digital music/video
11/02/2005, 12:20pm, EST
Wednesday, November 2nd
Universal, Warner push "multitier" music pricing
In addition to downloaded tracks, U.S. consumers downloaded 11.3 million albums this year through mid-October, out of 436.1 million albums sold, says White Plains, New York-based Nielsen SoundScan. "It's a blip, not a trend," Paul Burger, 50, president of London music-management agency Soho Artists and the former head of Sony Music in Europe, says of the leveling off of U.S. downloads. That belief has music companies, led by Warner Music, fighting to boost the 99-cent retail price on their most popular songs downloaded on Apple's iTunes Music Store. "The market ought to be able to decide, not a single retailer,'' Warner Music's Bronfman, 50, said in September at a Goldman Sachs Group Inc. conference in New York. Days earlier, Apple CEO Steve Jobs, 50, said at a Paris news conference that music companies were being "greedy" by seeking more for downloaded tracks, adding that it would only encourage piracy. "There will be variable pricing, multitier pricing," Universal Music CEO Doug Morris, 66, said Oct. 6 at a meeting of financial analysts in London. "The issue is going to be when and who blinks first."
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I do believe Steve Jobs is right when he says they are getting greedy. Every time that companies switch to a new format, the prices increases (out of line with inflation), DESPITE the fact the new format is actually cheaper to provide. CDs are MUCH cheaper to produce than cassettes ever were, but we were forced to pay more?
Frankly, people download because the companies, be they record, movie, or TV, don't give us what we want. I'd be happy to pay for Lost in the UK, but since I can't, I might be forced to download it. I'd be happy to pay for quite a few TV shows, but I can't, so I might be forced to download them. These companies, ABC/Disney not withstanding, don't offer us what we want, and then they rant because we "steal" them. At least the BBC have a clue. Thank God I'm British.
If I was a big artist like Sting, I'd negotiate separate contracts with the retail CD guys and the online guys like iTunes. And ultimately, that's what the record labels are afraid of...that online sales will make them obsolete...
iTunes is not without flaws. There IS competition - higher priced CD's with no DRM, and lower priced (okay, free) Acquisition/P2P songs with great selection and no DRM, but with ethical qualms.
But this set of compromises (Selection, DRM, Quality, Price, Portability) is a very successful one, and the record industry people should not monkey with success. They make most of the money iTunes generates.
What's the problem? They look over and see a successful technology that Steve & Co. built, and want a piece of it. Do movie studios get money from VCR sales? It makes no sense. Greed, plain and simple.
Steve, stand your ground.
and you're all "let the market decide," well, are you any more a representative of the market than steve/apple? i mean, you did agree to this pricing structure, but now that you can see a lot more money can be made, you're deciding to change horses midstream (or at least saddles).
what they are terrified of is this... those people who have bought from the iTMS now OWN their music. the music companies have NO leverage with the consuming public. if everyone was renting their music, the record companies could raise prices, and hold people's accounts essentailly for ransom, saying "either pay up, or we'll turn off your account and then you'll have NO music."
cute, huh?
so savor your purchased, OWNED, BURNABLE music for as long as you can, because the record companies are losing control of the market, NOT to apple, but to the consumers.