Apple and the major labels headed for a showdown over iTMS pricing
posted Aug 27th 2005 5:14PM
It's no secret that a few of the major labels have been feeling a little, uh, antsy about the price Apple charges
for downloads at the iTunes Music Store letting Apple sell music, they've been making noise for months now about
how they feel like they're getting a raw deal, and the
New York Times reports that at least two of the biggies are headed for a showdown with Steve and co. No label is
definitely pulling out or anything, at least not yet, but apparently the labels are putting pressure on Apple to loosen
up the pricing structure and let them charge more for new hit songs and less for cuts from the back catalog. Oh, and
they're also annoyed that Apple won't open up and let other manufacturers license its FairPlay DRM or allow the iPod to
play DRM'd downloads from other online shops (either move would probably broaden the customer base for
downloads).
We totally get why the labels might want to have the flexibility to charge more for some songs and less for others
(basic supply and demand), but they already get about 70 cents of every 99 cent iTMS download and so jacking up the
price of new music would probably be one of those smooth moves that merely results in plenty of customers returning to
P2P services where they can get the same music for free (and without all that DRM nastiness).
[Thanks, David]
Does anyone care about the sound quality of the music we are downloading? Do you hear the difference between an AAC or MP3 compared to a CD, or LP for that matter? If the record industry is going to raise the price of music to what it costs to purchase a CD there HAS to be a public outcry. I wonder if people would pay the same for a CD if it was shipped over night for the same price that it costs on iTMS. I wonder if the bandwidth was available, would people prefer to download a full resolution CD (750MB+) for a little more money (say $1.50 per track).
A couple years ago you could buy a CD single for .99 - 1.99. That price included packaging, marketing, distribution and the cost for the brick and mortar business to keep it in stock and sell it. Now they can simply convert their track to a digital format and submit it to iTMS where the only over head is marketing (50X50 jpg) and the cost of the server to keep that individual file on. How is this fair to the consumer? I think we're getting raped as it is now!
I think the record industry is now seeing how well the iTMS format works and sees how much they can truly rape us for. You may knock Apple and Steve Jobs all you want for being stubborn and money hungry, but I think that Jobs and Co. are the only ones with the power and passion to stand up for the consumers in this circumstance. I don't think Steve would have any problem telling the record execs to shove it up their asses while he starts some new format. Actually now that I think about it, Apple is just a hobby for Jobs who doesn't necessarily stick up for the consumers, but does things for himself - and I hear he is a very powerful and persuasive person. Do you think that if Ballmer and Gates were running the world's most popular music store that they would stand up to the record industry for what is right?
Those record compnies think that raising prices will get more money in, but it will get less since more people are going to stop buying music.
Record Companies: We have to raise album price to 10 centillion dollars and raise song prices to a centillion dollars.
Apple/Steve Jobs: HOW ARE GOING TO SELL THAT IF THERE ISN'T EVEN THAT MUCH MONEY IN THE WORLD?!?!?!
"A couple years ago you could buy a CD single for .99 - 1.99"
I do hope you're kidding. I bought a Mighty Mighty BossTones album 10 years ago, and it cost me $12. A seccondhand copy of The Halo Benders I bought eight years ago cost me $7. Some Singles only cost a $1.99, but there isn't a full album on this earth that cost as little as $.99 unless you're counting purchases from the Salvation Army.
"Arthur Barnhouse, That just means Appl is better than the other pre-built computer manufacturers."
Of course, now it makes sense, they just have good service with their COMPTUERS! Jesus H. Tapdancing Christ, move on. Apple has good customer service and your claims otherwise are unbacked, get over it.
"and yes there ARE other MP3 players out there, and no they did NOT rip-off the iPod, at least none of the ones being sold at Best Buy did because the manufacturers would have gotten their asses sued off"
Give me a list of companies that were sued by Apple under claims of theft of interface.
"If Apple would allow the other MP3 players out there to support and play the content downloaded off iTunes, then their wouldn't be NEAR the piracy problem that there is now."
Apple was one of the first companies to start selling music online. Before Apple there were a few companies, but their model was poor. They usually only sold from one or two labels, and tended to not let the music in question be played anywhere but on your computer. Apple did not PRODUCE the piracy in question, and to claim so is just foolishness. Apple reduced theft as it increased its share of online downloads. If you really believe that Apple's rules are so draconian, may I suggest you check out what was available as a purchasing model online before iTMS. Apple's DRM is not a problem in any way, shape, or form. In fact, its one of the most lax forms of DRM out there. You can do anything you want to with Apples DRM that you could do under Fairplay.
44: You can burn it 7 times. You don't think that's a limitation? Right there, you can't do everything you could if you just bought the CD. You people defending Fairplay are making no sense. There is a limit to the number of times you can burn the track. You put a certain song on a few mixed CD's for the car, then you scratch them, so you burn them again... oh wait, now you can't burn the song anymore unless you buy the track again.
Of course you can just burn the song and then rip it to mp3. Yeah, that would sound great. Two lossy generations in the file, woohoo. Or I can just download it for free (at a higher bitrate) and be done with it.
To whomever said that those songs purchased from iTMS sound better than what you can get for "free", well, it's, um, free??? Besides, I seriously doubt that 160 kbps AAC files sound better than 320 kbps VBR MP3's. If I'm going to purchase music, it has to be lossless.
50: He's only talking about a single, not an album. His point was that you could (back in the day) buy a lossless, DRM-less CD single for about the same price that you pay for a lossy, DRM'ed single from the iTMS.
"ou put a certain song on a few mixed CD's for the car, then you scratch them, so you burn them again... oh wait, now you can't burn the song anymore unless you buy the track again."
From Apples user agreement: "you can only burn seven copies of the playlist."
The songs can be burned from here to hell and back. You can only burn a playlist 7 times. Out of curiosity, When in the hell would you need to burn anything 7 times? It's a limitation in the loosest sense of the word.
ok Arthur, I know you feel that you just have to defend Apple at every turn, but I think you need to back off a second. I can tell you right now why Apple sucks, and why I won't buy a computer or anything more expensive than an ipod from them. They don't sell warranties to any consumers living in Florida!!!! That's right, the cheap-ass tightwads at Apple decided they don't care about Florida consumers. And guess what! Every other major pc manufacturer does sell warranties in Florida. There are some consumer protection laws in Florida that make it slightly more expensive to support a warranty in Florida, so you know what they decided? We're not going to sell warranties in Florida!! Real bunch of geniuses!!! I have my hp laptop from two years ago, that is still under warranty (and a pretty amazingly sturdy laptop it is too) but if I had wanted to buy a similar laptop from Apple two years ago, I would be out of luck. F*ck Apple!!!
I know this is pretty off-topic, but I get totally ticked off at people that make it their personal mission to defend a company. Their here to make money, Arthur!!! They are no more morally right or superiour than any other company, and anybody who thinks otherwise is a fool.
And your whole comment about how Apple's drm is so much more "fair" than the competing ones is a complete joke. They are exactly the same terms, Arthur!! Except for the fact if I get any player other than the ipod, I can use any of the other services that are out there, or even a subscription service. The one company that tried to open up the experience a little bit for Ipod users, Real, was thwarted by Apple at every turn and they were called "cowards"! Real standup guys at Apple!!!
Number 54, you can rip your Itunes songs to MP3. Who says that you can't use Itunes music songs on any other player? you can, you just get a little bit lower sound quality.
IMO, apples strategy is good. If you ever tried napsters "to go serviece", You'd know that the subscription doesn't include alot of popular songs until later. That means that you'd have to wait a few weeks or months until you can dl the songs for free. That just shows how much power the Music Industry has over Napster. If apple's 99 Cents per track fails, expect Napster prices, real prices, and many other store prices to skyrocket drastically, especially on the popular songs that are bit hits.
"ok Arthur, I know you feel that you just have to defend Apple at every turn, but I think you need to back off a second. I can tell you right now why Apple sucks, and why I won't buy a computer or anything more expensive than an ipod from them."
The interesting thing is I don't. There are things which I don't like about apple, but some horrorshow DRM, and Faulty (and clearly false at this stage) claims about apple's customer service aren't my biggest gripes.
"They don't sell warranties to any consumers living in Florida!!!! That's right, the cheap-ass tightwads at Apple decided they don't care about Florida consumers. And guess what! Every other major pc manufacturer does sell warranties in Florida. There are some consumer protection laws in Florida that make it slightly more expensive to support a warranty in Florida, so you know what they decided? We're not going to sell warranties in Florida!! Real bunch of geniuses!!! I have my hp laptop from two years ago, that is still under warranty (and a pretty amazingly sturdy laptop it is too) but if I had wanted to buy a similar laptop from Apple two years ago, I would be out of luck. F*ck Apple!!!"
I'm glad you put fuck Apple at the end, because, you know, those exclamation points you liberally sprinkled into the statement didn't make your anger clear enough. Maybe next time you could write the whole thing in all caps to really drive the point home.
Yeah, that sucks, and they certainly shouldn't be doing that in my book. Probably they don't get enough purchases out of Florida to make it worth it, but still pretty unreasonable. That's only tangentially related to previous claims concerning customer service, however.
"I know this is pretty off-topic, but I get totally ticked off at people that make it their personal mission to defend a company. Their here to make money, Arthur!!! They are no more morally right or superior than any other company, and anybody who thinks otherwise is a fool."
Honestly, I don't think they're "morally superior." On the subject of customer service I was debunking a previous statement, and on the subject of DRM I was debunking a piece of revisionist history. Speaking of. . .
"And your whole comment about how Apple's drm is so much more "fair" than the competing ones is a complete joke. They are exactly the same terms, Arthur!!"
There go those exclamation points again. You're missing the point of my statement. Look at some of the very first online music services, they were jokes. On some of them you literally could only play the song on your computer. The iTMS brought out one of the first DRMs that was pretty loose, and it's only gotten looser since then. Napsters current terms for using a downloaded song are almost identical to Apple's. Perhaps that's because iTMS gave a pretty good model for selling music. I just don't see how Apple comes out the enemy in all of this.
"Except for the fact if I get any player other than the ipod, I can use any of the other services that are out there, or even a subscription service."
Yeah, this is probably the worst part of their DRM stance. I don't really like it either. That wasn't the part I was defending. I was just saying, that, historically, apple has pretty loose DRM standards.
Now, you had one other thing you were angry about, but I can't remember. Let me check those exclamation points.
"The one company that tried to open up the experience a little bit for Ipod users, Real, was thwarted by Apple at every turn and they were called "cowards"! Real standup guys at Apple!!!"
Oh, that's right, the whole Real thing. Real reverse engineered Apple's DRM without their permission. I certainly don't agree with apple's decision concerning DRM, but once they made that decision, that's it, other companies can't use it. Real essentially provided a public hack and gave the finger to Apple. They're not really stand up guy's themselves.
lly stand up guy's themselves.
iTunes is by far the best deal in legal digital music. You get to own the song unless you inadvertently delete it. The a la carte model ceratainly gives a lot of flexibility. There are however many pros and cons to buying from iTMS to buying ol' school CD's.
BUYING iTUNES AAC
1. Upside: Available immediately; no lines
2. Downside: Limited catalog: No Led Zeppelin, Beatles, AC/DC, Metallica.
3. Upside: Only buy songs you want
4. Downside: No booklet; only cover art GIF
5. Downside: Stuck with 128 kbps bitrate (unless burnt and ripped).
6. Some songs in iTunes are defective (imported from scratched CD's). Last week I bought a song that skipped; contacted Customer service, got refund code; checked iTMS, whole album was re-ripped, and uploaded to store.
7. Initial exclusive iPod compatibility (burn and rip to rid DRM)
8. Neutral: 7 burns per playlist: tweak the playlist (ie, change the order, track names on DRM's files or add or delete tracks)
9. Neutral: Questionable value. Ready-to-export-to-iPod convenience; manipulated media
BUYING AUDIO CD
1. Downside: Long lines; backorder
2. Upside: Infinite selection
3. Downside: Buy the whole CD
4. Upside: Complete case and booklet (Collector's Value)
5. Upside: Uncompressed Audio; sounds like it was meant.
6. Upside: Pressed CD's simply work.
7. Neutral: Theoretical* universal compatibility
8. Unlimited burns
9. Upside: Bigger bang for the buck: more quality, unlocked audio.
*Sony (the company I love to hate) for example has locked up some of their latest albums with copy protection that prevents you from ripping from iTunes, in their bitter attempt to push you into buying one of their crappy mp3 players (and in their attempt to revive a franchise that only accomplished a fraction of the iPod's success). You may still be able to rip from a prehistoric pc/mac. Potentially huge Intellectual Author case to be discussed later on the Court Tv message boards.
One of the things to bear in mind is that there's no such thing as lossless media. All media whether it's VHS, tapes, CD's, or mp3's have the potential losing its data either by natural or chemical means. The [unprotected] Audio CD format is the most efficient if 50 years from now, we sigh at the iPod+iTunes as the fad it may turn out to be (if Steve Jobs is outmuscled by the labels).
Oh, and about music on cell phones goes, FORGET ABOUT IT. Cell phones models are EPHEMERAL. In addition there's the contradicting principle that you can't listen to music and talk to someone at the same time. The phones heat up like a P4 before you know it. Even though I heard that Apple might go off to develop mass market products, and one of them might be as a wireless carrier. Who knows?
A Video iPod seems more like it; beat the crap out of Archos and Creative. Now that's more like it.
Joey,
The reverse of your argument is also true. Arthur has just as much right to defend Apple as you do to rip on them. Which of you is more right? To my eyes, the one with the facts on his side. AB has been providing facts as a defense against those who are ignorant about DRM, Apple's customer service, etc. I didn't see anything erroneous in his information. To that information he added his personal opinion about Apple, his right, I think.
Your concern about the warranty is also appropriate. However, this is not an uncommon practice. For example, when Georgia passed Draconian real estate loan laws, many major lenders withdrew from the Georgia market. They simply no longer will do certain flavors of loans that they might do in other states. You might think that this makes the company evil but there is no law (yet) that forces a company to do business in a given state. Your complaint is with the Florida legislature, not Apple.
As for the DRM issue, Apple's DRM is what makes iTMS possible. There would be no iTMS at $.99 or any other prices per song were it not for Jobs' negotiating the DRM methodology Apple now uses. As Arthur said, it is a very lax DRM schema (much more so than I would have ever expected the labels to agree to - a testament to Steve Jobs' negotiating skills), and one that is easily the easiest to live with.
Short of going out and buying the original red book CD at $1.50 per song avg. I think the iTMS is the best bet going. So much so that I predict the eventual demise of the record companies altogether. More and more artists are going to go direct to iTMS since they don't need the capital any longer to record, market, press, and sell CDs.
Beeblebrox
everyone, support your local independant record shop... they really need the money, and its them, who support the small regional indie labels and bands. so stop whining about the drm crap and get your lazy ass out of the house and walk to the shop, spend the afternoon there, listen to some bands that you've never even heard of before or ask the employees to show you some new stuff you might like....
of course, if you just want to buy the latest metallica or britney spears album... then you can be a lazy sod and stay at home and get it online... but then, don't bitch about the drm!!!
58: 5. "Downside: Stuck with 128 kbps bitrate (unless burnt and ripped). "
It's still 128 kbps. If you burn it and rip it to a wav, you get no quality back. If you rip it and re-encode it to a 192 kbps file (or ANY lossy file) you WILL lose quality compared to the original.
"1. Downside: Long lines; backorder"
I personally have never waited in a long line to buy a CD. If you can't get off of your ass to go to a store or are too impatient to wait for a couple of people in front of you in the checkout you could always just buy from amazon or something. Best Buy (and I'm sure others) also has a system where you can pay for your items online and have them waiting for you when you get there. (Virtually) No lines.
Quote: "I wouldn't hate Apple as much if they wouldn't lock up everything like they do. Everyone says MS is in it for the money but they atleast pretend to give a damn about helping their customers. I've heard some pretty bad things about Apple's customer service (or lack thereof) and as far as i can tell, Apple is only in it for the profits and doesn't give a damn about their customers. They only care about selling more products.
Nick"
For the record, Apple is first and foremost, a hardware company. They make their software exclusive to their hardware, so that you have to buy their hardware. Call it stupid, greedy, a pain in the a**.... whatever. I call it smart. And it also doesn't hurt that their hardware is far superior to anything on the market, and are always the first to the market with the latest innovative technology. Why would they want to make their iTMS downloads compatible with other players? How would that benefit them? That would just be stupid on their part.
Also, of course Apple is in it for the money. So is MicroShaft. Why the hell would they be in business unless they wanted to make a profit. Neither companies would be as big as they are if their goal was to create useless products and go bankrupt doing so. But, where the two differ is that MicroShaft is out to make another billion dollars (usually with the mindset of let's get the product out to market, and we'll fix all of our f-ups later), and Apple is out to make a work of art (and a billion dollars on something that is functional, sexy, stable, user friendly....).
Bottom line, Apple is smart for making their software proprietary to their hardware, because if you could use Final Cut on a PC, why would you need to buy their hardware? Or iLife? Roughly a $100 application (haven't priced it in a while), why would you need to spend around $1500+ on their system if you could buy their software at dirt cheap prices and run it on a crappy Winblows system?
Why should I let apple lock me into buying because they "tell me" people don't wan't to rent, they wan't to buy. Nobody asked me but I will tell anyone.
I WAN'T TO RENT RENT RENT !!
I have bought 3 songs through digital downloading and I don't get anymore use or enjoyment out of them than renting.
P.S. Some people buy smokes at $10 bucks a pack a maybe 1 or two times a week. After xx amount of years they have nothing to show for it other than maybe lung cancer.
The amount of money I spend on renting is small and manageable. I get to freely download pretty much whatever I want and I won't be asked for a dollar a song. Every Tuesday new albums come out. Sometimes as many as 5 albums that I am wanting to hear. $50 - 60 bucks every Tuesday so I can listen to each album a couple of times and than toss them in the closet so to speak? DON'T think so.
I used to collect cassettes and where are they now? Probably in a landfill. I bought used cd's from a pawn shop and how often do I listen to them? Rarely ever.
I will support music subscriptions 100%
I will probably never buy another track in the foreseeable future unless some amazing thing happenned.
Why not have both options to satsify both the renter's and the buyer's?
There are lot's of way's of wasting $15 a month every month for the rest of your life and in the end having nothing to show for it.
When I collected cassettes I could never get enough because I was alway's running out of money. With "renting" it's ALL GOOD!
I have no intrest in audio grabbing xx amount of songs and than cancelling just because I could. When I pay a smalll and reasonable price for my music I enjoy the nusic more and I feel good about supporting musicians.
Renting gives me all the music I want when I want it old and new. I can keep up with music in way's I never could if owning was my only option. If you want to only buy and own fine, but don't think you speak for me.
FOR ME RENTING MAKES SENSE AND SAVES ME THOUSANDS OF DOLLARS!!