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."
hello
and this is the CEO?!?!?!
what a RET@RD
I know many people who stopped buying music from iTunes and just started illegally downloading songs again. The whole allure of iTunes was that you could get a song for .99$ and an album for 9.99$.
@imwithcoco
I went back to purchasing CDs on those rare occassions when I want an entire Album because I'm tired of not having physical copies of stuff when something goes wrong with my DRM'ed device. I once lost $700 worth of music when my Mac crashed - luckily it was on my iPod so I purchased transfer software to get it off. But that incident scared me straight.
Authors typically make $2.50 on each hardcover $25 book sold. Why on earth should these books cost more than $10 when there are no trees to turn to pulp and no massive printing presses to make books and no stores to serve as bricks and mortar middlemen? It is all 1's and 0's plus some marketing and a publisher's cut.
Come on, we all know the target audience of the Music companies (as well as Apple) are the ones that are already downloading via bittorrent (and we know how much they're paying).
It's a recession too, so as a company(s) might as well squeeze those that are not savvy enough to get the cheap bitrate (196kbits) files off BT or the ones savvy enough (as someone posted) to just buy the higher quality CDROM.
Sure, iTunes revolutionized the online buying process, but they are now turning online buying as an expensive, exclusive thing and getting us comfortable with the concept of paying more than a brick-n-mortar scenario. That is a 180 from the current pattern (that products are cheaper on the Internet).
hey engadget, how come people can write fu$king but the word ret@rd is censored???
whats up with that?
And they wonder why can't we make a good Superman movie, great job Warner CEO Edgar Brainless Jr.
when kindle books go to $14.99 I will focus on older titles for the $9.99 price. paying a lot more than a paperback for a book that has no printing or physical distribution costs is stupid to me.
Just like many people wait for the paperback version of a book, I think a lot of e-readers will do the same. Or discover pirating.
@idiotekniQues
I love my Kindle, but I'll NEVER buy an ebook that's more than $8, I can wait several months for stuff to come down. $10 or more for an eBook is outrageous. My concern is stuff involving Apple almost NEVER come down in price so I'll be curious to see if these "premium" books will drop in a few months or will always be that price.
@malexandria1
I agree with this. The price of books should be differentiated with how it is distributed. The fact that I will be paying as much as a real physical book that I can read, touch, lend, trade, store, and keep an archive of is ridiculous. The reason I want an ebook is because of physical space constraints, but charging for the lack of many of the features aforementioned, I feel that it is not worth the price that these publishers are demanding.
@FrankJ
I am personally a heavy computer user and spend probably 10+ hours looking at a LCD screen of some sort (TV, laptop screen, other displays) and I can tell you that because of my line of work, my eyesight steadily deteriorated as I spend more time in front of a screen that has a strong backlight. I can tell you right now that the arguement that LCDs hurt your eyes is slightly wrong, it's mostly due to the strong backlight that goes into your eyes. Just like your hearing can go bad over the years (it erodes as you listen to lots of sound at high volumes close to your ears), you usually do not really feel the effects of it until several DECADES down the road.
The arguement is not half assed as it is mis-argued.
Also, working in the IT industry doesn't suddenly make you an expert in human biology. You have not even disclosed what your specific profession is. I can assume you to be anyone from the office clerk to the software engineering behind the scenes of some massive multibillion dollar corporation.
Same reason why I dropped my eMusic subscription last year. They raised the price per song, so I said, "Screw you."
If Amazon has it, then Apple can kiss my a**. Oh yeah Mr. Jobs, I LOVE Google too.
@tndefender
Amazon's selection is worse than Apple's, and their files are worse quality too. Additionally, their prices are the same, both of them sell songs from $.69-$1.29.
And you're aware that Safari has a Google seach bar in it, right? And that Google Maps is one of the default apps on the iPhone's home page? I'm not sure what point you were trying to make, but you made it sound like Apple hates Google or something. There's an entire mountain range of empirical evidence that would disagree with you.
What ever happened to the alleged $0.69 songs anyway?
So they think that raising prices on e-books will fare better because of the "flexibility" that THEY have, not the consumer?
Also, has anyone come across one of those $0.69 tracks?
I can see why he thinks that books will do better than music. Since the iPad will most likely only read the iTunes format, and you will not be able to import books from anywhere else. So, in that sense, it really leaves people no choice but to buy books.
Unlike music, which can be downloaded anywhere, as long as it had the proper format.
But, really, the price hasn't increased that much. Albums used to be $10 and now they're $12
2 dollars isn't really THAT much money for a whole album.
However, if a person doesn't want to get the whole album, but only wants some songs, that could cost more than the whole thing.
Well, what the hell did they expect to happen? I stopped buying songs when they weren't $0.99. That was the golden price point...
At least he is smart and admitted the stupidity that was Variable Pricing. I had almost exclusively moved to buying music on iTunes when the new pricing hit, and I can say my PERSONAL purchases have dropped quite a bit. 99 cents was a sweet spot. pushing it past a Dollar just makes people think more. I know I personally went back to downloading some music and buying songs I feel are worth $1.29 or waiting for the price to drop. So sue me. For the same reason things are priced $99.99. That one cent makes a huge difference to the mentality of somebody purchasing.
I don't think you can assume the cause of slowing growth was due to the recession. Hollywood reported a box office record for 2009 at $10.6 billion in ticket sales, an 8% increase from 2008. It may be true, but "back of the napkin" approaches to this type of question does not necessarily yield appropriate explanations.