Misplaced Blame Over iTunes Pricing
from the not-price-fixing dept
With the news coming out that, as expected, Steve Jobs wouldn't back down and convinced the labels to sign new contracts that keep the price of songs at $0.99, some are wondering if that's really a good thing. Mathew Ingram is the latest to suggest that, in doing so, Apple is also missing out on the ability to lower the price of some songs -- and suggests everyone thinks the result is good because they hate the record labels and like Steve Jobs. In fact, he suggests that Apple is "price fixing" here. That's not quite right. The concern over price fixing is whether or not the labels are having undue influence over the retail price -- and perhaps colluding to set retail prices. As a wholesaler, the record labels should be able to set their wholesale price at whatever they want -- and the retailer (in this case Apple) has the right to accept it or not. However, where the price fixing question comes in is that the labels should have no say in the final retail price -- and Apple's decision to set the retail price across the board at $1 isn't price fixing, so much as a merchandising decision of the retailer.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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You know what they say...
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99 cents
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Re: 99 cents
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Re: Re: 99 cents
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Why should the price go up?
What a surprise, I could buy each of those albums for $9.99.
So, I not only get the songs, but the CD and the Case along with all the artwork. Sure, I spent a little more money on the gas to get the the store, but I was on my way home from work and it was a short excursion.
I think Apple and the Music industry need their heads read because $.99 songs and $9.99 albums (actually, most albums are more then $9.99 because Apple includes stupid bonus videos nobody wants) is freaking rediculous. There is NO cost overhead. I am sure Apple is running their iTMS for cheap, they are their own equipment suppliers. I can get a domain and server space from GoDaddy for $5 a month, I know the iTMS is a little more complicated, but web space isn't that expensive these days.
The fact there is no physical media or materials involved means that iTMS songs should be like $0.50 each and the album cost $5.00.
BTW, the new Tool CD comes in a nifty case that includes stereographic glasses and artwork. Leave it to Tool to actually make the CD case part of the product and desireable. You can't even buy Tool from the canadian version of thes store.
I will not pay for iTMS again. It is a rip off unless they drop prices by at least 50%. Both Apple and the RIAA are ripping iTMS customers off because they are too lazy to get up off their asses and go to a store and get the same music for the same price, or even cheaper!
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Re:
It's probably not Apple's fault. In order to get that 99 cent song price they probably had to give on album cost. However, Jobs knows iTMS is all about buying the song. Buying an album on there is rip-off because the cost is equivalent to the CD and the quality is much, much lower.
Also, if you wait a few months, the CD price is often available for less than 10 bucks (Amazon's CD Club offers many of them for 8 bucks). iTMS' price almost never falls.
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Cost-Benifit
Maybe the "lazy" factor lies within apple's inability to explore the options to re-market certain areas (that might not be doing so well) as cheaper, which may instill consumer confidence in the service and boost sales.
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it would not get any cheaper
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iTunes
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Re: iTunes
Indeed. That's a good point. However, an interesting element of this is that it's mostly the labels own fault! They wouldn't be in this position if they hadn't required Apple to use DRM, effectively locking those customers to Apple's service alone...
So, while I'm hardly an Apple apologist... again, I'd say it's the recording industry that has itself to blame.
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Misplaced Blame Over iTunes Pricing
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Re: iTunes
Certainly the industry has itself to blame for Apple not raising the prices. But the point Mathew is making is that their "quasi-monopoly" means there is no pressure on Apple to lower their prices.
It would be interesting to see Apple's reaction pricewise if allofmp3.com began to get a significant market share....
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Re: Re: iTunes
Certainly the industry has itself to blame for Apple not raising the prices. But the point Mathew is making is that their "quasi-monopoly" means there is no pressure on Apple to lower their prices.
Indeed. I agree with that point, but again, the reason for the monopoly was the labels own insistence on DRM. It's hardly Apple's fault.
Secondly, there's no way the labels were thinking of lowering their wholesale prices on songs, so it's unlikely that Apple would have lowered their prices no matter what.
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Re: iTunes
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Loss Leader
GOM
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Econ 101
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why iTunes?
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Re: why iTunes?
Legitimacy. I'm not assured that allofmp3 is actually legal, so why pay at all if I can get it for free? No advantage.
Like Techdirt has pointed out on numerous occasions, vast numbers of people are genuinely willing to pay for what they enjoy. If I give Apple a buck for a song, I don't ever have to feel guilty, and like a good pavlovian creature, apple/the industry/the artist will try to make more of something I'll buy.
In this respect, allofmp3 is a parasite. I have nothing against them or their customers, just offering an explanation. To many people, it's worth paying the source.
(I'm intentionally avoiding the argument of artists compensation by record labels)
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Re: Re: why iTunes?
AllofMp3 pays royalty to RIAA but it's much cheaper because it's different country and different law.
But it's 100% legal no matter what iTunes says.
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Why should popular songs cost more?
In the digital store, the supply for any song is darn near infinite. No amount of demand will ever make it less so. Unlike physical CD's, which need to be pressed, delivered, etc., there is very little cost to deliver digital content, even if every man, woman, and child in North America wanted to purchase it.
One could even argue that the most popular songs should be less expensive, because their production costs are recouped many times over. Moreover, the promotional costs for high-profile artists should be much less, since the industry to does not need to educate the consumer about who the artist is, etc.
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the price would'nt go down. Be real.
The price is set by analyzing the psychological response to the number .99, not the actual value of the work. I wonder if people actually really respond more favorably to .77 then .99. I doubt it. consumers operate on an unconcious level for the most part, Especially in a convienience store environment.
The day that artist sell directly to their audience will day of the music revolution. Until then, nothings really changed.
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