Warner CEO: iTunes price increase led to lower sales, recession might also factor in
By Donald Melanson 
posted February 9th 2010 3:31PM
posted February 9th 2010 3:31PM
Don't pat yourself on the back too much for calling this one, but Warner CEO Edgar Bronfman Jr. has now confirmed what many have suspected: higher iTunes pricing has led to slightly slower sales. Specifically, he says that while the variable pricing introduced early last year has been a "net positive" for the company, revenue growth on iTunes slowed to just eight percent in the last quarter, compared to a hefty 20 percent a year earlier. He is also quick to point out, however, that raising prices 30 percent during a recession may not have been the best idea in hindsight. Interestingly, Bronfman seems to think that e-books actually stand a better chance at holding to up to price increases than music, noting that the "book publishing industry, on the iPad, has much more flexibility than the music industry had."
Very astute.
I'm surprised he didn't try to blame music piracy like always
@ddmeightball YARGH
@ddmeightball
Although now we can actually blame Apple for the increase in ebook prices.
@Arkv2
eBooks should be worth more anyways.
@LandMine Hare And any particular reason you believe they should or just like being a troll and trying to get people to flame you?
@LandMine Hare RIGHT.... Like I'm going to spend $16 on an ebook when I can buy the hardcover instead.
And at 29 years old with a career in the IT industry I still have yet to buy a single song off of iTunes (or any digital source for that matter.) Call me old fashioned but I like to actually own a CD.
@chripuck
You wouldn't be buying an eBook on an ipad anyways. The screen isn't meant for reading books. E-Ink is about the only option these days for reading without serious eye strain, and the ipad doesn't have it.
@(Unverified) And still here you are. Spending 12+ hours in front of a LCD screen. Reading. Might not be a book you're reading but ... dude your eyes must be sore.
@moshimoshi
Glad I'm not the only one who finds fault in the argument that LCDs produce a ton more eye strain than e-ink. I am in front of a computer 8+ hours a day for work and a few every night at home for some personal web browsing and games and I never feel this strain everyone talks about. Guess I'm just lucky.
@moshimoshi
Try reading a book on screen. It's not the same as reading through an engadget article and a couple engadget comments.
@cherryboom
I don't think it's misinformation, most people would say that reading from a book is more pleasant than reading from a screen. plus, it's well known that people do get eye strain/headaches from staring at a screen all day! Not everybody, but enough!
I read from my computer a lot (6 - 8 hours - school, typing, blogs etc...), but I also have a kindle, and the difference is night and day, just because you CAN read from your computer screen doesn't mean it's the same as reading from an e-ink display - because it isn't.
@moshimoshi I agree this whole argument is old and played out. I read quite a bit everyday on my LCD Macbook Pro and my eyes don't hurt.
@ a few of you...
If you're worried about your eyes hurting when reading a book on the iPad... just take a break and surf the web, play a game or watch a video. The iPad does many things.
While the Kindle is an excellent book reader... that's all it does.
The iPad may not be the ideal book reader... but the Kindle is an awful media player, unless that media is black-n-white linear books.
Trade-offs, man... trade-offs.
You are actually reading engadget from a screen much worst than ipad's screen. If one reads less than 1-2 hours a day , Ipad's scrren
is okay, and in addition it's faster, and in colors.
@Michael Scrip "While the Kindle is an excellent book reader... that's all it does."
Are you suggesting that people buy the eReaders because they want to use it for some other purpose? To some, reading is a major hobby. Having a device tailored for reading is not a bad thing. In this day of multitasking and multifunction, I have realized that it's not always so great to have an all-in-one that does everything in a mediocre way.
@erasure25 -- "Are you suggesting that people buy the eReaders because they want to use it for some other purpose?"
Nope. But people seem to think that the iPad and the Kindle are in direct competition... don't they?
You're right... if reading is your major hobby, then an e-ink device is right for you. If it's not, you can get a device that does other things.
$1.29 for the popular songs... buy 5 song you could afford an entire album of 12 songs.
@Jaylittles531
... of which only five songs are worth a damn.
@eyerot You're listening to the wrong kind of music, then. The albums I buy always have 10+ good songs.
@Jaylittles531 If you buy music from the itunes store, you probably listen to the wrong kind of music. That's just a given.
@Sabrage zing!
@Jaylittles531
Seriously. Just buy amazon used CDs for $5.00 and rip to a lossless codec. You get the CD for cheap and you get superior quality audio files.
@Jaylittles531 I don't see why people cherry pick songs anyway I personally like to own the entire album not just the played out tunes on MTV
@angermeans MTV has music?
wonder what the alleged growth rate of pirated music was before and after variable pricing?
@rickster
But they made more sales before! So it must be pirates! Not their ripoff prices!
Hmm, higher prices lead to lower sales? Next your gonna tell me the earth is round!
@Nitesh
This CEO is so smart. Let's raise his bonus an extra $20 million.
@Nitesh In other news today, economists have asserted that price elasticity of demand is still negative. The search for the elusive Giffen good continues...
@Nitesh Can you blame Apple? That's what happens with their Macs...
@Oli D
They get round? Or you get stupid?
@Nitesh
Crazy! The Earth is an oblate spheroid!
:]
@Oli D
That's typical PC ignorance that is so rampant on this site. If you had any idea what you spewed, you'd have the facts behind you that Apple has enjoyed record growth in laptop and desktop units sold the past few years. 2009 was up 17% from a year ago and 2008 was up 21% from 2007.
@Kid Red That's the typical mac user that makes everyone hate mac users.
@Nitesh
Next I'll be telling you that competition leads to lower prices ... wait, what?
@Kid Red "Typical PC ignorance"? Macs are personal computers too, or maybe you just wanted to fight stupid with stupid.
"book publishing industry, on the iPad, has much more flexibility than the music industry had."
Ehm... how?
@TMC
People are used to buying the same content in different forms, hardcover paperback, audio, and paying different prices for them. Hardcovers don't cost much more to make than paperbacks, but they can charge a cover price $20 more.
@Lyrrad
The price difference here between a real CD and albums on iTunes is roughly the same as the difference between paper backs and the EBooks for the iPad, so I don't understand why the market should be different for books.
@Lyrrad
I don't think there is any big conspiracy in pricing. Hardcover books cost more because they cost more to manufacture, because of using better paper, and usually have a set number made. Paperbacks on the other hand are cheap to make and usually are made in a much higher number, using cheaper materials, therefore have a much lower cost.
So I guess Apple's solution is going to be DRM protected music at $1.49 a track plus tax. I can see it coming. I love my torrents :)
@tklr08 Vuze FTW!!
@tklr08
Yes, because stealing music is the same thing as buying it, just without the inconvenience of spending money, right?
@Jack
I don't steal music. When you download a picture and view it, but you didn't take it, would you consider that stealing? Downloading a copy of a song is the same thing. Stealing would be going into a store, cracking a CD case open, popping out the cd and sticking it in my pocket.
@tklr08
Tell me you're not really that stupid. When you buy a CD you are paying the LICENSE TO PLAY IT. When you STEAL music via a torrent, you are not paying for ANYTHING.
Do you not get that part? The part about paying for music in order to be able to legally put it onto your computer and listen to it? Did you pay the band directly for the rights to listen to the music? Did you pay the label directly?
No, you didn't pay anybody. That's why it's STEALING. You think bands get paid by a magical tree that grows money? How do you think this process works?
@tklr08
Someone new in the music scene worked hard to create a song. That same person will receive some money from the label, enough to live for a while. Then he will receive some quarters for each file/CD sold. Nobody buys it, and he stops being a musician because it's nonsense. Get the idea?
@Jack
Several years ago (but not more than a decade) there was an analysis done on where musicians actually make the most money, and that's from live performances. Record / CD sales mostly go to the label. Don't know about it now...
The whole thing is kind of disgusting. After all, music in general is art. Major labels are big corporations trying to monetize on art. Leads to messy stuff. Yes, musicians should be able to live off their music if they are doing well. Record companies should be able to make some money too.
I think a true musician is more concerned with people hearing and appreciating their work and being able to survive comfortably. I think the middle-man (labels) need to be cut out, or cut down to size.
i just don't understand how people think the iPad is a viable alternative to e-readers or regular books.
who wants to read entire novels on an LCD? i've done it before (and will most likely do it again for out of print and/or impossible to find books) and it is a royal pain.
@willowtwf
it's a viable alternative when the one-trick pony Kindle DX is $489.