For some reason, the terms, "Goose", "Golden Egg" and "Killing" comes to mind....

Of course, how long is the $.99 price in the iTunes store locked in at?

I would not pay more than 99 cents per song. I love iTMS, but a price raise would be ridiculous.

I've spent more on iTunes music in the last year then I had spent on CDs for the previous 5 years.

I thought that the music industry might appreciate my patronage, but apparently it was just a signal for them to punish me.

Way to go, music industry.

Saying Jobs is "fuming" in the headline is editorializing a bit. The TMO story only describes him as "less than happy" and the linked story merely reports that he was "angered." Fuming suggests rage.

[/nitpick]

-Dan

If they raise prices they are gonna screw it up. This is different than the normal situation when prices are raised because there are such easily implemented alternative ways of obtaining music such as P2P and AllofMP3.com . It is bad karma to steal but it is also bad karma for the labels to get too greedy. They might have to get used to the fact that it is a brave new world they are living in.

The music industry is doing less than ever to produce and deliver the content. They should just shut up and take what they are getting.

If they were smart (chuckle) they'd leave the thing at 99 until everyone gets accustomed to it. i.e. another 5 years at least

iTunes is becoming too big for the RIAA. Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out. RIAA sees the danger and wants to force people back to CDs. Once iTunes flops expect iPod sales and Apple stock to crater.

Like many others, I have bought much much more music since I can buy online with itms. 99 cents an song imo is high and can cost more than a physical cd. I do consider it with, as you can pick and choose your songs. A price hike and mr. greedy music exec can say goodbye to my future business.

Deja vu! We read the same story in the NYPost when Apple was reupping the labels back in April last year. I thought Steve said at the time that the new contracts were for three years (and the original contract was for one year). If this story is true, then I guess the new contract was for one year too...

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RealityCheck wrote:
Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out.

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RealityCheck wrote:

Once iTunes flops expect iPod sales and Apple stock to crater.

Ah, yes, I remember this from business school. "Becoming large and successful is the first step towards failure."

McDonalds sells billions of hamburgers? Out of business the next week.

Microsoft makes the dominant OS? Bill Gates is now poor.

All cars need gas for fuel? Oil companies start filing for bankruptcy.

I can see where you're comign from RC. As you can see, I've found several real-world examples to back up your point of view.

The record industry is a cartel and has nothing to do with music. All they see is profits and margins. They will never, ever do anything for the consumer. The machine is broken, and something like iTunes is what can make it right again....and that's why they want to kill it.

If they go force through a price increase, I will share my every one of my 3000 (most-CD-ripped but a few iTMS-bought-but-can-be-hymned) songs with everyone I know, and discourage anyone from buying music online.

As it is, $.99 is really too much, given that the quality is lower than CDs, and that most new CDs can be bought for $9-12 these days. If they really wanted to make more profit, they would lower the price and sell 10x as many copies.

Each extra copy costs the labels how much to make? That's right, big fat zero. They are not only greedy, but they are incredibly stupid. They really do deserve to have their businesses go bankrupt and have everyone just steal the songs.

But only a pennny. I would pay a dollar, that is a pretty much the limit for me. I see $0.99 as a buck anyway. I even have to think carefully for an album that is priced at $9.99 and only has 10-12 tracks.

Like Small White Car I have bought more music per week since iTunes and iPod than I have in the old days, Furthermore I am buying most of it from the iTunes Music Store.

This reminds me of the old Napster days. Napster was the best thing that happened to the music industry. When people downloaded songs from users, they looked at the other songs from those users. It was a way of them exploring new music. On top of that, most people who downloaded a song or two from an artist off Napster often went out and bought their album. But then the RIAA got really greedy and the rest is history.

Once again, we have another case of the RIAA being too greedy...

I'd like to see Apple start working directly with the artist - cut out the middler here. Don't the record companies take in the lion's share of the 99 cents per track already?

... I'll buy a lot less. Greedy bastards.

Well, at least a bit over halfway through. ITMS really *is* a new music distribution medium, or at least the first seriously successful one of its kind. The logical next step for Apple is to start negotiating directly with artists, cutting the gatekeepers (i.e. RIAA) out of the loop entirely.

Any institution, over time, becomes primarily concerned with perpetuating its own existence & the prosperity of those running it over the needs of its members (or customers). The RIAA (and MPAA) are simply the most blatant examples.

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RealityCheck wrote:
iTunes is becoming too big for the RIAA. Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out.

Umm, this is bad. He's actually making sense.

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RIAA sees the danger and wants to force people back to CDs.

Er, why? CDs are even worse than on-line if you're trying to control everything.

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Once iTunes flops expect iPod sales and Apple stock to crater.

Whew! The RC we all know and love comes through!

Bonehead.

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RealityCheck wrote:
iTunes is becoming too big for the RIAA. Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out.

Hey...wait...are you saying iTunes has been successful? Wow, maybe RC's finally become a convert!

I pay $9.99 for an album on iTunes.

I pay $14.99 for the same album in the store.

In the store, I get a nice package, a CD, and a nice person who "completes the sale".

I'm sure everyone (Apple, RIAA, me) is saving money by allowing me to buy my album at $9.99 - all that distribution - (including the manufacture, delivery, set-up) of the CD display is gone.

If I suddenly had to pay $14.99 for both a CD in the store and on iTunes, I'd go back to buying that CD in the store.

If BOTH prices increased, people would go back to looking for online services to provide them with free MP3's. I can see why Steve is mad.

As long as the government prints more money faster than the economy is growing, we will have inflation. That means that the price of something like a $.99 song is getting cheaper every day. With inflation running at 3%, a $.99 iTMS song last year would have to cost $1.02 this year to be the "same" price in real terms. $.99 may be too high, but $1.02 is not an increase over a year ago.

Now it will be interesting to see what happens relative to inflation.

… for the music industry topshots: Stupid #$$&^)#@!

[edited by DrShakagee for language]

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see3d wrote:
As long as the government prints more money faster than the economy is growing, we will have inflation. That means that the price of something like a $.99 song is getting cheaper every day. With inflation running at 3%, a $.99 iTMS song last year would have to cost $1.02 this year to be the "same" price in real terms. $.99 may be too high, but $1.02 is not an increase over a year ago.

Now it will be interesting to see what happens relative to inflation.

You have a point, but the (overall, on- and offline) sales volume is going up, too, so the record companies are getting more money. Plus, online sales as a percentage of total sales is going up, so their profit margins are increasing as well, because of the lower distribution costs of online sales.

In many industries, when sales are going up and production costs are going down, the price to consumers actually DROPS, not increases. Theoretically, prices are set by the interaction of supply and demand. Yes, demand for online music purchases have risen, but so has supply. Not only have more vendors joined the market, but the beauty of online distribution is that supply automatically rises to meet demand. The supply is virtually infinite, without the expensive costs associated with producing and keeping a large inventory.

CDs cost less to manufacture than the cassettes they replaced, and yet they always sold for more than cassettes, despite the record companies claims that they would eventually lower the prices as CD manufacture got cheaper. They got away with charging more because CDs are more convenient. Online distribution is cheaper and (arguably) more convenient still. While record companies should look at this as a way to charge the customer less, they are salivating at the possibility of charging more for online downloads.

Unlike with CDs-vs-cassettes, I don't believe customers will stand for it this time. The difference then, it was impossible (or impractical) to transfer recordings from a cassette to a CD, so you really were compelled to make the more convenient choice. Of course, it's easy to transfer music from CDs to iPods, etc. (so long as the record biz doesn't continue to interfere with that process), so if online prices rise, we'll simply go back to purchasing physical CDs. Which the RIAA won't complain about too much; they still get their dough, and they control the distribution. But they'll have to accept high production and distribution costs, and they'll have to watch out for people like me, that previously bought nearly all my music on used CDs.

Lastly, remember that the RIAA-represented companies were found guilty of price fixing, and as their "punishment" issued coupons that consumers could redeem for money off--you guessed it--overpriced CDs. Hardly an organization that fosters trust or good will with customers.

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RealityCheck wrote:
iTunes is becoming too big for the RIAA. Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out. RIAA sees the danger and wants to force people back to CDs. Once iTunes flops expect iPod sales and Apple stock to crater.

Wow! You _almost_ made a reasonable argument that wasn't anti-Apple.

Of course, you then messed it up with the last sentence.

So close, yet so far.

I too have bought more music,(and spent more money) in the last 3 years than in the last 20 or more!

It's nice to be able to hear of an artist or new addition to a genre, and get it at a somewhat reasonable price/kbps quality ratio and put it on my iPod.

So now it will become more expensive? Gee, way to go ... stomp on customers who are paying for, and not stealing, the music. And we are buying it regularly, without hesitation. I'll look up artists who have caught my ear ... then, I buy it.

Just when I was getting comfortable with dealing with these folks, they want to up the ante.

Some the above comments have a point ... that the RIAA is scared of this new world. And their greed is becoming apparent.


The cries from RIAA about the need for recouping the lost revenues from file sharing of music are the latest salvo in the reason to up the price(s).

So this this my thanks for buying the music ...

(@ least we're able to the BUY music, my friends! Instead of the subscription model... I'm sure there will be a cost increase there ... but that is another thread ...)

Hold firm Steve! Don't let the bastards get you!

JTHapp

I think if Music Industry Executives raise the prices on online music, then

1. P2P sharing will increase because people will be turned off by the price hike.
2. There will be an increase in people stream-ripping Napster to get their music free.
3. There will be an increase in people purchasing songs from Russia, where copyright laws are weak, and songs can be obtained online for as little as 2-cents a track (such as from http://www.allofmp3.com/)

Using WinAmp or Virtuosa and web-documented techniques (http://marv.kordix.com/archives/000400.html), it is possible to download and convert on a single PC, 11,500 music tracks a day from Napster, and convert them into DRM-free formats such as MP3s. This translates to 161,000 music tracks for free during the 14 day free trial period from Napster.

Thus, all it takes are 7 people (e.g. college students) to sign up for Napster's 14 day free trial, work in concert, and download ALL 1,000,000 music tracks in Napster's collection, and convert ALL of them into DRM-less MP3s - all within the 14 day trial. Then they can spread them to the world.

Raising prices on the iTunes Music Store would encourage such activities.

Too bad there aren't music rental stores just like Blockbuster's Video Stores. I wonder if they can be done.

I think if Music Industry Executives raise the prices on online music, then

1. P2P sharing will increase because people will be turned off by the price hike.
2. There will be an increase in people stream-ripping Napster to get their music free.
3. There will be an increase in people purchasing songs from Russia, where copyright laws are weak, and songs can be obtained online for as little as 2-cents a track (such as from http://www.allofmp3.com/)

Using WinAmp or Virtuosa and web-documented techniques (http://marv.kordix.com/archives/000400.html), it is possible to download and convert on a single PC, 11,500 music tracks a day from Napster, and convert them into DRM-free formats such as MP3s. This translates to 161,000 music tracks for free during the 14 day free trial period from Napster.

Thus, all it takes are 7 people (e.g. college students) to sign up for Napster's 14 day free trial, work in concert, and download ALL 1,000,000 music tracks in Napster's collection, and convert ALL of them into DRM-less MP3s - all within the 14 day trial. Then they can spread them to the world.

Raising prices on the iTunes Music Store would encourage such activities.

Too bad there aren't music rental stores just like Blockbuster's Video Stores. I wonder if they can be done.

This is the same thing that drove people to mp3's in the first place. CD's became way to expensive becuase the music companies were to greedy!!!

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Guest wrote:
Too bad there aren't music rental stores just like Blockbuster's Video Stores. I wonder if they can be done.

It wouldn't work for the very reasons you mention: People would just copy the music. Besides, Blockbuster and its peers are seeing their revenue fall because--get this--the movie studios realized that if they reduced the price of their movies, people would actually buy more movies (and rent less).

... you can only contact the webmaster on the RIAA's site. They position themselves as some kind of champions.

I like how the title of the site reads as "Recording Industry Ass..." in a Safari tab though... so appropriate.

A European Union committee is currently looking into whether the UK Apple iTunes music store is charging too much for music tracks i.e. Ј0.79p.
Never mind a price hike.

You know like Napster and such? Will they too have to increase their fee's simply to allow users to rent music? If not perhaps this is the industry's attempt to get out of allowing users to own what they purchase and forcing them to simply rent. If so then Apple should use the across the board increase in music prices ie to own or to rent and keep the 99 cent price bringing iTunes back to a loss leader in order to keep selling the iPods and to force the likes of Napster down the drain. Then Apple being the big and perhaps only kid on the block ...maybe Apple can force the industries hand in this. IF the music industry is trying to force Apple and or the to own industry out of the music selling business perhaps Apple should start signing artists with it's like 4 Billion plus reserves and also get as many independant labels as possible and go head to head with the industry. I think Apple can and would give artists better deals than the industry currently does...especially up and comers and 4 billion would represent a lot of potential contracts..that and signing independant labels and smaller labes...signing acts away from the major labels might be a kick in the nads these guys richely deserve!!!

Pagan jim

If the RIAA goes through with this, Steve should make a big push with the small labels and independents to keep their pricing at $.99. Make the RIAA songs stand out as higher priced, and really promote their competitors. iTunes and Apple have the chance to break up the music cartel, and the cartel seems more than willing to do everything to help in this process through their bonehead behavior. I say let them raise their prices and screw themselves, and make that much more room for the non-RIAA artists out there.

edtekker, that is not good enough. Apple should either buy one of these music labels or take over the role of a music label itself. Simultaneously, buy a movie distribution firm too. This way, Apple will become a full service digital entertainment distributor.

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Mace wrote:
edtekker, that is not good enough. Apple should either buy one of these music labels or take over the role of a music label itself. Simultaneously, buy a movie distribution firm too. This way, Apple will become a full service digital entertainment distributor.

That would, most definitely, end up in court vis a vis the Apple Corps settlement. No denying, then, that Apple Computer would be in the music business.

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Steve W wrote:

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RealityCheck wrote:
iTunes is becoming too big for the RIAA. Eventually iTunes could get so big that Apple could negotiate directly with the artists and leave the RIAA out.

Umm, this is bad. He's actually making sense.

My god, the RIAA are so insane that even RealityCheck sounds rational! Now that is scary!

Please don't talk about inflation. I remember paying $1.00 for a 45 record in the 60s and 70s.

When the 99 cent price was established the media wrote about how the labels were still making the same margins per song as CD sales. With the launch of iTunes Apple tried to pioneer the concept of micro-payments, about 10 or 15 cents if I remember correctly. 99 cents was the best they could negotiate with the dinosaurs... err I mean labels.

As has been pointed out, distribution costs for labels are very low. It is Apple who bears the brunt of the expenses, including transaction fees. Steve has a right to be pissed.

I agree with RC, let Apple cut out RIAA and deal directly with musicians. Apple could probably give the artists a much better deal than what labels negotiate with most artists. That scenario would make me feel much better about spending my money on music.

Currently I try to balance my music purchasing with my music sharing to a level that I feel is moraly just. But then again I live in Canada where file sharing is legal.

Find your own way of punishing the labels for their greed.

I can see a twofold reason:

1. Greed - make more on the individual track downloads

2. More greed - push people to sign up for "cheaper" rental models, then make them pay and pay and pay for evermore without ever owning anything. Sure, there are stream rippers etc., but the vast majority of people aren't techy enough to know how to do that. They want rental to be the norm, because rental keeps on paying.

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Intruder wrote:

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Mace wrote:
edtekker, that is not good enough. Apple should either buy one of these music labels or take over the role of a music label itself. Simultaneously, buy a movie distribution firm too. This way, Apple will become a full service digital entertainment distributor.

That would, most definitely, end up in court vis a vis the Apple Corps settlement. No denying, then, that Apple Computer would be in the music business.

How about buying Apple Corps and Disney sound? New company will be run like a conglomerate like General Electric. Is called Steve Jobs Inc, SJ for short.

In Australia we still don't have access to iTunes music store so frankly I don't give a damn. Seriously though, I spent years in the Australian music industry as a musician, promoter and even representing musicians in court and this comes as no surprise.

The record companies remind me of nineteenth century capitalists; squeeze all the life blood out of the bands, rip off the consumers and then cry poor. In other words they screw the providors (musicians), then screw the receivers (consumers) and now in the face of illegal downloads they sue pissed off con sumers.

Now they want more money from consumers…it never ends.

One final word to Apple and Steve Jobs after you get around to releasing iTunes music store in Ozstralia (ya know after its released in Lower Slobovia) increase your bit rate for downloads. 128kps sounded like rubbish when I ripped my cd collection to my ipod and it sounds the same at the music store.

Well, the labels had their chance to be able to exist in the online world. If they decide to raise prices on this already, they will be putting a nail in their coffin. Doesn't surprise me. Those execs lack any type of common sense.

Watch the peer to peer file sharing grow exponentially again. I'll be laughing as they continue to whine about illegal downloads.

I've purchased a ton of music on iTMS. Much more than on CDs which I thought was a ripoff (paying $18.99 for ONE song I heard on the radio, then getting 10 other crap songs).

Dinosaurs. They'll be gone soon enough.

Try Napster or Real biting it, not iTunes. There will be two craters from Napster and Real pretty soon. With 70% of the market share iTunes isn't going away just like Apple didn't go away 5-10 years ago. You need a reality check. Also Apple doesn't rely on it's music sales so if the prices were to go up Apple might not raise theres and gain even more support with it's iPod.

+

MSNBC shed light on the real reason record labels want to raise prices:

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The efforts to raise prices appear in part to reflect frustration over Apple's wildly successful music strategy. Its online store has sold more than 200 million songs and accounts for about 65 per cent of all legal downloads.

These sales have been instrumental in turning the company's iPod digital music player into the world's hottest consumer product. "Our music is not something to be given away to sell iPods," said one industry insider.

Insanity.... (see One Infinite Loop for link to article)

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mrmgraphics wrote:
... "Our music is not something to be given away to sell iPods," said one industry insider ...

Is the insider a musician or a music label executive? Profit margin for music download is higher than the traditional distribution method. So I don't know what this insider is talking about.

The asinine comment by the « industry insider » gave out the Real reason for the hike : in their eyes, Apple is making way too much money off downloads, because they sell iPods ! In their short-sighted logic, Apple makes $349.99 (iPod + 1 download) when the RIAA “only” makes ў.88 or so. They’re too stupid even to try to understand what Napster meant: for the $349 Apple gets, they potentially have a $10000 slice of the action …
With this type of thinking, I don’t understand how come they never came up before with a scheme to prevent playing music on a Walkman !!! They probably hadn’t got the point yet that they were “giving away music” to help Sony sell the Walkman …
This is a sad sign for America when business “leaders” sound so very stupid in their own domain of “expertise” …

In the past 16.5 years the only music I’ve bought was one CD as a gift for someone else and a bunch of pirated cassettes (about 5 or 6 dozen) from a guy selling them door-to-door out of an attachй-case … until the French iTMS opened. Since then, I’ve spent a couple hundred dollars on iTMS tunes, many of which were on my pirated tapes, so the French RIA got its money, even though it was not “in a timely way” … Internet piracy isn’t anything new, I was a user myself, simply because the guy showed up and offered me a chance to impulse buy: exactly the same model as P2P, only physical instead of virtual. Before that, when I was in the US, my friends and I always shared our record collections by taping the vinyl records onto cassettes. Again, what’s new now ?('')

RC does make sense …
At least in his first sentence …
Apple Computer had better get an arrangement with Apple Corps, so it can really become a player in the music business !
If and when the iTMS gets 5M downloads/day and above, it will have critical mass and be able to sign important acts tired of the RIAA and willing to get a better share of the profits from Apple than from their recording companies. And that’s what the RIAA is afraid of, methinks.

Reality Check's actually right, aside from the iTMS flopping. Maybe he thinks people will buy a lie if he works it into some truth. As for the RIAA, they're just comitting suicide by their own greed. People can go and get music for free, so any successful music purchasing service should be charished like life itself by the RIAA, not jerked around for a price hike. They can cry about P2P networks all they want, but in the end, they'll be the ones that did themselves in.