Music Exec Fires Back At Apple CEO 610
geniusj writes "Warner Music Group CEO, Edgar Bronfman Jr., has fired back at Steve Jobs in response to the Apple CEO's claim that having variable pricing for iTunes music would be 'greedy.' From the article: 'To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer ... Some songs should be $0.99 and some songs should be more. I don't want to give anyone the impression that $0.99 is a thing of the past ... We are selling our songs through iPod, but we don't have a share of iPod's revenue ... We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.' Perhaps iPods combined with iPods are selling music as well, and it's not just a one-way street?"
Do they get a share of the sale of CD players? (Score:5, Interesting)
Re:Do they get a share of the sale of CD players? (Score:5, Informative)
Re:Do they get a share of the sale of CD players? (Score:5, Informative)
Don't think he speaks for the entertainment industry; he's an idiot even among those morons.
Re:Do they get a share of the sale of CD players? (Score:5, Funny)
President? (Score:5, Funny)
Re:President? (Score:3, Insightful)
Re:Uh... (Score:5, Insightful)
Someone with a wicked sense of humor. If I could moderate the moderation as funny, I would. I've got the points too.
Re:Do they get a share of the sale of CD players? (Score:5, Funny)
Unfortunately for us Canadians, his being a jackass makes him perfectly qualified for running Canada.
Re:Do they get a share of the sale of CD players? (Score:5, Interesting)
In the previous five years before I got the mac, I could count on one hand the number of CDs I bought -- four to be exact, 3 of which were European imports and one of which I bought directly from an independant artist. So yeah - this guy's an idiot -- w/o itunes they would have made a grand total of diddly squat off me. Greedy bastards. Need to toss that out too.
Re:Do they get a share of the sale of CD players? (Score:3, Funny)
"Hi. I am a record company. I believe that I will sell more products if I make them worse, and charge unreasonable prices. And of course that customers like to get sued and generally screwed."
Re:Do they get a share of the sale of CD players? (Score:5, Informative)
And now, talking about music: Sounds eerily familiar in that context.
Re:Do they get a share of the sale of CD players? (Score:5, Insightful)
The reason you don't charge a different price for a more expensive movie is that the cost per showing is exactly the same regardless of the cost to create it (e.g. cost of wear and tear on the print, cost to the theater for projector maintenance, etc). You get more money back from a $200 million movie than for a $2 million movie because the more expensive movie is better. Supposedly. Being better, more people will go see it. Supposedly.
If it isn't better, that's the fault of the producers, not the consumers. You still have a market effect, its that stupid producers who produce excessively expensive movies that aren't worth it go out of business.
Same thing for the popular hit music - you'll get more money because you sell more, not because you charge more.
Re:Do they get a share of the sale of CD players? (Score:4, Interesting)
That same logic suggests that software should be priced based on the number of CD's it comes on, rather than the amount of effort that went into it or the amount of value it brings.
Yeah, yeah, I know - software and music should be free
Re:Do they get a share of the sale of CD players? (Score:3, Insightful)
First, the marginal cost difference of 3 CDs vs 1 CD is minimal, but could justify a few dollars difference in price. Second, software is FUNCTIONAL - the pricing model on something functional is going to be different from something that is entertainment. Software also has a more limited lifetime, it becomes obsolete much more quickly than entertainment products, thus creation costs have to be recovered earlier. Even given all that, the price of software is not closely tied to the cost of creating it.
It
Re:Do they get a share of the sale of CD players? (Score:3, Insightful)
The 2nd-run theater (which have disappeared in many areas) is usually a run-down low-rent place. I also didn't reject time-based pricing, just cost-based pricing. The price going down works as long as people put a premium on seeing it now and in a good theater. It also makes sense to differentiate between time of showing - there's a fixed number of seats, so there's less demand for them at slack times of the day (even if the theater isn't sold out, there are limited seats that are "good", and there's pre
Re:Do they get a share of the sale of CD players? (Score:5, Interesting)
Re:Do they get a share of the sale of CD players? (Score:3, Insightful)
Great in theory, but sucky in reality.
They wouldn't lower prices for small movies; they'd charge more for big ones.
On the other hand, I go to a movie every year or two, so I don't really
Re:Do they get a share of the sale of CD players? (Score:5, Insightful)
Re:Do they get a share of the sale of CD players? (Score:3, Interesting)
Re:Do they get a share of the sale of CD players? (Score:5, Interesting)
I think the record companies do not understand the power relationship involved here. They ought not to go poking the eyes of their largest online retail outlet.
Re:Do they get a share of the sale of CD players? (Score:4, Insightful)
Exactly. And also, I find it interesting that the "industry representative" is stating that different songs have different intrinsic value--but never states that, for some songs, that value is less than 99c, sometimes approaching 0c, and that this music should also be charged appropriately.
Re:Do they get a share of the sale of CD players? (Score:3, Insightful)
Is iTunes their largest online retail outlet? At a guess, I would have thought it was, say, Amazon...?
Re:Do they get a share of the sale of CD players? (Score:5, Insightful)
Because it's just an excuse to raise prices across the board. Every label is going to want their songs at the highest price point. Apple realizes that the iTMS drives iPod sales, and they don't want to alienate their potential customer base by raising prices.
Re:Do they get a share of the sale of CD players? (Score:5, Insightful)
Apple is being controlling, but they have a vested interest in keeping song costs low to keep selling iPods, thus they are more aligned with my interests--low and consistent song prices--and therefore have my vote. The market is strong, but it's because of Apple and their consistent model.
Now, on hardware, the day that all parties can agree on a standard not controlled by one party--say Mr. Softy--but by a consortium similar to Mp3 or the Bluetooth SIG. Otherwise, at least AAC with Fairplay can work on both Macs and PCs. WMA should never be the defining standard.
Re:Do they get a share of the sale of CD players? (Score:4, Insightful)
The cost to actually produce a GOOD album is probably $50K. Last album I did tracks for, they were spending about $30K for 12 songs. Most of the time making an album is mixing. You can record 8 hours, and spend 4 times that amount mixing. So, if you are Maroon 5, and go record, say you plunk out $150K. Ok. And then you sell CDs at $16+ a piece. Ok. Then go look at DVD Movies. They spend MILLIONS, and they are right about the same price. And there is just as much work done there, if not more.
I am one of those who's gripe with the who CD thing is that they have been the SAME price since the 80s. It doesn't make sense.
Of course GAS prices don't make sense either. Why we out here in California get dinged with really high prices after these hurricanes? They always say that our prices are because of the lack of refineries in California, and that they cannot ship gas in from out of state. Yet now when these two hurricanes go through, our prices jump up like $.20.
Oil/Gas and RIAA are price gouging. Plain and simple.
Re:Do they get a share of the sale of CD players? (Score:3, Interesting)
they can revert to $1 / song
The odds of the music industry accepting a return to $1/song after they've rejected it, even if it worked better, are low. Why? Because they still don't really understand the benefits of the medium.
Re: (Score:3, Interesting)
Re:Do they get a share of the sale of CD players? (Score:5, Funny)
I think that alone says something.
As for the rest of the article, allow me to translate:
Waaaaaaaaaaaaaaaaaaah.
Re:Do they get a share of the sale of CD players? (Score:2, Interesting)
Re: (Score:3, Interesting)
Re:Do they get a share of the sale of CD players? (Score:3, Interesting)
That said, however, your point still stands. It's clear the labels have made a heck of a lot of money by now on music they don't even have to physically replicate, distribute, etc., and they're making more all the time.
Comment removed (Score:5, Insightful)
Re:Do they get a share of the sale of CD players? (Score:5, Interesting)
Re:Do they get a share of the sale of CD players? (Score:3, Interesting)
"We are selling our songs through iPod, but we don't have a share of iPod's revenue," he said.
No, it really sounds like he want a part of the iPod profits. To claim that they don't have a share of the profits from the music store would be more of a lie than I'd expect even from a representative of the music industry.
Re:Do they get a share of the sale of CD players? (Score:2)
Re:Do they get a share of the sale of CD players? (Score:5, Funny)
Now quick, somebody mod me up +5, fucking confused.
Re:Do they get a share of the sale of CD players? (Score:3, Insightful)
I think he honestly believes they deserve a cut of the hardware sales that run the music. It's like a game maker telling Dell they deserve a cut of their profits from gaming machines.
Re:Do they get a share of the sale of CD players? (Score:5, Insightful)
I fear you are both correct and mistaken. From the article:
Mr. Bronfman said the music industry should not have to use its content to promote the sale of digital music devices for Apple or anyone else, and not truly share in the profits. "We are selling our songs through iPod, but we don't have a share of iPod's revenue," he said. "We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.
When he said that they were selling their songs through iPod he should have said iTunes but he didn't mean iTunes, he meant iPod. He thinks that the record industry is helping Apple sell hardware and that they should get a share of the profits on the hardware.
Here's something that I stole from a site that stole it from the Wall Street Journal:
Consider the economics of the iTunes store. Apple charges 99 cents per song that is downloaded by a consumer. Of that 99 cents, Apple pays the record label about 65 cents for licensing rights to the song, estimates Charlie Wolf, an analyst at brokerage firm Needham & Co. Other analysts come up with similar figures. In addition, Apple incurs costs such as credit-card fees, which typically amount to 25 cents a transaction (which can include several songs), plus 2% to 3% of the amount charged. The result: On average, Apple earns less than a dime for each song it sells from the store.
So here's what's going on. If you buy one song and use your credit card (assuming that your credit card company and Apple will let you use your credit card for a 99 cent purchase) the credit card company gets 25 cents plus another 2 or 3 cents and the record company gets about 65 cents. That leaves Apple with 6 or 7 cents. If you buy more than one song at a time the credit card company doesn't get the 25 cents on the second through infinity dollars but they get that 2 or 3 cents on every dollar and that 25 cents on every customer. So the best Apple can do is 32 cents per song minus 25 cents per customer, and that money has to cover all of their expenses--bandwidth, advertising, payroll, electric bill, water bill, telephone bill, building maintenance, lawyers to keep the record companies from getting any more than they already do, and anything else that they wouldn't have to pay if they weren't running iTunes.
The record companies, who don't have to pay much of anything they didn't already cover getting those songs ready to go onto a phonograph record, cassette, 8-track, or CD (except for the lawyers to try to screw Apple), know that Apple's not about to give them a bigger cut out of that 99 cents, so the only way they are going to get even more "money for nothing" is to either convince Apple that the record companies deserve a cut of the profits on the hardware (which would go over about as well as Microsoft saying they deserve a cut of Mac sales because Office for the Mac drives Mac sales) or getting the price per song above 99 cents.
You'll notice that although he said that the market should decide the price and not a single retailer, he didn't say anything about any songs selling for less than 99 cents, so before long that will be the "fair market price" for songs so low in demand that no one will pay more, and everything else will be higher in price and before long you'll be paying as much for downloads as for a physical CD, at which point they will no doubt declare physical CDs underpriced.
Remember, Apple is doing almost all of the work and paying almost all of the expenses on iTunes while the record companies get 65 per cent not of the net or the profit, but 65 per cent of the gross and the record companies think that they're doing Apple a big favor and that they should get a cut out of each iPod sale as well. Tell me again who the pirates are?
They want Apple to license the iPOD, not sell it (Score:3, Insightful)
wow ?! (Score:4, Funny)
!?
Re:wow ?! (Score:5, Insightful)
Taking this to its logical conclusion (Score:2, Interesting)
Re:Taking this to its logical conclusion (Score:5, Funny)
The Obligatory Remix (Score:5, Funny)
“We are selling our gas through H2, but we dont have a share of H2’s revenue,” he said. We want to share in those revenue streams.
The cash register industry did not return calls seeking comment, but representatives for the tobacco industry are reported to be participating in high level talks with the AMA.
Re:The Obligatory Remix (Score:5, Informative)
Also, he has apparently never taken Strategy 101, or been introduced to the Theory of Complements - iPods and iTMS (and the downloadable music it distributes) are a classic example of complements. Just because Apple has for ONCE actually played a situation intelligently from a strategic perspective and the music industry has yet again failed to do so (monopolies rarely have any incentive to act strategically) doesn't give them a right to shit.
This diatribe can be simplified into "a company that is not us is making profits in something vaguely related to music and we don't like that". After I finish wiping away the tears of sorrow from my eyes, allow me to say how many nano-give-a-shits I have for this guys problems.
Re:The Obligatory Remix (Score:5, Insightful)
Actually (Score:3, Insightful)
Part of this is because real economics isn't as simple as the little supply and demand curves we were shown in ECON 202. For anything that's an entertainment product, it does not ever exist in a complete monopoly situation. Even if you have a complete stranglehold on one kind
Re:The Obligatory Remix (Score:5, Informative)
So Edgar Bronfman, Jr. is the CEO of one of the Big Four music publishers, part of a proven price fixing cartel, and one of the major controlling organizations of the RIAA, a "trade group" (i.e. cartel) that ruthlessly pursues anybody who's interests aren't aligned with the publishers.
What were you saying again?
Notice what he didn't say... (Score:5, Interesting)
So I guess no songs should be LESS than $0.99. Apparantely that is the minimum value for all music clips of any length or quality. Oh, and I like how they want a cut of the "iPod" revenue. Maybe they should go after CD player manufacturers and home stereo's too, by that logic. Classic.
Re:Notice what he didn't say... (Score:2, Insightful)
Suddenly they have a problem with a fixed price for a song?
Re:Notice what he didn't say... (Score:5, Insightful)
Re:Notice what he didn't say... (Score:3)
kill the goose (Score:5, Insightful)
Re:kill the goose (Score:5, Funny)
It's greed, but it's brilliantly strategic greed.
Wow. A walk down contradictory lane! (Score:5, Insightful)
So yeah. It will never be cheaper than 99 cents. We don't want to give people that 99 cents is a thing of the past, but we want a piece of the pie, and 99 cents isn't doing it.
Real bright there guy. You suck.
Tell you what. Let's go variable then. Songs older than 5 yrs are 50 cents. More recent non-top 100 tunes are 99 cents, and top 100 are $1.50.
Of course that will never happen.
Re:Wow. A walk down contradictory lane! (Score:3, Interesting)
Re:Wow. A walk down contradictory lane! (Score:5, Insightful)
songs 20 years old should be 12 cents.
songs 40 years old should be 1 cent.
and the RIAA/MPAA should be burning in hell.
should is a wonderful word. let's show some respect for it.
Re:Wow. A walk down contradictory lane! (Score:5, Insightful)
Small misguided notion (Score:2, Funny)
That's all well and nice, but raising the price of a song by ten or twenty cents means that your local artist may now receive another half-cent! Don't you feel like you're helping out now?
Market decide.. don't make me laugh (Score:5, Insightful)
Let the market decide? Oh give me a freaking break. There is no market, not in the free market economics sense of the word anyway. I can buy petrol, gas, cars, PCs, coal, condoms or even a blowjob from any number of suppliers. This competition drives down prices and forces companies to compete on quality and price. Copyright guarentees as monopoly on your product. If I want to buy the latest white-stripes album I can only buy it from one label: V2 Records. Sure I can go to different stores to try and hunt down a lower prices but V2 set the price. The consumer only has one choice: buy it, or don't buy it. In a real free market economy the consumer has a third, more powerful option, to find a cheaper supplier.
This is terrible for the consumer and almost always leads to disproportionate prices. Rather than supply and demand setting the price of the music, V2 can simply mandate it and then it will be so. The market becomes distorted and everybody loses except the labels. There's this idea that the artist somehow needs to be compensated for his work and that's fine but why not do it off ticket sales for concerts? I don't see why we need these artists need these government granted monopolies to make money!
Simon
Re:Market decide.. don't make me laugh (Score:3, Insightful)
The same thing that happens to the rest of us when we get sick, or don't want to do our jobs any more.
Price Fixing (Score:5, Insightful)
Generally, that is considered illegal.
But hey, who am I to talk, I haven't been convicted of price fixing, so how should I know?
Oh wait, they have.
Re:Price Fixing (not) (Score:3, Funny)
as i understand it, there's a contract up for renewal between apple and the music industry? this would just be posturing during the negotiations. normally the public isn't exposed to the bickering, lies and pissing matches between a retail outlet and
More? (Score:5, Insightful)
How about some songs should be $0.99 and some should be less?
Why this is wrong (Score:3, Insightful)
We all have seen the many publisher provided services for purchasing E-books, E-Music, and Software Downloads.
These services try to limit your options and choices or even to remove them from you totally. With many of these services you must agree that you do not even own that which you wish to purchase in order to buy it. Instead they license you right to use their private property.
We see the prices on the virtual which rival that of the physical. We instinctively know that the production cost of a E-book, Downloaded software, or MP3s is so much less than the cost of a compact disc or a printed book both of which require paper, ink, artwork, packaging and so much more that is totally lacking from the ethereal versions.
Their sales decline. "Stop the thieves" they cry out into the night! Make more and harsher laws to protect that which is already protected they demand of our governments. Protect our property and damn their rights is their idea of an ideal. I am a honest person is my vehement reply. So why attempt punish me for the crimes of others.
They attempt to smother new technology on the premise that it may possibly be used for illegal activity.
While it is not my intention to justify the misappropriation of their material I must point out it's their own fault really. I blame their lack of foresight and their lack of anything resembling common sense. They do not exploit the markets available for them or if they do it's a halfhearted attempt. In the real world people are not buying what you sale one common step generally taken is to consider lowering your prices until your sales pick up. This also applies on the Internet.
In a concise conclusion I state that I personally prefer to compensate the authors and composers of the material that I so enjoy in my daily life. Currently I do so off-line. So Publishing and recording industries I say make it worth my while and convenient to do so and I will be one of the first in line online.
Two thoughts (Score:4, Interesting)
As for wanting a share of the music player revenue stream and needing to "monetize their product", what's wrong with the ~75c per song of pure profit that they're making now? Music labels didn't get a cut of Walkman or Discman sales; why should anything change now?
good point (Score:4, Insightful)
I'd like to see a DRM technology that allowed music buyers to resell the music on eBay... By allowing the owner to set the price, you allow reselling and variable pricing... the studio (original owner) could get a piece of every transaction...
A Cut of iPod Sales? (Score:3, Insightful)
Do software developers get a cut of computer sales?
Do game developers get a cut of console sales?
[Insert countless other examples]
Ummm... No.
Re: (Score:2)
Re:A Cut of iPod Sales? (Score:2)
Comment removed (Score:5, Informative)
Re:A Cut of iPod Sales? (Score:3, Insightful)
Anyone notice how (Score:5, Insightful)
Sometimes, the best thing to do with a certain type of person is sit back, keep your mouth shut, and let them bury themselves.
why are they so mad? (Score:2)
are they trying to make even more money out of this new technology than they traditionally have from brick and mortar record/cd/tape shops? if anything they win beca
The problem here... (Score:2)
Translated from marketese (Score:2)
Translated from marketese this becomes:
"Someone is making money from music, and it's not us. We don't like it. We want that money."
So, what were they saying again, that they weren't greedy?
let the market do it (Score:2)
As such, Apple deserves to get a cut of the revenue; after all, they are doing the work of selling it.
If the music industry were to act as a distribution channel for iPods, maybe they could claim a right to some of the revenue.
Regarding the market setting the price for songs -- I totally agree, with one caveat: There must be a minimum amount the artist gets per download.
If the market sets the price, I'll bet we see less p
Variable pricing (Score:2)
No, actually, how dare he presume to speak for consumers? What's his idea of the market? Does he want to charge more for popular tracks, which we might reasonably assume sell in larger numbers thus naturally resulting in greater revenues for him and the artists, or does he want to charge more for less popular tracks so he has a greater chan
Some should be more (Score:2, Redundant)
Some songs should be $0.99 and some songs should be more.
Hmm. How interesting that he didn't say some should be less. I agree with the idea that the market should set the prices, and that those prices will inevitably land all over the place, but he wants to define a lower bound.
I think the RIAA should pay *me* to listen to some of their crap. I know they pay other people to get me to listen to their stuff. I propose we cut out the middlemen and they just pay me directly.
This article kind of stinks... (Score:2)
This single sentence (Score:2, Redundant)
"Some songs should be $0.99 and some songs should be more."
If he was REALLY interested in letting market forces decide prices, they could be less then $.99 as well.
But you know that's not in the plans.
Variable Pricing (Score:3, Insightful)
Article Summary (Score:5, Insightful)
Apple: "You guys are greedy."
RIAA goons like Bronfman: "We're not greedy. We just want all that money Apple is making. We don't want to do any extra work or promotion. Just send us more cash."
One little piggy went to market (Score:5, Interesting)
The free market rocks!
Wait... wait a second. He didn't say anything about being cheaper than 99 cents, did he? Crap.
Warner Music Group CEO, Edgar Bronfman Jr... (Score:3, Insightful)
There is no reason at all that the artists need a middle man taking his cut and doing nothing but reduce their income by being stupid.
Sure, let the market decide (Score:3, Insightful)
Like hell you do! (Score:3, Insightful)
The rebuttal from the industry shows how ignorant they are of the new economy structure that has been in place, for how long? 6 years.
My God people.. Wake up! It's the 21st century and you are employing your goons and torpedos in old-fashioned payola tactics and strong-arming old women for the sake of a few bucks instead of embracing the new economy.
When will someone PLEASE drop the other shoe? (Score:5, Interesting)
There is obviously a transition, albeit slow, at hand. I read and hear more and more often of known musicians doing their own recording and there's a growing number of indie artists doing everything from soup to nuts - meaning recording, producing and marketing their own content. I wish things would speed up. What does it take for this trend to gain momentum? How come I don't see these artist who are involved in producing and marketing their own content banding together and creating their own marketing campaigns to promote purchasing music online? A campaign in direct challenge to these goddamned douche-bag record companies crap anti-piracy/it's not fair to our artists three ring circus?
Here's what things I see needing to happen before everyone can fully give the labels the collective finger
In short. revolt, tear it all down and then all of you people out there in the industry who have an honest and useful talent step up and rebuild it. There's no reason you shouldn't continue making a living and there's every reason to rethink your business and end up making much happier customers and in turn making yourself a really nice living. To hell with fighting the existing recording industry. To hell with them, go around them. What law exists that sa
Remeber when a casette single was $2.99!??? (Score:3, Funny)
And for my next demand... (Score:3, Funny)
Higher and LOWER prices... (Score:3, Insightful)
People, read the news!
"That's not to say we want to raise prices across the board or that we don't believe in a 99-cent price point for most music," he said. "But there are some songs for which consumers would be willing to pay more. And some we'd be willing to sell for less."
I think the $0.99 model for any song is stupid, because it doesn't reflect the value of the song. Some songs should sell for $0.01 and some should sell for $10.00.
Feedback loop (Score:5, Interesting)
Say it ain't so (Score:3, Informative)
I'm sorry but how is that not greedy?
And as a consumer I think $.99 for every song is MUCH better than a variable pricing scheme. I can buy any song knowing it's only going to cost me a buck and don't have to worry about that random $3 song that I otherwise would not have bought.
Well, that's easy to solve, then (Score:5, Interesting)
If this guy thinks that songs should be sold for more than $0.99, then he should go ahead and do so. I mean, really, go ahead and start selling songs for more than that and see how that works out. He is perfectly free to set up his own online music store, and because of the extreme flexibility of the technology involved, this will just involve getting the files on to your portable music player from a URL instead of from the iTunes application.
Once he has done this he can set the songs in his music store to cost $1.99 or $5.00 or $53.00 or absolutely whatever price he likes, and if people choose to buy it then all of that money will go right to him. While of course meanwhile the iTunes Music Store will still be back there offering quality music at $0.99 a song.
Then the market will decide for itself. That's what he says he wants, right?
The market has decided (Score:5, Insightful)
I think the music industry's problem is that the market has decided, and it's decided it doesn't like the music industry's standard terms. The music industry doesn't like that decision and is trying everything they can including whining like a spoiled brat to get it changed. Unfortunately for them, the market isn't buying it (in several senses).
He forgot one point... (Score:3, Insightful)
He forgot "and some songs should be less". That is, if he really wants to let the market decide.
Jobs was right, the industry is greedy.
-Charles
"The market should decide"? (Score:3, Insightful)
Just sayin...
Re:Perhaps, my head is up my ass... (Score:2)
you've hit the nail on the head
Re:two sides (Score:2)
I can't go into a grocery store and say, "Hey, I think this Snickers bar is only worth 39, so that's all I'm going to pay." If the thing costs more than you want to pay, you have two options... buy it or don't. If something is priced beyond it's perceived value, people won't buy it forcing the manufacturer's hand to cut the price and probably jobs in the process or buy supllies from cheaper suppliers to reduce
Re:two sides (Score:5, Informative)