Apple launched its iTunes music service almost 2.5 years ago and to date it has managed to sell over 500 million tracks. In the US, they currently have a market share of about 75% for digital music download sales and about 80% of the digital audio player market. So far, they have managed to keep its 99 cent one price policy in the US, however this is likely to change with increased pressure from two major record labels: Sony BMG and Warner Music Group.
When iTunes launched in Japan, both Sony BMG and Warner Music Group refused to license music to iTunes due to their pricing policy. While iTunes offers music from these record labels in the US, unfortunately their contracts are due for renewal early next year. Apple's chief executive, Steve Jobs will do everything he can to keep this fixed pricing. Sony pointed out at a technology conference several months back that Steve Jobs gets two revenue streams (music sales and iPod sales), while Sony only gets one, which it claims is extremely small.
The record labels would like to charge a lot more for new singles, such as up to $1.49 a pop, while selling oldies for much less than Apple's 99 cent pricing. Even if the record labels gets their variable pricing, this will introduce another problem: Raising the prices, which the consumers already find high enough as it is could end up backfiring upon the record labels by encouraging existing iTunes customers to head back to downloading music illegally from file sharing services.
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Jobs is now girding for a showdown with at least two of the four major record companies over the price of songs on the iTunes service. If he loses, the one-price-fits-all model of 99 cents a song that iTunes has adopted could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for a $1.49, while a golden oldie could go for substantially less than 99 cents. Music executives who support Jobs say the higher prices could backfire, sending iTunes' customers in search of songs on free, unauthorized file-swapping networks. Signs of conflict over pricing issues are increasingly apparent. This month, Apple started its iTunes service in Japan without songs from the two major companies -- Sony BMG Music Entertainment or Warner Music Group -- leaving artists like Avril Lavigne, Beyonce and Rob Thomas out of the catalog because the companies refused to license their music to iTunes, said executives involved in the talks. Read the full, rather lengthy article here. |
It would be nice to get variable pricing on iTunes such as lower prices for older music, however as the music industry is also determined to switch consumers from file sharing services to online music stores, raising the price beyond 99 cent is actually much worse than leaving the pricing fixed as it stands. As Sony BMG and Warner Music Group refuse to license music to iTunes Japan, there is a very good chance that they will end up forcing variable pricing to go ahead. Otherwise, the US iTunes service may also lose these two major labels.
Feel free to discuss about iTunes and other online music download services on our Music Download, Peer to Peer (P2P) & Legal Issues forum.
Source: detnews.com
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the MPAA makes 70 cents off EVERY SINGLE iTunes song sold. There is no packaging, no distrobution fees, NOTHING. This is pure profit delivery, and yet they want more money more money more money. Stop support these corrupt organizations that have written enough of their fair share of laws in a corrupt government that only listens to money and forgets the REAL reason that they were placed in power in the first place. The PEOPLE!
Vote with your wallet, cause obviously congress is no longer listening to their constituants, and no longer cares what you and me think because we can not bribe them with the millions of dollars that these organizations can!
any way soon the buyer will realise that he she as the final say in a sale not the fat cat at the top wake upppppppppppp
At least at 99 cents it seemed other people were interested. I'm not the kind of person to only buy a song, either I like an album or I don't. So i'm guessing if they force apple to raise their prices, they could really see some backlash from the people who are willing to use the service.
I realy like napster over other inline store.
that way i only get the songs i like and am not stuck with a 12 track CD that only has 2-3 good songs on it. when i spend 12 or 13 or 14 bucks i get 12 or 13 or 14 songs that i wanted...
BUT - if prices head north of 99 cents - i will not be a buyer of those tracks.
is there ANYTHING that sony can touch these days that does not turn to crap?
(psp aside.....)
