Apple's iTunes pricing to stay at 99 cents
By Marc Perton 
posted April 21st 2006 10:14AM
posted April 21st 2006 10:14AM
Apple Computer's Steve
Jobs has apparently won his long-running
battle with the record
industry over the pricing of songs in the iTunes Music Store. Jobs has long insisted that the store's
99-cents-per-song price point should stay in place, while record companies had argued for more flexible pricing, with
newer songs going for a higher price, and catalog material selling for less. The record companies had also pushed for a
subscription option similar to that followed by most other online music stores. Now, according to The New York Post, the
record companies have largely thrown in the towel, and will allow Apple to keep pricing flat. The victory is, however,
somewhat Pyrrhic for Apple; the company makes very little money (proportionately) from iTMS, and uses the store largely
as a way to lure customers into buying iPods and lock them into its FairPlay DRM, which we all know works only with one
audio player. (Why do you think the French are
giving them such a hard
time?) Keeping pricing simple is part of Jobs' strategy to avoid losing customers to competing platforms, which have access to music stores that
offer unlimited download subscription packages for as little as $8 per month. Level pricing may help stanch defections
-- but it's not likely to produce any increased revenue for Apple, which is apparently just how they like it.
#48
"If you don't care, why bother with your post in the first place? Post 29, made by you Thill, was all about what other people use (or don't use), yet you claim not to care. Honestly enough, I wouldn't even have addressed you had it not been for post 29 (as you noticed I didn't address post 21, as the theme in that post is completely different to post 29."
Umm.. I did not author either post 21 or post 29.. Looks like your eyes are as bad as your ears due to the hearing loss you experienced from when you are listening to your WMA Rio player too loud...
By the way, you are not fooling anyone with your arrogance and know-it-all attitude. We know the reason why you are so obsessed with calling everyone an Apple fanboy.. Because you want to be one..
See you at the next Engadget iPod post (if not before)..
The only reason Apple doesn't want a subscription model is because they want to lock you into their own DRM. If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo? Nothing, and that's not what Apple wants. The subscription model is so much better, and it's a shame that so many people are worried about "losing" music to try it out.
my two cents...
as poster before me said YourMusic.com offers CD's for $5.99 per CD. You can get 3 CD's at RodaleMusic.com for $19.98 ($6.66 each).
I have two IPod's now (the newest one is a 5th Generation IPod Video). I used my first IPod -- a 2nd Generation Mac IPod -- on a Windows 98 Second Edition PC with XPlay. I had to go through a few hurdles to get songs on my first IPod (it was not hard to break the protection of the AAC/m4p format -- I converted files to m4a and then to mp3). I later converted my first IPod into a PC IPod when I started using it with a computer that had Windows XP on it.
I have purchased songs from MSN (when Rock Star: INXS was on the air) and put them on my IPod. Microsoft has provided the instructions on how to do it before (although they don't blatantly advertise it) -- you just rip the wma file to a cd and it is converted to an mp3 file. I have considered buying the Oscar-winning Three 6 Mafia song from a vendor other than ITunes (i.e. MSN or Walmart) because ITunes wants to sell me the entire soundtrack album and not the individual song that I want.
But my favorite subscription site is EMusic -- I signed a one-year agreement (and I have already been billed for the entire year). And I get 90 tracks per month (1,080 tracks in a year) -- for $192 (or $16 per month). I'm so happy I am going re-new my subscription in August for a full two years (for $360). Subscriptions start at only $10 per month, and they give you a hundred songs free in mp3 format just to try it out. They require a credit card, but cancelling is easy and online (no phone call required).
http://www.emusic.com/sunfest
#43, #44
Develops the software and the platform? Err... the software is the song and the platform is the internet/your hard drive. Its eems you know very little about how easy it is to get someone to strema song to their hard drive (whilst they are paying for the internet connection/bandwidth).
19c a song you say!
250 million songs downloaded at 19c a song, hmm... how does that = $4 million , more like 50 million $ in - unless you are saying that the iTunes platform cost $46 million to develop when I've seen more competent software available for free.... Its pure profit, all Apple pay for is bandwidth (probably 1c per song max).
#52 you're clueless. When a business has Internet servers that file transfer a song to you (it is NOT streaming!), then there are lots of expenses: employees, server computers, electricity, site lease/rent or data center fees, maintenance, etc. That costs real money. This means that revenue from songs is NOT pure profit.
The only reason Apple doesn't want a subscription model is because they want to lock you into their own DRM. If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo?"
Only the quality of apple's iPod.
I bought a Creative player a few months ago, because it was one of the best subscription compatable players. I'd have surely chosen an iPod instead, if iTunes offered subscriptions.
Furthermore, apples lack of a subscription option was a large factor in my decision to purchase of a windows laptop, instead of a powerbook. (No subscription services are compatable with tiger)
I'm sure I'm not the only customer apple has lost due to its rigidity.
"I would guess that even if the average iPod user downloads 50 songs that Apple would make more money from the songs than the hardware."
Apple's iPod profit margin is roughly 50%, meanwhile every song Apple sells, they get a mere 10-15 cents a pop.
#50
"If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo? Nothing, and that's not what Apple wants. The subscription model is so much better, and it's a shame that so many people are worried about "losing" music to try it out."
So instead, you're locked into Zen/Yahoo/Creative/Plays-for-like-Sure-totally -man!'s DRM. Soooooo much better.
The Itunes model is so much better IMHO, not to mention the fact that the store/software and player are so well integrated. It would be very hard to tempt me to move elsewhere.
I think the fans of the rental model are only those that have the desire to/have the time to sample lots and lots of different music on a monthly basis, enjoy it and then move on.
I listen to really only three genres of music (Classical, Contemporary Christian and Folk) and the amount of new music that I listen to is like 1-2 songs per month at best. Once I purchased my favorites library from Apple, its a trickle of business for them from then on.
I am willing to bet there are a lot more music consumers out there like me, then the very active rental model types.
Anyone who would pay 99 cents for a track of music is an idiot.
One of those 60Gb iPods is supposed to hold 15,000 (4 min) songs and, at .99 cents that would make the iPod worth $14,850 when full...so NOBODY fills their iPod from iTunes. That would make the iPod worth more than most people's cars!
Even the Nano holds over $900 worth of Apple tracks. It is no wonder that those white cables attracts muggers.
I think the majority of people DON'T pay 99 cents/track but they simply rip CDs (that they own or borrow) or find their tracks from 'alternative sources'.
# 58 "I listen to really only three genres of music (Classical, Contemporary Christian and Folk) and the amount of new music that I listen to is like 1-2 songs per month at best. Once I purchased my favorites library from Apple, its a trickle of business for them from then on."
Sound's pretty stagnant.
"I am willing to bet there are a lot more music consumers out there like me, then the very active rental model types."
That may be true, but many of us "active rental model types" would like to use iPods. They are fantastic players. I just wish I had the *OPTION* to subscribe from iTunes. If apple's music store would finally evolve, I'd switch in a heartbeat.
As would plenty of others.
Wow, ain't this fun....I think I need to respond to I.P. Freely's statement (#33)....
I do not blame Apple for anything...this is pure captialism. I would expect nothing less than for them to do what they can to make the most money (in this case sell the most iPods). Also, I believe the iPod is a good product..the best is just a matter of opinion.
My comment is more oriented to how iTMS' products limit opinions. I do not buy them b/c of this. I would rather give my money to a Rusian mp3 store so I can play them on anything I like without the hassle and loss of quality of burning then re-ripping.
I cannot believe you are arguing that the loss of quality is nil....WTF...do you understand how compression works? Your statement "you can't tell the difference once something has been digitized. You're splitting hair at this point" is flawed. Just b/c it is digitized does not mean that a recompressed digital file has the same quality as the original digital file. Compressing a file literally removes information....depending on how it is done, the effect is negiliable, but repeated or compressed severely, it is obvious, esp. with particular music and hardware. Try that process to a iTMS file 10x and report back.
I like Apple (products, leadership and company)...but at the end of the day, iTMS limits people's options. What if you could only play Sony CDs on their cd players? If their hardware was superior, would this be alright? Maybe. But when (or if) another company released a superior player, you would feel some pain.
The term, "do-no-wrong APPL" obviously struck a chord...I was merely musing that if we swapped only Apple with Microsoft (or iRiver or Rio or etc.) here, I find it hard to believe everyone would be on the same side.
Anyway, the market speaks as users don't mind this paradigm...so be it.
Apples profit is not 50% from iPods, I personally am involved in the distribution and knoiw that Apple dont even get 50% of the cost full stop, let alone ptofit.
#53, If I stream a song to your hard drive, then youhave it, full stop - Are you 5 years old that you dont understand that once information has come form another computer to yours (streaming) then it CAN be yours forever. Your listing electricity and employees as a big expense, grow up - how many times have you ever heard of electricity expense as being a reason that a blue-chip company didn't hit profitability. I never said it was real profit, like I said they probably pay 2.5% or so to 'stream' that music to you computer. Engadget.com probably puts out as much bandwidth as an Apple song per article, Im not paying 99c for every article I read.
If what you were saying was true, how come I can get a whole album transferred to my computer from a Russian Server for 5-10% of the price of iTunes, dont they have to pay electricity?, Bandwidth?, Data Centre fees etc... Your argument falls flat on your face there.
this posting inspired me to add more money to my allofmp3.com account :)
Hey "o rly" as dumb as you are I am going to explain this one more time.
I do not turn ITMS -> CD -> AAC nor do I say you should do such thing. But if you want to strip DRM off ITMS, this is the way you would do it.
However, if you do it, do not complain the sound quality.
Going from WAV -> MP3/ITMS
- BIG difference in quality
- Your starting point is excellent and ending at average.
Going from ITMS -> CD -> AAC
- SMALL difference in quality
- Your starting point is average and your ending up at below average.
That is the point I am making. I'm not talking about merits of encoding, I am talking about what you start with and what you end up with. And as far as any normal people are concern, going from ITMS -> CD -> AAC, MP3, for that matter any format, doesn't matter because going from bad to worse is not that big of a difference.
So you're a f-ing idiot to assuming that I am advocating this. which I don't.
Plus there is nothing wrong with Apple's Lossless, I don't want to use uncompressed media on my iPod, so I prefer this format. If you can distinguish the differences, more power to you, Bionic Woman.
Whether you own or "rights" to music, as far as I'm concern I own it to do what I want to do with. I don't go around giving it out to people.
@ 50 / Thill: "Umm.. I did not author either post 21 or post 29.. Looks like your eyes are as bad as your ears due to the hearing loss you experienced from when you are listening to your WMA Rio player too loud...
By the way, you are not fooling anyone with your arrogance and know-it-all attitude. We know the reason why you are so obsessed with calling everyone an Apple fanboy.. Because you want to be one..
See you at the next Engadget iPod post (if not before).."
Are you talking to me (currently #49) or #48 (Bren) who said "I like iTunes?" Based on the amount of time you've been here, you know very well that posts get bumped and numbers get changed, so using "I did not author either post 21 or post 29" is a pretty sad excuse to try to get away from the questions asked, which is typical of you, as you've done it many times before (make an accusation, get called on it, then try to change the subject).
As per my attitude, I've never stated that I knew it all (however I may know a little more than you,) nor have I called everyone a fanboy; once again, if you can provide any sort of proof to your claims, please post the link, but by your current track record, you won't back anything up, just continue with more deficient accusations.
Until your next accusation.
@ 65 / I.P.Freely : "Hey "o rly" as dumb as you are I am going to explain this one more time.
I do not turn ITMS -> CD -> AAC nor do I say you should do such thing. But if you want to strip DRM off ITMS, this is the way you would do it.
However, if you do it, do not complain the sound quality.
Going from WAV -> MP3/ITMS
- BIG difference in quality
- Your starting point is excellent and ending at average.
Going from ITMS -> CD -> AAC
- SMALL difference in quality
- Your starting point is average and your ending up at below average.
That is the point I am making. I'm not talking about merits of encoding, I am talking about what you start with and what you end up with. And as far as any normal people are concern, going from ITMS -> CD -> AAC, MP3, for that matter any format, doesn't matter because going from bad to worse is not that big of a difference.
So you're a f-ing idiot to assuming that I am advocating this. which I don't.
Plus there is nothing wrong with Apple's Lossless, I don't want to use uncompressed media on my iPod, so I prefer this format. If you can distinguish the differences, more power to you, Bionic Woman.
Whether you own or "rights" to music, as far as I'm concern I own it to do what I want to do with. I don't go around giving it out to people."
Although Pablo already dealt with you in post #62, I'll add a little more.
Good try at backpedaling about not re-encoding iTMS files, but you've already said "you can't tell the difference once something has been digitized. You're splitting hair at this point" so re-encoding must really not matter to an "audiophile" like yourself even when it's a "SMALL difference in quality" because you go from "average and your ending up at below average."
Somehow you'll try to "explain" it to me, yet you don't seem to make much sense, as your posts are contradictory.
Of course you aren't "advocating" the use of re-encoding an iTMS file even if you said "you can't tell the difference once something has been digitized" and "because going from bad to worse is not that big of a difference." ...and this coming from someone with Etymotic ER6's...
If "you can't tell the difference once something has been digitized," it's apparent that Apple Lossless is lost on you.
Because the record companies are for subscription services, I am against them. I don't care what they say, I don't steal music, and I don't give music to other people. If you are that bothered by ITMS drm, then there are several programs out there to remove it.
Second, why would you pay to listen to music and then buy it, when you can "be introduced" to new music any where on the net. Subscriptions, are just a way to restrict what we can do with our music, and make more money while giving us less choice.
"So instead, you're locked into Zen/Yahoo/Creative/Plays-for-like-Sure-totally -man!'s DRM. Soooooo much better."
Umm, you're not locked into anything. You stop paying the $15 a month and you can switch to whoever you wish. Subscription models don't "lock" you in because you're not stuck with hundreds of dollars worth of music that only play on PFS or FairPlay compatible players. You can switch around as often as you want.
For the record, I do not think the IPod is a bad product. Certainly, that nifty clickwheel is the best navigation tool on any of the players I am familiar with.
And that's about it.
The main reason the IPod is so successful is the same reason many mediocre (or worse) products and ideas are successful -- marketing. Most people are sheep. You're told by a self-appointed God, Steve Jobs, that nobody wants subscriptions, and therefore nobody wants subscriptions. You think that if you have a subscription plan, somehow you've made a pact that you can never buy any of the 1 - 2 million songs you can sample through that subscription. Huh? Does this make sense?
There is so much music out there that gets virtually no exposure, and yet so many people buy the crap they are told to like. I get to hear whatever I'm even slightly interested in and decide what's worth my money. Which sounds more appealing to you?
It's a shell game. Steve Jobs is a brilliant marketer/conman. He even managed to convince people that the Shuffle was good because "life is random". He took the weakest feature of that player, the lack of a screen, and used it as a marketing ploy. And it sold big time. Heaven help us if he decides to work for the GOP.
If you like the IPod, I'm happy for you. But like it because you like it, not because the mindless media in this country says you should.
When Urge comes out, embedded into the newest Windows Media Player and with the marketing support of Microsoft and MTV, the subscription model will start to take hold. And then Jobs will either have to rethink his subscription stance or have to deal with a competing marketing onslaught. And if he does change his take on subscriptions, how many of you subscription haters will suddenly love the idea?
Until then, enjoy your clickwheels.
a point nobody's made, so i thought i would introduce it to the discussion. A nameless record exec in the article asked: "Where in life does the retailer set the price of the content?"
Wal-Mart. Wal-mart uses it's world's-biggest-retailer status to pressure manufacturers (contet providers) into lowiering production costs on the product/content, as part of the company's plan to cut prices for consumers by cutting operating costs.
of course, likening Jobs' insistence on keeping itunes subscription-free (which it isn't - lifetime subscription is just included in the retail price of the ipod, but itunes sans-ITMS allows for non-tethered music files from ripped cds, filesharing, etc) just opens up a whole new can of worms.
my own ipod/ITMS stats: i have a 20g ipode photo, 1533 songs on it so far. I've purchased between 15-20 of them from ITMS, the rest are from my music collection as it stood before i bought an ipod.
i agree with the theory that most ipod users aren't buying a lot from ITMS. mine is mostly a way to keep all the cds i like in a single small portable unit i can play in my car and cubicle. no hunting for discs or the like.
you can own, use and enjoy an iPod and NOT buy anything off of iTunes. If your so upset at DRM then buy CD's and load them into iTunes and your iPod.
You have options.
I like the convenience of purchasing songs on iTunes and creating my own CD's or Playlist's in which I wanted and like EVERY song. Clearly the business model is working and catching on for a majority of the people.
If you hate it then buy a Sony bean and enjoy Play for sure.
.99 cents in still over priced considering we're talking Digital copies: Copy, Paste, done. It's almost free to do at the distributor level. I don't want to spend hours dowloading music either in a subscription service like Yahoo! regardless if it's $5 or whatever per month. We all know it's dirt cheap to cut a CD as well, but either way the RIAA should be kissing Steve Jobs ass for putting digital music downloads in the respectability sphere. Jobs should create his own music licensing company, so artists and new artists do not have to go through RIAA. I'm sick of the industry cabals telling me what to do. If you want my mula, ask me what I'd like for a change ... or maybe just once!
I like itunes.
I like even more emusic.com, which is a subscription based service which asks subscribers to pay $10/50 downloads a month and up (I pay $15 for 65). Users download songs, either individually or by album, and can cancel at any time, still keeping the songs they've got. Tracks are compatible with most mp3 players, including the ipod, and you can burn copies if you prefer to listen on CD.
I still buy songs on itunes every once in a while, and I find the user interface preferable to other online music services, but if I download, emusic is my first choice these days.
Holy f#@k, I had no idea that the subcriptions were that lame. I thought you pay a monthly fee to download whatever you want, then it's yours. I never heard anyone talk about how you're just renting the music. Wow wow wow the idea makes me nauseous ~ ugh. Everytime I read about recording industry in the news I hate them more and more. I used to buy lots of CDs, lots of DVDs (I own over 400 DVDs), but screw that, I don't want to support these greedy sons of bitches anymore. RIAA/MPAA you make me sick, F#@K them anyway we can I say. It is our moral obligation not to support greedy nasty corporations who corrupt our government by buying whatever laws suit their whims.