM (#9086388)
    It's a pretty cheap service, but some doubts were brought up whether Americans could legally use the service.

    Those doubts are quickly allayed here []. is perfectly legal under US law. The RIAA doesn't like it, and will tell you otherwise, but they are being no more honest than the MPAA is when it flashes those FBI warnings at the beginning of each DVD telling you you have no right to make a backup copy for personal use ... knowing full well that the law and the courts consistently say otherwise.

    The short explaination for those too lazy to follow the above link.

    1) Under US law, anyone may import any music so long as they are licensed to do so under the copyright laws of their own country. If you buy a mailorder CD from Canada and the company is licensed by either the artist or the CIAA member company, it is legal to import the CD. If you buy a mailorder CD from the US and the US seller is licensed by the artist (or the RIAA member company), it is legal. Under Russian copyright law, which the US is bound by treaty to respect, has a license to distribute all copyrighted music from the Russian equivelent of the RIAA, known as ROMS.

    The RIAA may hate the fact that you can buy $0.99 iTunes songs in whatever unencumbered format you like for around $0.04 per song, but the law throughout the developed world, including the USA, is quite clear that this is a perfectly legal service to use, yes, even in Once But No Longer Free America.
  • by Speare ( 84249 ) on Friday May 07, 2004 @01:25PM (#9086412) Homepage Journal
    Um, have you never seen financials or spreadsheets, where negative financial terms are shown in parentheses?
  • by FreeUser ( 11483 ) on Friday May 07, 2004 @01:30PM (#9086487)
    AllOfMP3 and other grey market Russian MP3 sites do not pay them anything at all. Maybe, just maybe they got a few pennies from the sale of the CDs that these companies bought to master their catalogs, but I really doubt that as well.

    Not true. pays royalties to ROMS. ROMS keeps a small fee to cover costs, and pays the rest as royalties to the artists. As to whether the artists get more royalties from a $0.04 cent ogg or mp3 file, or an iTunes $0.99 (soon to be $1.25?) song is an interesting question. I would suspect it is quite likely the do not. Either way, the artist does get royalties, the service is legal, and the recording industry of America that has been systematically screwing artists and citizens alike for the last century is left completely out of the (profit) loop.

    Which IMHO is an excellent thing.
  • by F34nor ( 321515 ) * on Friday May 07, 2004 @01:41PM (#9086641)
    Michelle Jackson owns the Beatles rights not apple music.

    P.S. He is hurting for money right now.
  • (Score:4, Informative)

    by vcjim ( 602423 ) on Friday May 07, 2004 @01:42PM (#9086650)
    Yes, CDBaby is an a great company. My group, Dancing Baptists, is with them and they've distributed us to Itunes, Napster, Tower Records, and many others. We get a full half of our sales. For every 99 cent song we sell on Itunes, we get about 50 cents. Moreover, we sell 7.99 CDs on CD Baby's store, and we get $4.99 each. A wonderful service. is also a great neo-MP3 like site, probably the most active, and does not steal the rights to our music.
  • Don't trust the Post (Score:3, Informative)

    by CaseCom ( 777518 ) on Friday May 07, 2004 @01:43PM (#9086667)
    This is the New York Post, folks, the same paper (and same reporter) who a couple of months ago claimed that Microsoft was trying to buy AOL from Time Warner -- a story that went nowhere and was picked up by no other major news organization.

    I'll believe this when I see it.
  • Typically, artists get $1/CD, or about 1/16th of the selling price (after the labels recoup all sorts of insane costs). Assuming the same distribution of money, the artists *should* be getting somewhere between 99/16 and 70/16 or between 6 and 4 cents per song (depending on their contract).

    Actually, IIRC, it should be higher. Artists contract for a royalty on the price _as sold by the company_.

    So, if a CD has a 50% markup and the artist gets a dollar from a $16 CD, they're getting a 12.5% royalty. Which, when applied to the $.70 label cut, means that they get 8 3/4 cents per song sold.

    All in all, 12.5% royalty doesn't seem that bad--unless the record companies do what some claim they do, and attempt to recoup their initial expenditures from the royalty, rather than the gross profit from each individual sale.
  • by li99sh79 ( 678891 ) <(sam) (at) (> on Friday May 07, 2004 @02:00PM (#9086881) Homepage Journal
    Michael Jackson owns the Beatles rights not apple music.
    Jackson owns the publishing rights. The songwriting rights are still held by the Beatles, and by extension Apple Records. And actually Jackson himself doesn't hold the publishing rights, that's handled by a company he established with Sony. At least that's what I remember from reading snopes.
  • by cmason32 ( 636063 ) on Friday May 07, 2004 @02:16PM (#9087083)
    In some instances.

    However, the Supreme Court has made exceptions to the general price fixing rules - and has even do so specifically in the music industry. In BMI v. CBS, the Court said that a "middleman ... was an obvious necessity if the thousands of individual negotiations, a virtual impossibility, were to be avoided." 441 U.S. 1 (1979). The Court then got around the legal precedent by stating that the blanket license, the issue in this case, was a new product and greater than the sum of its parts. Even though price fixing is called a per se rule, the Court said that "[n]ot all arrangements among actual or potential competitors that have an impact on price are per se violations of the Sherman Act or even unreasonable restraints."

    Whether or not you agree with this rationale, it is what allows the RIAA to engage in these practices.

  • by Auckerman ( 223266 ) on Friday May 07, 2004 @02:19PM (#9087118)
    And our first question today will come from Steven Levy with Newsweek.
    Steven Levy: Hi, Steve.
    Steve Jobs: Hi, Steven. How are you doing?
    Steven Levy: Good. How are you? Congratulations for the year. A couple questions, related questions, about the negotiations with the labels there. One, was there any discussion from their point of view of changing the price? We've been hearing about how the labels might want to get more for online songs. And second, did they ask you to make the songs purchased on the iTunes store playable from other devices? In other words, ask you to license FairPlay to other third parties?
    Steve Jobs: Great. Let me answer those two things. First one is the price for songs in the iTunes store is remaining 99 cents per song, and we think that's what customers want and that's what we're delivering. So the prices will remain 99 cents per song and any rumors to the contrary are simply not true.
    And secondly, no, it never came up in our discussions with the labels that they would like songs purchased on the iTunes Music Store played on other portable music players other than the iPod. Possibly that's because the iPod is the most popular portable digital music player in the world with close to a 50 percent market share of all MP3 players on the market, including even $50 Flash based players. So, as you know, the iPod has grown into a billion dollar business in a little over two years and we ship more than three million iPods to date with more than 800,000 iPods sold last quarter alone. So you know, it's hard to even say who number two would be.
    Steven Levy: And the 99 cents, that didn't come up either? Basically that was something that was assumed it would not change?
    Steve Jobs: Well, I'm not going to go into details about our negotiations with music companies except to say that Apple and the music companies are offering these songs on the iTunes Music Store for 99 cents a piece, same as always.
    Steven Levy: OK. Thanks, Steve.
  • by DGregory ( 74435 ) on Friday May 07, 2004 @02:41PM (#9087395) Homepage
    I thought credit cards charged something like 3.5% plus 30c per transaction. They are probably averaging it over all the transactions that ITunes has. So someone buys only 1 song, the credit card company gets something like 33.5c but if they buy 10 songs, it's not the 33% that it is on the cost of 1 song.
  • Apple Corps (Score:3, Informative)

    by BlightThePower ( 663950 ) on Friday May 07, 2004 @02:42PM (#9087405)
    Apple Corps was started in 1968 as a spin-off company for the Beatles musical and non-musical ventures. Apple Corps is today run by Neil Aspinall and owned by Paul McCartney, Ringo Starr, Yoko Ono and (presumably) the estate of George Harrison.

    Its not really a record label, rather its the umbrella organisation for both the Beatles non-musical business interests and today it controls their image, name, trademarks etc (if not their songs, which were held by Northern Songs (L&Mc) and Harrisongs (GH)).

    I've very much McCartney and Starr would sell control of their image to Apple, nor would Yoko Ono or the estate of George Harrison be willing to part with rights to their portrayl either.

  • by xyankee ( 693587 ) on Friday May 07, 2004 @02:44PM (#9087424)
    Apple on Friday denied a report that the computer maker was planning to raise prices for songs bought on its popular iTunes online music store, according to Reuters. "'These rumors aren't true," said Apple spokeswoman Natalie Sequeira. 'We have multiyear agreements with the labels and our prices remain 99 cents a track.' Apple's statement came after the New York Post reported on Friday, citing one unnamed source, that music fans may have to start paying more for some songs on Apple's music store following contract renegotiations with the record labels ahead of the one-year anniversary of the store.

    - MacNN []
  • by smc13 ( 762065 ) on Friday May 07, 2004 @02:49PM (#9087491)
    The article was from the NY Post not the Washington Post, and the Washington Post has a left wing slant though it is a really good newspaper. Maybe you are thinking of the Washington Times?
  • RTFA (Score:3, Informative)

    by BlueTooth ( 102363 ) on Friday May 07, 2004 @02:56PM (#9087582) Homepage
    Prices are only going up on more popular tracks.
  • by Delta-9 ( 19355 ) * <(moc.liamg) (ta) (9atled)> on Friday May 07, 2004 @03:04PM (#9087693)
    Apple [] has denied that there will be any price increase, and furthermore, they are in multi-year contracts with the different record labels such that the price is locked at $0.99 for at least a couple more years.

    Good News you don't have to die.
  • by Infonaut ( 96956 ) <> on Friday May 07, 2004 @03:13PM (#9087797) Homepage Journal
    This update from Yahoo [] says it all. Apple is flatly denying that there will be any price changes.

  • by Geoff-with-a-G ( 762688 ) on Friday May 07, 2004 @03:50PM (#9088197)
    Dear Apple,

    I am writing you due to the story that I read at the New York Post that you are considering raising the price for songs and albums at the iTunes Music Store

    Dear Mr. Roy,

    I'm sorry, did you say the New York Post? Seriously? And you noticed that part "could rise to $1.25, according to sources familiar with the negotiations"

    See, here's the thing. The New York Post... not exactly the same as the New York Times, and even they are getting unreliable these days. And the part where they're extremely vague, that should have tipped you off as well.

    On the other hand, the ten times where Steve Jobs stated clearly and in public that prices would not rise, that seems at least a little bit credible.

    In conclusion, please keep buying our products, but please stop writing us letters about every crazy tabloid story you hear on slashdot.

    P.R. Flakington
    Apple Public Relations

    Note to slashdot readers: Read the article. Notice the sources. Apply skepticism before righteous indignation.

  • by MacDork ( 560499 ) on Friday May 07, 2004 @08:26PM (#9090467) Journal
    They could easily buy "The Beatles", although, they'd probably just buy the Trademark and be done with it.

    In regard to the record companies wanting a price hike, here's my theory. Raise prices, kill all the online stores and hire a few developers to replicate what has been done already. When you're a monopolist [], you think like one.

    • The record industry already has an antitrust exemption that allows record companies to jointly negotiate royalty rates for digital distribution. Late last year, the music industry convinced Sen. Orrin Hatch (R-Utah) to insert language into the EnFORCE Act (Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2003) that would extend that exemption to "physical product configurations" such as CDs. That bill is still in committee.
    That's legalized price fixing, courtesy our good buddy Orin Hatch. With Apple in the middle, they're losing their grip on distribution and they know it. That's why they are asking the industry for a "standard format" of copy restricted music. They want to know what format their portable player should support, and what brand of file to include on their double sided crypto disks.
  • by gumbi west ( 610122 ) on Saturday May 08, 2004 @02:29AM (#9091930) Journal
    Wait, wait... let me guess. you also think that you don't have to pay income taxes, right?

    Read the Register article that is linked from the musketeer article (it says that it is not legal in western countries), and yes, this is forbiden in the us 17 USC 106 [] may be an informative read for you.

Matter cannot be created or destroyed, nor can it be returned without a receipt.