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99cents not enough for a song? Apple thinks so.

The Watcher

TRIBE Member
[FONT=Arial, Helvetica, sans-serif]Cost Accost[/FONT]


[FONT=Verdana, Arial, Helvetica, sans-serif] For years, music fans have accused record companies of unfettered greed in their chase after the money in your wallet.

Then came Napster, file sharing and downloading and music moguls moaned they were going broke amid the piracy and begged fans to stop cheating artists –- and by extension, the companies who record for them.

The illegal swapping still goes on, of course, but websites like iTunes -- which sells individual songs for 99 cents each -- has definitely helped put the put-upon labels back in the black.

So you can only imagine how fans who were convinced by moral arguments and threats of lawsuits to stop downloading are going to react to this news.

The music industry doesn’t think 99 cents is enough to pay for some tunes and wants you to shell out $2 or more per specific song.

Which sets the stage for a big battle that could have Goliaths Apple and the record labels fighting each other, while the music-listening Davids sit watching on the sidelines.

The industry is expected to enter into earnest discussions with legal online music sites about pricing sometime this year and there could be some discordant notes.

"The labels really want to be able to boost up the price for downloads on new releases," affirms digital music analyst Matt Kleinschmit. "The question is, are we at a time now that we want to experiment with variable pricing?"

Record companies currently make about 70 cents on every song you buy online. Raising the price will significantly also raise their profits.

The song solons believe they should be able to charge more for popular artists than for lesser known groups.

And to add to what some see as the never ending need for more and more money, Warner Music C.E.O. Edgar Bronfman Jr. has already suggested iTunes give them a share of iPod sales.

Apple founder Steve Jobs isn’t amused. He claims the companies already make more through iTunes than they do CD sales, and he doesn’t mince words about the suggestion.

"If they want to raise the prices, it just means they're getting a little greedy," he suggests.

Some analysts counter it’s simply the marketplace finding its own level. But others believe the MP3 revolution has given customers the upper hand and they won’t stand -- or spend -- for it.

"After you cross that 99-cent psychological line with consumers, you're going to hurt sales," predicts Wayne Rosso, who ran the now defunct file sharing site Grokster.

That could create a return to the one thing the record industry wants least -- unbridled piracy.

“We can throw variable pricing in and we can raise prices of a hit song, but it doesn't mean consumers will buy," warns security analyst Charles Wolf. “They have an alternative -- get songs for free."

And if history is any indication, there’s not a lot of resistance to that option.
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[FONT=Verdana, Arial, Helvetica, sans-serif]http://www.pulse24.com/Business/Top_Story/20060403-001/page.asp
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acheron

TRIBE Member
so the title of this thread is wrong. Apple doesn't want to raise prices, they're resisting that - once again it's the record labels who are putting the pressure on. oh, and this story's like three or four months old.
 

deep

TRIBE Member
acheron said:
so the title of this thread is wrong. Apple doesn't want to raise prices, they're resisting that - once again it's the record labels who are putting the pressure on. oh, and this story's like three or four months old.
 
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acheron

TRIBE Member
something that is neglected frequently in the talk about record companies losses to file sharing/market disinterest/whatever is that their profit is going down, but they're still making a profit! Just less.

 
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Aerius Zension

TRIBE Member
What I'm seeing is an HMV online, per song but less quality than CD tracks. Plus, they don't have to spend on shipping/manufacturing the physical item.
 
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