Labels hit back at Apple, now want share of iPod revenues
posted Sep 25th 2005 11:44AM
Apple and the major record labels have been cruising towards a confrontation over iTunes Music Store pricing for months now, and one label head, namely Warner Music Group CEO Edgar Bronfman is responding angrily to Stevie J's comments last week about "greedy" record labels. There's a perception that the labels (which these days don't exactly have a reputation for, um, generosity) want to raise the price of downloads across the board, but Bronfman says that flat-rate pricing is unfair and that, "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" (note that he doesn't say much about songs costing less than 99 cents). The problem, as Red Herring reports, is that the labels are used to people buying full albums — and in the process paying for songs they might not have wanted — while the iTunes Music Store lets consumers pay for only the songs they're interested in. Buying only the songs you want seems way more fair to consumers, but it hasn't exactly done much to keep the labels' revenues up. Bronfman's solution? Well, if Apple is "artificially" keeping the price of downloads low to promote sales of iPods (you can debate amongst yourselves whether 99 cents is artificially high or artificially low), then as he sees it, the labels should get to "share in those [iPod] revenue streams." We'll go out on a limb and predict they're never ever going to get a slice of the iPod, but we do have this funny feeling that things are going to get a lot uglier in the next few months.
[Thanks, CoreyTheGent]
In my view, the problem with raising the cost of a song over $.99 is that people will see that they're paying more per song than they would if they went out and bought the cd, so they'll just get fed up with the process in general and go back to downloading it for free. The nice thing about the iTunes store (as well as other pay-per-song or pay-per-month services) is that record companies are getting buyers that for the longest time didn't bother buying full cd's, and when the opportunity came along to legally get only what they wanted, they did it. I think this is a bad play by the music industry labels.
Well, what about the other stores? Are they going to raise their prices as well, or is it inevitable across the board except their contracts aren't close to expiring yet. I don't see how subscriptions like Yahoo's $5/month unlimited rakes in any money for the record people either.
I think the record people are crazy enough to pull out of iTunes just because they won't get their way, so I wouldn't be surprised if they raised the prices. I know Best Buy has new releases for LESS than the regular price of a CD, so as long as they do that it should be OK.
But again, I don't buy digital music -- I still prefer CDs. Let the drama continue, it doesn't bother me.
Fishes,
narco.
I seriously am amazed by how greedy they are. I just hope this doesn't damage the relationship between Apple and the labels so much that the iTMS has to close done.
I agree with #2, they are very lucky that money is being collected for these singles. Most people were downloading single songs for years. I'm sure no one is surprised with the record companies actions. They were going to be unhappy soon enough, just like a spoiled brat that gets everything.
Don't forget the fact that you are getting much less for your money if you buy a song online: DRM, lack of any physical media.
Greedy bastards. They should be down on their knees kissing Steve Jobs shoes. If it weren't for the iTMS millions would still be leeching their music off kazaa, edonkey or BT. The iTMS has created revenue where there was no revenue to begin with. Plus; companies like Warner better be careful; with the cash Apple has in the bank they could wake up one morning and buy Warner just for the fun of it.
It's greed. I think .99 a song for DRM music that's not even CD quality is too much. These guys are insane if they think raising the price will go well.
The record companies are getting way to greedy. If the world was smart, we would eliminate them. Too bad they can afford to fight a long grueling battle.
I want to see apple start making a discounted "Old Skool Band" section where people are free to post anything they produce and take the profits for themselves. It seems like paypal is starting a payment service for this sort of deal, but the internet greatly needs a unified interface.
Now imagine the revenue they could draw off their home-recording software and the good ole Mac. Integrate it all together and profit.
Profit is not a dirty word.
I agree with Steve Jobs. The record companies see a good thing and would like to (greedily) push the price as far as it can go. As to some songs being worth more than others, isn't popularity what would make a song "worth more" by record company standards? Wouldn't this issue work itself out by the number of downloads? The more worthy songs get downloaded more, thereby generating more revenue for all concerned. Perhaps the record company execs should think back to a few years ago when they were having trouble selling music.
fuck the itunes store....https://www.mp3search.ru is where its at
For comment #2
I can't quote numbers, but I think that iTMS has more market share than the other stores combined. I'd think that they are going after the largest chunk of the market first with iTMS. Once all things are settled with them, then the other music stores will more easily submit to their demands.
It's stupid for the record companies to raise prices at all. I've sat through many Lectures by Tony Fadell (essentially the inventor of the iPod and iTMS) and he's touched on this subject every single time. Apple has done numerous studies and $0.99 is the ideal price point. They have plenty of data that says if you go above this amount, even just a little above it, people will stop paying for music.
It becomes more and more clear that record companies HATE their customers. They literally want to milk people for everything they can get their hands on. I mean if you really care about your customer base don't sue many of them for thousands of dollars. Screw the RIAA and the MPAA. I'm a Mac faithful, but I have a windows machine with 500 GB specifically for downloading stuff and Edgar just made me decide it's time to take it out of retirement.
I doubt Apple will do anything. Jobs knows that if the record companies pull iTunes off their list, people will go back to downloading. I don't want to pay a monthly fee for a service AND pay for a song. Thats stupid. iTunes is the only real reasonable music download solution that people are willing to fall for.
As far as I'm concerned, iTunes is invincible to the record companies, and I don't think they will do much to make Jobs change his mind. Record companies ARE greedy, no matter how you put it. They drive bands into the dirt. They help them out in now way, other than getting their CD out there, and take a HUGE chunk of profit for themselves.
I definitely think the funniest part of all this is how the record companies are basically acknowledging that a lot of the "product" they sell is not something the consumers would buy, if given a choice. That is, many consumers have no interest in buying a full album when all they want is one song out of it. I am baffled by this being a surprise though; wasn't the singles market really set up for the same purpose? People would buy a single rather than a full album?
Either way, I've noticed on iTMS that there are some albums where you can't purchase the individual songs; they are only available if you buy the whole album. So what the heck are they complaining about? It seems like the mechanism is already there to force the consumer to buy the whole album rather than individual songs if that's what they want.
Interestingly, the record industry in France has been able to get a major slice of the iPod Nano revenues. While the iPod Nano is sold for about 249 in Germany, it is sold for about 319 in France: 50 net go to a pool of funds which gets redistributed back to the record industry. Total nonsense to me but this is the way it is - amazing!!
I believe Edgar Bronfman is right
They should share in the revenues of the ipod because music is the lifeblood of Apples cash cow
I dont know how many of you are creative people , but imagine what you've created being lowballed from $10.00 to .75 cents (which is what Apple pays labels for a song)
Better Yet , imagine your job firing you because they have found someone in india to do it for 1/3 the price
They're complaining about free revenue that without help from companies like Apple/Yahoo/Naptser/Creative/Sony/etc wouldn't exist. This baffles my mind.
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engadget@ranjit.endjunk.com
'Creative people' are being screwed by the record industry, not the consumer.
Among other things, the pop music business is suffering from the same thing the movie industry is, their product sucks.
So now we see the true colors of the record labels. MO MONEY!
Fortunately, filesharing is bigger than ever. Good luck nailing everyone, RIAA. I forsee the death of the reproduced media, with everything being free or almost free (subscriptions) available online through cars and connected portable players.
The days of the grossly overpriced music media (record, tape, CD) are almost over.
So.. how would this wrought work in countries like Australia, where Apple have been selling just as many iPods as anywhere else (no, I can't support that - but it's best not to get distracted from my point) and yet there's no iTunes Music Store here (yet)?
Also, the iPods can be used as storage devices, does that mean that software companies deserve a slice of the iPod Profits?
If this (ill)logic is to be supported at all then surely car manufacturers deserve a slice of the profits from pay garages, parking metres and toll ways?
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Just to say to Diggiti, the record labels make profit on the cd's sold and things like that, the artists make their revenue with concerts endorsements and the such. the artists are not being lowballed.
It's just the fact that the record companies are becoming greedier because iTMS has been creating revenue where there wasn't any to begin with. There should be action taken against these record labels for putting out low quality music (not the files, the actual music) because it does not give the buyer much incentive to purchase at all.
Maybe consumers would buy more than a single song if the record labels released product that had more than one or two good songs. As usual the labels are pointing the fingers at someone else for their own problem.
During the 70s, 80s, and 90s when other new audio formats came into existence did the labels ask to share in the profit of turntables, tape decks, cd players?
They are really freaked now because as iTunes continues to grow it becomes more clear that there may be no need for a lablel in the near future. What would stop Apple from starting their own record label and signing their own bands?
The labels created this mess by being so greedy and delivering poor product. I personally think it is too late for them to turn it around and they will slowly die away to the point where there may be only one or two labels remaining.
The lable are what is distroying the music instudy today. They have smoe nerve of asking for a share of Ipod revunes. Jobs should give them all the Ifinger.
#6, Millions of people are still using those services to get the music they want.
The record companies are in a strong position here. If they stop supporting Apple then iTMS could dry up. Will that ever happen? Who knows, but Steve Jobs going on record and calling the people that supply him his 'inventory' greedy is pretty stupid in my book.
Labels Made Deal With Devil
In essence, the major record labels are merely a distribution system. They have nothing to do with the creative process, and typically hinder that process as they strongarm artists.
The Internet and services like iTMS are the new world of distribution. As an artist, you no longer need physical media, or physical stores, to sell your music. You can rent time at an independent digital studio, or set one up yourself with - yep, Apple products - for a relatively minor investment. Then you can go straight online with your new tracks.
Traditional labels and distributors are dinosaurs and the ice age is upon them. These last pushes to control distibution are their death throes. You expected dinosaurs to go quietly?
The future is like this: Artists contract directly with iTMS and other Internet music providers to offer and promote new music. Artists learn that to make real $$$, they need to tour and do live shows. They will finally recognize that e-music sales are going to serve them best as low-cost advertising for their live shows.
If you're an artist who's not good enough to sell out live shows, don't expect to get rich.
If you're a fat label executive who adds nothing to the process except to suck profits from artists while gouging consumers, you might want to make a career move while you still can. The Internet facilitates the relationship between artist and consumer now, rendering you useless. Party's over.
Imagine a world where a recording artist could upload their song directly to iTunes (no RIAA middlemen whatsoever) and make the full .75 per song themselves. That's what Apple should do if the music industry tries to hike prices--just have direct relationships with the artists themselves. I bet many national acts would jump onboard as soon as their indentured servitude--er, I mean "contracts" are up. Steve stood up against Disney until they started to cave, so I don't see him giving in to the RIAA.
And this is why I don't buy music =-)
I get it from friends who buy it for me... or i'll get it through more nefarious means ;-)
I would love to support an iTunes branded record label. Vertical integration baby! I hope Steve starts a war with the record labels and puts them out of business.
There are two things in life that are essential. Food and Water.
Everything else are none essentials. This includes CD's etc.
Perhaps Mr Bronfman might change his views if everyone started a viral boycott of Warner Music for the next 3 months. Tell 10 friends not to buy any music from Warner and then they do the same etc. etc.
Whats the betting that by the end of the three months Mr Bronfman agrees that perhaps 99c per track from ITunes is a good idea, that is if he still has a job left after the plummetting revenues.
I often wonder what color the sky is in Mr. Bronfmans world. How could the journalist at Red Herring possibly let him get away with pretending to be concerned about consumers. Let's look at the track record...
In 1986 a company called Personics was formed with the idea of letting consumers buy individual songs, which were made on a custom tape in the retail store while you wait. Personics had licences from all six major music labels, but as soon as it became clear that consumers far prefered this model (sales reached $12M a month with systems in just a few hundred retail stores), the music labels unilaterally pulled their licenses and Warner Bro's purchased Personics and pulled it out of all stores (now called Warner Customer Music).
In 1992 Blockbuster Entertainment launched a new venture to digital distribute music and manufacture CD's in the store, called NewLeaf Entertainment. Music labels began by insisting that only full CD's and not songs be sold through they systems, and they also insisted that they be allowed to make more profit in the digital distribution model than they did in the physical model, and oh by the way, they owned or had major investments in the CD pressing plants and ditribution companies, so they in essence insisted that consumers pay enough for CD's to reward music labels for delivery trucks that were no longer nessesary. Blockbuster offered to let the big six invest in NewLeaf, but the labels prefered to delay digital distribution as long as possible.
When cassette tapes first were introduced, Music Labels sued to keep them off the market since they feared they would be used to steal their product. Ultimately they forced the industry to pay them a tax on blank tapes to compensate them for the fact that consumers might steal their product in the future.
When SonicBlue launched the MP3 player, the RIAA was back in court to again stop consumers from getting this new evil technology.
When the industry moved from cassettes to CD's and from Long Boxes to Jewell boxes the music labels manufacturing costs when down dramatically but prices went up (even adjusting for inflation).
Large numbers of former music label employees have admited to corruption and briberly related to dominating radio play to limit consumer choice. Representatives of the music industry were well known to systematically bribe retail stores that reported sales data to Billboard (prior to Soundsound computer generated sales data) to falsely report consumer preferences.
In 2002 the major music labels represented by the RIAA admitted to illegally manipulating prices in violation anti-trust laws and agreed to settle for $140M in cash and product.
Mr Bronfman's employer WEA has been involved in every one of the above efforts to use political and in many cases illegal means to maximize profits by manipulating the free market system. For him to now claim that the free market ought to decide what fair prices are is completely obsurd.
If he doesn't like the price Apple is willing to pay for his product, his recourse is to stop selling Apple his product. Of course the US has about 80% of the music stores it did in 2000, and the largest existing music retailers (Wal-Mart and Best Buy) are already implimented plans to reduce the amount of space they dedicate to this declining product category. So Warner may find there isn't a healthy distribution channel that does want to buy it's product at their price.
This guy is a douche and doesn't know what he's talking about. Bronfman has the business sense of a baboon. His family owns the Seagram's brand and when he inherited it he sold its 9 billion dollars stake in dupont ( its most profitable investment) to buy Universal. This one of his many business blunderings.
At least he isn't going to become president anytime soon.
The comments here are amazing to me. What ever happened to free enterprise? If the labels want to be 'greedy' then let them be greedy. Is Apple making billions off of the ipod? How come no one bitches that the Ipod has huge margins on it? I love my ipod(s) but Apple is making a killing on this thing.
Greed is good because it will ultimately expose the weaknesses of the music business and then cause them to get fixed.
#28, labels are not distribution companies, they are A&R companies. Publishing companies handle distribution.
Apple does not negotiate the retail price of music with the labels. That's illegal. What Apple negotiates is the margin that the labels get. Apple is then free to charge whatever they want for the music. They could give the music away for free if they wanted to but the labels would still get the same royalty from Apple. No one bitches when Pepsi gives away music for free.
IMHO Apple should go to a variable pricing model and convince the labels to do so as well. That means that deep catalog prices will fall dramatically and newer tunes would probably start out priced higher then $.99 but those prices would also fall as the songs move from mainstream commercial to back catalog. Search Wired.com for "long tail theory".
Ultimately we'll be paying pennies per song anyway as music moves to a direct to consumer model via services like myspace.com as artists start to bypass the labels and market directly.
The woes of the music business were not caused by p2p networks but rather the huge distribution deals music publishers did with the best buys and wal marts of the world that caused their margins to fall dramatically without an increase in volume as the big box retailers for the most part do not sell back catalog anymore. Labels/publishers know this but there is nothing they can do about it so they sue the p2p networks instead of firing themselves for stupidity.
At the end of the day it's not the label that gets screwed it's the artist. The artist makes the (wrong) assumption that the label knows more about protecting their income and marketing their music than they themselves do. In the meantime the labels have managed to completely eliminate the back catalog from most high street retailers shelves. Nice.
I believe that the labels are doomed for the simple reason that services like myspace.com allow every artist to promote their own music more efficiently than itunes or any record label could. The upshot is that these 'indie labels' will sell music for pennies and without drm encoding (most of them don't even know what drm is). At this point itunes won't matter anymore and will probably become a music promotions site just like myspace. Think about it; a billion people buying a song that has caught on like wildfire for $.05 via myspace or via their car radio or via sms on their cell phone. That's the future of music.
The future of music looks bright to me because it won't be run by Apple or record labels/publishers but rather by artists and indie labels who have the real passion. That is the power of the Internet.
#6 "They should be down on their knees kissing Steve Jobs shoes."
My sentiments exactly.
Did the cassette deck or cd player manufacturers give the record companies a slice of their revenue stream? This is more nonsense from greedy labels. Jobs is in a position to be a martyr for all music fans if he plays his cards right. Start your own label, Stevie J!! You have major distribution, international recognition, and sweet hardware with a huge market share to deliver it to. Who needs these huge labels calling all of the shots? Most major label music is demographed, canned, unsoulful garbage not worth buying. Take the high road, here, and offer musicians an alternative. No one seems to give a shit what they think on this matter anyway.
I agree with #27, artists going directly to the iTMS. Selling there songs online. Live shows and what not. But to do extravagent live shows you need a lot of money. That money is fronted by labels. As well as the money for recording sessions. That is a lot of dough to come up with. That is why most artists never make it. So if apple is willing to take these artists and fund them, so be it. But if the cash driven artists(pop, rap, and some more) see less profit they will stick with the label.
As far as quality of music is concerned, this is completely subjective. I don't listen to the mainstream crap, which is what they would consider to "be worth more", so if they want to raise prices fine. I won't be hurt.
Should prices be raised. No. I think we should see a separation. On one side, Big Record Labels and their cash hungry, no talent arists. And the other, Apple/Napster/Yahoo and artsist that put out quality music because they love doing it and if they make some cash(which they will) awesome. Then it wont be a battle, we can let the masses pay big bucks for britney, kayne, ashely suckson i mean simpson.
Sure, if ITunes music store is canceled, the Record companies will not get their free $$$ and also, more people will be file sharing. Lose lose if the record companies take down ITMS.
It seems everyone here has missed the brilliant idea of the music biz to get a cut of an electronic device (iPod) because selling iPods depends on music. Wow I love this logic. The book sellers apparently should get a cut of the printing biz. Oh how about the oil biz getting a cut of the auto sales? Huh? Maybe all the sound hardware manufacturers (mp3, cd, tape, vinyl, radio, etc.) should get a cut of the music biz. After all without them the music is meaningless.
Bronfman is a poster boy for the utterly bankrupt music industry's bizness model and the irrationale that keeps them from moving forward. Like much of the old technology in the US (think telecoms) they are so busy protecting their old bizness with the help of the government that the world is passing them by.
What planet are these guys from? I do not know of any other business (except for movies) where they treat their customers with such contempt. Either they are trying to gouge them with crazy prices or they assume that the customers are all pirates. Do they not realize that the market has spoken regarding music prices? The sooner all artists start listing their own music on the commercial download sites without the involment of the recording industry, the better.
The record labels are becoming increasingly aware that they add little to no value to the music industry; no wonder they're worried. If Mr. Bronfman is so concerned for artists' wellfare he could resign and donate his salary to the revenue stream. Would anybody notice he's gone?
I make my hop-hop song parodies available on MySpace - and I can easily see how a justified effort from artists could lead to some real benefits in terms of targeting the right fan base, promoting upcoming events, and even kicking off a serious word-of-mouth campaign through the power of these giant social networks.
All it would take is for one company (perhaps Apple) to make music promotion and distribution the sole function of a slick new social networking system (bring it on, Web 2.0) - and artists would be on their way to driving a fruitful music career - independent of greedy labels.
I agree with nial. If I can buy the physical CD for $13 or so, the downloaded, DRMed album better be about $5.
In a perverse sort of way - I understand big labels wanting more money. After all - much of the popular music out there is more to the credit of the record industry than the "artists" themselves. Remember, this is an industry that regularly creates stars out of individuals with pretty faces, sex appeal, and no artistic talent what-so-ever. (ie. Brittney Spears, Justin Timberlake, Jessica Simpson. . .the list goes on and on and on.)
Here, the "art" in "artist" is credited to the cast of thousands behind-the-scenes. Promoters and song writers and talent coaches and image consultants and photographers and video producers. . . these are just some of the people that make a non-talent look like a super-star. It's a magician's act - and it costs money. It's an investment intended to earmark huge returns - and it traditionally does.
That said, it's fantastic that the current model is threatening the labels' ability to fund the creation of fake "artists". Apparently finding the real thing takes too much effort. Fortunately we now have a new model where labels are no longer needed to discover talent. We can do it ourselves.
I don't think raising the price is a good idea, but before they even consider it, they should raise the quality first...
I have bought some stuff from iTunes, and I am not at all impressed with the sound quality.
Is this guy Bronfman kidding?
When did the music industry ever get a cut of Pioneer's turntable profits, Teac's cassette deck dollars, or JVC's CD player revenues? Suddenly it isn't enough to make a profit off of their own product, now they need to make money from every device that plays music. Jobs was too kind calling these guys greedy. They are down right ravenously gluttonous.
I think I read the Labels were getting $0.79 of the $0.99 that iTunes charges. This is a product with no physical being that needs no labeling, packaging, delivering, or even advertising (Apple does it all for them). This is $0.79 of pure profit for the labels.
It is probably a good thing I read Mr. Bronfman's comments because heard live it most likely sounded like grunting and oinking.
The Record Industry is Obsolete. They just don't know it yet. Let the artists bring their art directly to the masses, via ITMS or whatever other channel the internet can and will provide. Let the proceeds from the sale of the song accrue mostly to the artist, which is the way it should be.
Some of you people get it. Some do not.
The record companies controlled the means of distribution for decades. Doing so, they also controlled what content the artist could release, which is important, because it they can't control the content, they have a hard time controlling the package--the artist's image:
Wilco's record co. refused to release Yankee Hotel Foxtrot (the band's most critically acclaimed album) because they thought it was too weird and wouldn't sell. The band actually had to buy their artwork (the recordings) back from the label and release it themselves to get it out there.
Fiona Apple had her album finished, and Sony didn't hear a hit. Never mind that Apple is a multi-Grammy winner, multi-platinum selling artist, and is considered one of the brightest young talents in the songwriting business. Fiona Apple had to sit on the album for a year, and go so far as to threaten Sony that she would never record again:
"I didn't want to be in a position where they owned one more thing that I love and then refused to put out. Or even worse, they might tell me how to change something, and not once in my career have I let that happen." One day, she got up her courage, sat down on the steps outside her house and called her manager. "Tell them I'm not going to record anymore," she said. "And don't call me back and ask me if I'm sure, because I know this is the right thing to do." -- Fiona Apple
Now, Sony has agreed to release the album, but only after Fiona Apple succumbed to their demands to re-record it, changing the sound that Fiona obviously first envisioned. So much for letting artists make the art.
Can you imagine if Leonardo DaVinci was told that he had to re-paint the Mona Lisa because his paint distributor didn't dig that weird smile so much?
The real fear is that Apple becomes someone the artists can go to directly, and the record companies lose their power to control the artist's work and the artist's image. That is why the record companies are now so troubled.
This "problem" is all created by the record companies anyway.
All they have to do is control themselves. Don't sell the new, hot singles on iTunes.
Just Wait. Problem solved.
The record companies really want that iTunes money *now* though, and since they really are greedy, they don't want to wait to sell the hot tunes.
And that's Apple's advantage. And Jobs is smart enough to know it.
The record companies also know deep down inside that most of their hot singles aren't worth a damn when the "heat" and media attention wears off, so if they do wait to sell them on iTunes, they won't sell as many anyway.
These aren't "timeless" classics for the most part. Most of these "hot" pop tunes are crap. If the record companies wait a year to release a "hot" tune like Jessica Simpson's "These Boots are Made For Walkin,'" very few suckers are going to buy it. Most music fans will go back to Nancy Sinatra's classic version of that song after the heat and promotion wears off.
Jobs is smart enough to know this, too.
What most people don't realize is the music business is a money loser for 99% (it might be 98 or 97) of all artists. The record companies give the artists a lot of money up front and try to recoup that money after the product is finished. Most of the time they don't make a penny.
On ther other hand, the very few albums that sell 500,000 or more copies (it might be 300,000 or 600,000 but you get the point)generate 100% of the profits.
Now you have iTMS cutting those profits because instead of buying a whole album, the customer buys one or two songs off that album (rarely the whole album).
The record companies would be much better off selling hits for 2 or 3$.
I admit the consumers would not.
Steve Jobs can just kiss his little white ass goodbye now. Why can't this dude just keep his mouth shut?? He may as well just close the doors now. He's screwed!
The record Companies arn't used to trying to bully around a company as large as Apple. Normally, they just go after grandmothers and young children.
Bronfman is a Canadian. The Bronfman family made their money selling whiskey across the border to Al Capone and other mafia wise guys during prohibition. If Steve Jobs doesn't watch himself he may wake up some morning with a horse's head in his bed.
The labels are going to screw with the prices, trying to make Apple's stranglehold on pay per download digital music weaker. Apple should drop any label that tries to extort more money from music lovers and just keep those that play fairly as well as all the independent labels they now carry. They should also make it easier for individual artists to join up.
Screw the money grubbing record label bastards. I hope all of their customers revert to the P2P networks.
There's never been any doubt about how greedy the industry is. The words "industry" and "greed" should become synonymous. Mr. Bronfman's claims that some songs should be more than $.99 seem rather arrogant; who would determine who's songs are worth more? What criteria would there be besides personal preference? If overall length is the criteria, then intros that last 15 seconds should be reduced to about $.05 or free. They're just not going to be happy until the internet is completely shut down, which will not happen any time soon.
In my view, the problem with raising the cost of a song over $.99 is that people will see that they're paying more per song than they would if they went out and bought the cd, so they'll just get fed up with the process in general and go back to downloading it for free. The nice thing about the iTunes store (as well as other pay-per-song or pay-per-month services) is that record companies are getting buyers that for the longest time didn't bother buying full cd's, and when the opportunity came along to legally get only what they wanted, they did it. I think this is a bad play by the music industry labels.
Fine. I guess the Label companies have not learned a lesson yet. People start purchasing and before you know it they want to raise the prices. This will happen more than once. Kazaa Lite K ++ anyone ?
What will happen with in one year, is that you will see many of the music artist going away from music label, because they don't want to see the label get even more money, that they don't see. What will happen most of the artist by late 2006 will start going with an independent label, or sell their music in different ways like whats going on with podcast everyone is doing their own thing. The record companies have been in charge of everything that has happened with music today, and now is when everything changes, the artist are going to take back what their deserve. And will work with iTunes to get their songs out there for $0.99 a song.
2006 will be R.I.P for the record companies, if you work for a record company say good bye. And people like Edgar Bronfman, your LIFE IS ABOUT TO CHANGE !!!!!!
" APPLE COMPUTER FOR LIFE "
First charge a lower price. Second, make it higher bitrate or Apple Lossless. Third, market it and it happens. Problem is that record companies won't let them lower the price. To get them to go this path, we have to buy used CDs to rip and sell, unless it just came out. Then, a few people will buy it, then we'll rip and sell. Then the labels get even less money, because then we don't buy fresh copies, and they get $0.75 per song from iTunes. That should teach them that when they higher the price, they get like a turkish lira, and if the lower the price, they get like a googolplex(1 with googol(1 with 100 zeros after it) zeros after it) euros.
The interesting thing is that more and more "high-end" artists hire their own producers and such and use their own home studios to make music. the fact is that we no longer require record companies to "make" records! This means that shortly artists may choose to sell directly to Apple and collect the 0,69$ for themselves (see what is starting in Japan with iTunes). Many forget that Apple absorbs pretty much ALL the costs of distributing online music (credit cards, servers, comm lines, billing transactions...) The record company simply delivers the "files" which they must do for Disc production anyway and Apple does the rest. No risk of pressing too much stock or too little. Think how much less risk that is for the record company! And they complain... As for Mr. Bronfman, well as a Montrealer let's just say I am not overly impressed by how well he has managed the family's empire (Seagrams).
LASTLY ... PLEASE DO NOT EQUATE RECORD COMPANY WITH ARTISTS.
1. 99 cents for an iTunes is more than a generous price because you're getting pretty crappy sound quality. Play an iTunes song (128AAC) on a good quality home audio system and then play the CD version of the same song. No contest. If you're only going to be listening on a portable sound system (iPod or equivalent) or if you're only going to be listening in your car, 128AAC is probably OK.
If you're interested in a complete CD, you can almost always find it used, in very good to excellent condition, on Amazon, for less than the cost of downloading it on iTunes--and you're getting much better sound quality.
2. 95 of 100 audio CD's have some pretty lousy songs on them. The labels are pissed off because then can't cheat consumers if consumers can download only the songs they want. Cry me a river!
3. A few songs, for a brief period of time, may in fact be worth more than 99 cents...but the flip side of that argument is that many, many songs are worth much less than 99 cents. There are some on the iTunes music store that should be given away.
4. Case in point: I'm a 50 year-old guy who still likes 70's and 80's classic rock when driving. I mostly listen to smooth jazz at home. Anyway, I wanted to add 3 Deep Purple CDs to my collection. 128AAC was OK because I would only be listing in my car. On iTunes, each would have cost $10. I was able to buy all three for roughly $20 total (including shipping) by buying used via Amazon. What does that tell you about whether $1 a song on iTunes is really worth it.
The majority of you people have no idea what you are talking about (#35 excluded), and have no perception of how the music industry works at all.
@Bruce(52)
Maybe record labels have trouble making money on an artist because of all the overhead they have, like your salary for example?
I have an idea. How about 99 cents from some songs and less for others? Yeah. Anything less is unacceptable and would drive me away from their service completely. How is that for revenues? MP3's aren't like gas, where if you need it you have to pay what they are charging. I would not encourage anyone to stay with iTunes if they raise prices (if fact, I would encourage them not to!), and I sure as hell won't stay myself.
...I also think it's about time for Bronfman to take a pay cut. Yup.
"IMHO Apple should go to a variable pricing model and convince the labels to do so as well. That means that deep catalog prices will fall dramatically and newer tunes would probably start out priced higher then $.99 but those prices would also fall as the songs move from mainstream commercial to back catalog. Search Wired.com for "long tail theory"."
Your opinion isn't more valid just because you throw in the word theory. the problem here is WHY? The consumer certainly shouldn't want this. The WHY here is "to make more money, just because we can". A song is eternally the same song. To charge more for the same exact product, which is esentially infinte in supply, just because you can, is to GOUGE the customer, which is greed. This is really simple.
Does Bronffman request cut of all CD player sales? So why is he asking about iPod? Or for that matter, how about cut of all sales on PC and Mac's, since they all have ability to run iTunes on them.
The odd part of him logic is that, iTunes cost them nothing... Unless Apple requires the Record company to pay more for putting the "Hit or Exclusive" track in iTunes... Which I don't think Apple is doing.
The record company can't say iTunes is eating into sales of CD's. Even if that is true, putting songs on iTunes cost them much less money. There are no cost of producing CD's and the materials. it's a one time deal for them. So how could they be bitching about "songs are not the same" value... Digital files are same. The logic behind their bitching is astronomically ridicules.
Hit single cost just as much and track 11 on iTunes and why should that matter to anyone?!?!?
The whole iTunes model has chnaged the balance of power when it comes to buying music. In the past, it has always been the Record company holding all the power and the music stores selling the music were always a comodity. Then iTunes Store came along. Because it is the biggest in the market, the music store is no longer the comodity. The problem for the record companies is that they are no longer in full control. I wouldn't be surprised if they do try and twist apples arm, just so that they can once again make the music store the comodity just so they can rake in more profits.
they want a cut of ipod revenue too? i wonder, do the record companies get a cut of the sales of every record, tape, or cd player? what about radios? what about the cd drive inside of a computer? those can play music cd's just fine. should they get a cut from every cd-rom equiped computer as well? how about dvd players?
if apple was able to sell a lossless format from the labels I would pay more for it. lossy music does not sound that great on my home system.
I would sell my archos to buy some model of an ipod.
I would be great if Apple could work straight with artists and just cut the record industry out. Were it not for an unfortunate choice of a company name perhaps it would be so....
http://en.wikipedia.org/wiki/Apple_Records
HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH
Stupid Record Companies....when will they ever learn. I find it hilarious that they want in on the ipod sales. And why is it only itunes they're after? What about Napster and yahoo with there monthly fee for unlimited downloads. Is that not good enough for them as well?
If I pay 99 cents today, will I have the music five years from now? Do you have any files from ten years ago? This is clearly a temporary, limited use (DRM'd) product. For me, 99 cents per track ($10 per album) is to high by a factor of ten.
At $10 per album, I am unlikely to by any. At one dollar, I would probably buy many per month.
Good point about the longevity of a file. But the $1/per song for me is reasonable. I'll not buy an album just to get 2 songs (been there) but I will pay for a song or two. So I'll pay $2 - take it or leave it...
The same fight, over and over and...
Player pianos were going to stop people from learning to play.
Records were going to kill live performances.
Movies were going to kill theater.
Radio was going to kill the record industry.
Television was going to kill movies and radio.
Cassettes (and DAT) were going to kill the record industry.
Video players were going to kill movie theaters, video recorders (and cameras) were going to kill the movie industry - and the ad business.
CD recorders were going to kill the music industry.
DVD players were going to kill movie theaters, and DVD recorders (and cam-corders) were going to kill off the rest of the movie industry.
------
Now, some of these things have become moribund if not dead. You can still buy sheet music, but even in upper-middle-class homes it is no longer common for the family to sit down with/at instruments and play selections from Broadway. Live theater is no longer so common as to provide a training ground for acting. Live music is back to the lone bard or quartet, not the big band or local symphony.
Heck, you can still buy buggy whips, and the buggies too. But how many of us know someone with a one-horse shay?
RIAA and MPAA need to find a way to adjust - darned if I know how - but are trying to adjust us instead, which is at best a stop-gap. There will be a market for entertainment as long as there are people: if current industries cannot figure it out, someone else will.
I haven't bought a CD in about 6 years, $15 to $20 for a couple of songs is too much. Since getting my iPod about 18 months ago, I have spent about $2000, got the songs I want. At a $1.20, I'm going to slow my purchases, at $1.50, I'll be done buying music for a while again. The music industry has bitched and bitched about piracy, and when someone, (Apple), comes up with a good idea, then they want to see how much they can rob from them. I have a news flash for the music industry, I can get along without you, can you get along without me?
#35, indie labels selling their songs for 5 cents each? How will they pay for their bandwidth? Amateurs talk strategy, the pros talk logistics, or something like that.
Cut the middle man !!
Let Apple interface DIRECTLY with the artist.
That way $0.99 can be split ONLY between Apple and the singer.
Now, How do you like THAT, Mr. Greedy Record Company??
#60 I don't work for a record company.
But most of the people on this forum are typical Apple fanboys who don't understand simple reality. Apple sells "product" owned by someone else. Apple has taught the owners of the "product" how to make money off of music downloads:
Proprietary DRM that works best on your own hardware.
It was pretty dumb of Jobs not to get a longer deal.
Now all the record companies have to do is sell their product to someone who will give them a cut of the profits on hardware sales.
If I was Bill Gates, I'd already have a billion dollar cheque made out to the record companies signed and dated the day Apples deal ends for an exclusive 10 year deal that includes a cut of all hardware licensed for WMV 10 or 11
#73. You honestly think the music industry is gonna give up their BIGGEST source of income these day to some shit company that is clueless from hardware to software? This is no fanboy genius. Apple gave the music industry a life line...Apple SAVED them. Now that they have a little money, they go back to their old ways. They do that, its the END of the music industry as you will ever know. The day industries like the music and other media outlets got a gun pointed to their heads was when the internet was born.
So get real, and enough with your horse-ass comments.
If you were Bill Gates, you'd be in court as he is getting your ass whipped and begging your shareholders to stop selling that shit stock.
The music today should have gotten cheeper because of the cost of technology. So I will never pay 99 cents a song for one they have lost their minds. They want their pockets to continue to fill they suck!
http://www.allofmp3.com
i wonder if any record execs bother to look online and see that 90 percent of the online community thinks they're all fucking pig dogs. Greedy pieces of shit. ...and they think raising the prices of online songs is ever going to fly? i'll never pay over 99 cents for a song unless it's fantastic quality, 5.1 surround or higher, etc. More than 99c = straight back to pirating for a huge amount of people.
They need to get the idea out of their heads that they should make $12 off of 2 good songs. that's a dated business model and just wont work with consumers anymore. "padding" songs to fill an album with crap but force people to buy it... we've had a taste of relative market freedom. do you think we'll go back? fuck you.
If i knew where that Bronfman fucker lived, i'd sneak into his house at night and take a shit in his mouth. ...like his reputation for being a douche isn't already prevalent. what a cock holster.
#35 RS said
"The majority of you people have no idea what you are talking about (#35 excluded), and have no perception of how the music industry works at all."
Hey RS who cares? I am the customer, and regardless of what barfman wants, he has to play by my terms or I won't put out the $$$ If the Music Industry B@$t@rd$ want variable pricing that starts at say .99 for a real hot popular today even as we speak hit, followed by maybe .79 for a song that was so last month, and finish off with .59 for a golden moldy, thats something I would buy in a minute. OH, wait, I already am! Only its .99 whether its a moldy or a hottie. OK, fine.
What Barfman won't say is that stuff will start at .99 for the trash that no one will listen to, much less buy, and go up from there. Where do I get my info? well, read the whole interview. He says that the most popular digital down load is the ring tone, accounting for 60% of all downloads, and they are priced starting at $3
Follow that to it (warped) logical conclusion, and he wants us to pay a MINIMUM of $3 per song. Worse, what happens when we get variable pricing? Then the record labels will demand variable rights. We will not be able to burn our shiny new $3 song, or put it on a portable player.
I may not know the music industry and how it works, but I know what I will and will not pay for a downloadable song. I will pay .99, I will not pay more. In fact, if music goes past .99 I'll go to allofmp3.com and labels and barfman can go to 7734
#74 BIGGEST?
Please. Get real. iTMS probably costs the record companies more in album sales than they make in revenue.
Warner Music: Digital Revenue is 6% of revenue for quarter ending June 30, 2005
http://investors.wmg.com/phoenix.zhtml?c=182480&p=irol-newsArticle&ID=739499&highlight=revenue
Look, you Apple fanboys have taught the big record companies an important lesson. Suckers will pay a buck for crappy DRM laden songs. Now they will push Apple aside and try for more.
The CD allowed them to ripoff consumers for billions for price fixing. Now they'll do it again.
If you idiots had not bought any crappy AAC songs for 99cents you might have made them reform.
Now you just taught them that you people are suckers all over again.
"At $10 per album, I am unlikely to by any. At one dollar, I would probably buy many per month."
But would you buy at least 10 times as many? If not they're never going to do it. The industry is a bunch of greedy bastards and they only look at the bottom line. They will never lower the price unless they expect to make it up in volume so their profits will stay the same.
OK I'm not reading all of them, but halfway through no one even pointed out that .99 is even pretty high as it is. They don't have to print or package, stor or distribute millions of copies of a release.
That's a huge investment in infrastructure they are easily avoided. I am sure that the computer hardware etc is expensive, but effectivly this is what the film indusrty is poised to do. Instead of shipping porcessed film to a theatre, the digital "prints" are sent in hard drives.
What's cheaper than copying files?
Just when I had convinced my grandson to stop stealing tunes too! Now he'll probably stop buying from iTunes. Well, well, Mr. Dorkman, I guess you'll never get any more of his money.
iTunes downloads are not worth more than 99 cents. If you download the average 10 - 12 songs that make up an album, you're paying close to the price you would had you purchased the CD from a discounter. Also, with the CD, you get full quality CD digital sound, which you can then encode to MP3 or AAC at the bit quality you choose (128, 160, lossless, etc). iTunes downloads are only available in 128 format.
If the record companies want to make more money, they should offer something different. They could charge more for a lossless format download for the people who don't want to sacrifice any sound quality. They could offer downloads that include music videos (in addition to the regular 128 music only download.
I refuse to pay more than 99 cents for a 128 compressed music download. Seeing as how no production is involved (cd, cd case, lyrics and photo sheet, theft-proof shrink wrapping and shipping costs), iTunes downloads should never have cost 99 cents in the first place. 75 cents is more like it. However, the 99 cents price is reasonable when you factor in the iTunes/iPod experience of seemlessly purchasing a song, having it downloaded and synched onto your iPod. Nothing else matches that experience. Apple enables that experience, not music companies.
The reason labels are mad, is because now people dont have to buy the full cd for a half rate artist who has a hit. perhaps warner and the other majors should put more effort into signing bands that dont suck, and that would provide more than one "hit" record off one catchy pop song.
I think the comments about record labels should be scared of iTunes Music Store cutting them out as middlemen are right on. You guys get "it" but the labels don't.
Apple owns the single most powerful entity for marketing music to the "hipster" generation, namely, iTunes Music Store! If Apple were to sign up artists directly, iTunes Music Store is the ideal place to promote them, through charts, playlists and Podcasts. These artists won't need any labels to market them. (Yeah, payola is history)
I don't know if anyone will have the stamina to get to this post but I'm probrably echoing what everyone else is saying and that is if the record companies push it, you know, try any shit, they'll end up back to where people don't pay for music.
This is a good examample of how conglomerates shoot themselves in the foot as a product of their own avarice. I do not condone Piracy but I can't help but but hope that piracy grows atleast 300% as a consequence of their actions just so they can have something to cry and bitch about.
Those RIAA guys need to freakin relax. Dont some of these people have family or kids that carry around an IPOD or another mp3 player.
They are not making life easier or funner for anyone, and their constant nagging over digital rights, sales, pricing, and distribution is starting to get on my nerves. What gives them the right to affect so many people?
I dont get it anymore. can someone in plain simple language explain it to me? please.
If the record companies keep up their already failed strategy I think we can expect Steve Jobs to go into the music business. He can certainly contract with musicians to record on the Apple label. In this age who needs record companies.
In 5 years no one will be buying CD's
Record lables are very greedy, and they miss not having the same cash flow before the age of file swaping.
But lets face it, Apple and a few other music stores are keeping these guys off the streets. I'd like them to just see what happens when they think they can call the shots.
-Bill
Record lables are very greedy, and they miss not having the same cash flow before the age of file swaping.
But lets face it, Apple and a few other music stores are keeping these guys off the streets. I'd like them to just see what happens when they think they can call the shots.
-Bill