Amazon Finally Launches MP3 Download Store; Pricing Still Wrong
from the about-time dept
It's been rumored for ages, but Amazon has finally launched its MP3 download store, hyping up the fact that it's DRM-free. Amazon had gone back and forth on this idea for a while, at one point apparently considering teaming up with Apple on iTunes, only to later plan to go it alone. At one point, the rumor making the rounds was that Amazon felt it would be too difficult to compete with iTunes and had temporarily scratched plans for an offering. That was until folks at the company realized that the achilles heel for iTunes might be its DRM.And that brings us today, with Amazon launching a DRM-free mp3 download store. It's definitely a step in the right direction, but it's still got some problems. First, the selection is definitely lacking. While the company has brought together an awful lot of content, there are still many record labels (and bands) that fear DRM free music (ignoring, of course, that most CDs are DRM-free). The second problem is that it missed the chance to shoot at the real achilles heel of iTunes: the pricing model. The songs all cost either $0.99 or $0.89, which is way too expensive in an age where people can carry around iPods with 160 gigs of content. Now that labels are finally coming to terms with the fact that DRM is a dead-end concept, the next big revolution will be in the price of music. So while Amazon got the first part right, the second part is still open for those who now want to attack the achilles heel of both Amazon and Apple.
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Filed Under: drm-free, mp3, music store
Companies: amazon, apple
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You're just not happy
Now there's a pricing model ... they artist pays the consumer to listen to their music ... not so absurd considering how BAD some of the so called 'music' is today.
Regardless, this appears to be more of a true competitor (i.e. apples to Apples) and may start driving down the costs as you desire.
Glad I never became a rock star. No money left in it.
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Re:
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Re: You're just not happy
It's not about being happy. I'm quite happy. It's all about where the industry is heading and trying to help companies not get steamrolled.
Glad I never became a rock star. No money left in it.
I'd argue the opposite. These days, you have a lot more opportunities to make money from being a musician than you did just a few years ago.
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No money left in it?
There's rarely EVER been any $$ in music selling CDs.. unless you're an independent artist and can make and distribute the CDs yourself. Most artists, unless they have a VERY GOOD contract, get a small percent (5 - 8%, I think) of a CDs cost to the consumer, (this amounts to .75 cent - $1.20 on a $15 CD).
Rediculous.
As for Amazon's effort it might not be pefect, but I say let them try we need some good options besides iTMS which I refuse to use.
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Another Opportunity for Amazon
-pjc
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We've seen this hypothetical model you talk about.
Their model was perfect. They let the consumer decide what audio quality they wanted to hear, and had an extremely cheap pricing structure that varied based on what the consumer chose. All DRM-free.
A 'friend' I know that used to have an account there, and he found that the prices they charged for these consistent quality DRM-free downloads were enough incentive to cough up the money instead of turning to file-sharing. In fact, the prices were so right, that they actually created incentive for him to try out MORE music, music he might not have thought twice about purchasing before. Go figure.
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Tried it, loved it
I don't agree with you that they got the pricing wrong - plenty of people are willing to pay the iTunes price for single tracks, and they give a significant (sometimes more than 50%) discount when you buy a whole album. You may not like the whole album as much as individual tracks, so they offer you a discount. You don't HAVE to buy it.
I don't understand why you are unhappy with the price. They're priced competitively with the leader in their market, and offer an ostensibly superior service. That's exactly where their pricing should be. Just because the capacity of an audio/video player exceeds most consumer's ability to fill it with music doesn't mean the price is wrong. By having access to "160 gigs of content" it is irrational to conclude that I should be able to fill that content for a meager sum. That's what, about 100 days of music? You really think you should be able to inexpensively purchase 100 days of music? Really?
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I agree that the rock star has more ways to make money now. I don't think that can translate out to all rock artists.
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I dont getit...
If the idea is to make prices so cheap that people dont have to go to the torrent sites, then that will never happen. On the other side, like others states and I agree with this notion, there has to be some form of profit here. Yes there is the business model to sell at a loss or even (a la iTunes) to pull customers into your other money making products (iPod) but that does not work in all situations and again, to what end. People will always complain that it should be cheaper.
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Simplicity fails the simple minded yet again....
The majoirty of us "Free-loaders" are actualy willing to spend money, and if the price is right we'll go ahead and purchase it. If I knew I could go to website.com and get an album for a buck with no hassle of having to fish through site after site supported by a milliion popups of enlargment, credit, or porn offers to hopefully get a semi-decent audio quality rip, then the $1 an album site is going to get my buisness, and odds are I'm gonna fish around and see what else I can get for $1. Then upon realizing that every album I could ever want only costs me $1, and the quality is going to be good, and DRM free, so I can use it in any fashion I want, then I'll spend $100 for 1000 songs everytime I get the chance, because it's simple and cost effective.
I for one will probably never actualy pay for music, aside from buying directly from the artists. I know how to protect myself when downloading songs and the like, but the majority of people out there don't. What they want is a safe secure hassle free way to obtain their goods, right now some poeople think $1 a song is reasonable, and a lot of people don't. Drop the price to .10c a song and everyone will find it reasonable, and odds are more than likely that they'll pay for them, again, and again, and again.
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this should be applauded...
The whole scarcity pricing is BS- there is no scarcity of digital goods within a marketplace. Just because x is more popular than y does not imply that the purchaser of x wants it more than the purchaser of y. In fact, rarity is generally what makes the prices go up, people used to pay more for the obscure hard to find stuff. Real scarcity pricing should be arbitrage across marketplaces- you can charge more for the stuff that your competitors don't sell.
The real question mark is Vivendi Universal- this completely contradicts their previous complaints about Apple.
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doesn't always work
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Re: Simplicity fails the simple minded yet again..
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160 Gigs
Of course, that conveniently discounts the fact that those are VIDEO iPods, and video takes up a ton of space. So we're talking about maybe 100 movies, or 200 TV shows. And 200 TV shows works out to be a little over seven seasons / boxed sets at for a grand total of maybe $250. Or $400 at $1.99 each.
And an argument that also ignores the fact that people also use them for backups, carrying their photo libraries of their kids, and the like. So assuming that an 160GB iPod just HAS to be filled with "overpriced" music is... well, we all know what happens when we assume, don't we?
Next argument please.
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Re: Simplicity fails the simple minded yet again..
$0.10/song - that isn't the price point for everyone, and I'm guessing that for more people than you'd guess, the difference between FREE and $0.01 is an impossible chasm. If I have tens of thousands of songs (which, for the sake of argument, lets say I do) - do you really think I'm about to shell out hundreds to thousands of dollars to "legitimize" that collection?
The value comes in making it easier to pay a little than go through the hassle of torrenting a file, hoping its right, checking my AV software to make sure its up to date, watch for honeypots, worry about the impending threat of litigation when my ISP turns my info over to the RIAA, etc, etc.
The question is whether your time is worth it. Honestly? Mine isn't, and I'm paying for the convenience, not the good itself. If you're torrenting/limewire-ing the files, well that's because your time is worth little enough that the opportunity cost of having you track it down yourself is LESS than a dollar (or you grossly underestimate what your time is worth).
So it isn't as "simple" as you think. If it were that "simple" than a "simpleton" like yourself could run an online media empire. Instead, you're a trolling this site.
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Re: this should be applauded...
However, this doesn't contradict Universal - their main complaint was that Apple had all the pricing power. They don't anymore, Amazon has some and presumably Universal has some. They've also got a bargaining chip with iTunes (Match the deal there or we'll pull out).
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Re: Re: Simplicity fails the simple minded yet aga
Let’s look at it this way; witch is better selling 100 songs for $1.00 or 1000 for $0.10? In the end the profit is the same, $100, but in music the more people that hear your music the more are likely to buy more.
It has been said before; illegal file sharing will not be stopped. It can't be. You, yourself said so. The only thing that can be done is to slow it down. That's where lowering the price comes in, or at least offering more for your buck.
10 cents is just an arbitrary number. If a million people are buying songs for $0.99 and 5 people are downloading, than $0.99 is fine. If one thousand people are buying but millions are downloading, than the price is wrong.
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hamstrung by the labels?
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Re:
You seem to have misunderstood what I'm talking about. Of course they're in business to make money. The point is that they've left themselves wide open to NOT being able to make money. You need to understand basic trends of where things are going, and if they leave the door so wide open, someone else is going to take it and then the company won't be making any money.
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Re:
Actually, I'd disagree. I think the superstar is likely to make a bit less money... but that the average every day musician has a much better chance of making money. He can now create, produce, promote and sell at a much cheaper rate.
It used to be you were either a star or a starving musician. New systems, business models and tools has opened up a wide set of opportunities in the middle for a MUCH larger set of musicians who can now make a decent living, rather than just waiting tables.
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Re:
Oink.
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Two years I was given an Ipod as a company thank-you gift. Up until then I hadn't purchased a CD for about 10 years simply because I couldn't be bothered to make a trip to a music store and I didn't like the idea of dropping $12-15 on a CD that maybe had two tracks on it I liked.
iTunes brought me back into the market because they added value by making purchases easy and convenient. Plus, iTunes stretched my purchasing power because I only bought the tracks I was interested in.
However, iTunes has (and now Amazon), in my opinion, a fatal flaw in it's pricing model. While I am willing to spend $1 for new music I made a conscious decision to not buy my old 'favorites' because I'm not about to drop $1 on a song I've heard on the radio for several years.
I don't mind paying $1 for a current Billboard top 40 song but it is insane to ask me to spend $1 on a song that is 5, 10, 15+ years old.
But, if they priced older tracks cheaper, say .15 - .20 I wouldn't hesitate. I would fill out my library of my old standbys without much thought.
It is crazy the industry doesn't recognize older tracks don't command the same price as a current hit. They discount older, less popular CD's so why not downloads of the same music?
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Cars are a scarce resource - it takes engineers to design them, physical materials to build them, fuel and ship/truck space to move them to somewhere I can purchase one, etc. Still, it IS a competitive market, and I have several options for getting one cheaper, including just buying one second-hand.
Rent I have some control over. I live NEAR Boston rather than in it, cutting my rent by about 2/3 while making travel take a bit longer.
If I don't feel that my cable company is providing me sufficient service for the price, a number of satellite companies will happily take my business instead. The cable companies know this, and that keeps prices in check.
If I think Dell charges too much to assemble a computer for me, nothing stops me from simply ordering all the parts and building it myself, and indeed that's exactly what I do.
Insurance is somewhat of a weird one, because it's basic a gamble where the company figures out what the average person will need to paid out, then make sure the fee is over that number, but not far enough over that the competition wins. Insurance prices tend to be a reflection of other industries - what does medical treatment cost, what does a mechanic charge to fix your car, etc.
Music doesn't quite fit with the above...
There's no material expense like with the car, beyond a few thousand for the initial studio crew recording the album, something that would amount to less than a penny per buyer o on popular albums, and maybe a nickel for lesser known one.
There's no land shortage like in real estate, so the economic factors of real estate simply don't apply.
There's no cable vs. satellite thing, because the record companies don't own the backbone of the internet, whereas the cable companies actually do have to lay all that cable, control the network, pay the techs to do maintenance and repairs, etc. All of that obviously costs money, so I don't at all mind that I'm paying a fraction of that cost for the service. We've already paid to transmit the music via our ISP - it doesn't cost a record company 1 cent to get those mp3s to me. Sure, there's a server bandwidth cost, but that's paid by the store, not the record company, and on mass scale, comes down to pennies/album... if even that. Shows also cost significant money to make in the form of paying actors, directors, etc, and those costs get passed down the line. I'd love to say the same is true for music, but musicians make almost nothing on album sales, and hope to do well with them only so that people will see them in concert, buy merchandise, etc... where they actually DO make money.
There's no reflected industry like with insurance. CDs are cheaper to manufacture than tapes, and things like that affect prices... or they would, except that few people actually care about getting a hard copy anymore.
So I'm paying 1-5 cents to have the album produced, 1 cent to cover the server's cost of transmitting me the album, and 50 cents at most to the actual band. The record company should not be making as much as the band, but will want a profit... but they'd still make a rather decent one at 40 cents... so we're up to 91-95 cents. Throw in a 30-50% markup so the store makes a decent profit too, and we stop just short of $1.50/album... not $1/song.
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I think the real problem here is that our culture is way too obsessed with music. Music is great, but the way this DRM war is going, you'd think people would die without their precious MP3s. Amazon is selling DRM-free music at a perfectly acceptable price. The battle is won. Shut up and enjoy it already. What I'd like to know is where is the outrage over the price of 20 oz. bottles of pop heading for $1.50 when it only costs the vendors about a dime or so?
It's all about priorities, people. Music is not a priority. Putting food on the table, keeping a roof overhead, and having clothes to wear come first. Music is entertainment, not a lifestyle, unless you're a musician. Buy your cheap music, sit back, relax, and quit complaining about this that aren't worth complaining about.
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I do love music and listen to it in the house or car. When I am outside I like hearing the background noise traffic birds kids whatever. I am new to digital music and such had a bunch of cassette tapes and albums. I use amarok to stream music (must be one to two thousand streams set up there) and can choose music from around the world. I thought that was pretty neat, I don't know how many of you stream the music from the web . I can listen to this for free and don't personally see spending a dollar a song as a deal. I also don't listen to music outside . I do hope that there is more competition though to help all that do buy music.
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Re: 160 Gigs
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sell me music please
Should I just go to a file sharing network? I've avoided that for so long, but if they really just don't want my money?
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Most of the artists I searched for (current pop, but all on major labels and not terribly obscure) had either NOTHING, or a crappy best-of collection, or crappier later-career album that nobody wants. I have a huge LP and CD collection and I'd be willing to shell out for some of the more obscure/hard-to-find tracks IF they were available.
What gives? They should have every cut, every alternate take, every unreleased demo, every out-of-print cd, available for sale. They already own the rights to it, most of it was already digitized for a cd release at some point in the last 20 years, so it would cost little to get the files up there.
Like an earlier poster lamented, do they want to sell me music or not? I'm willing to buy, but damn, what a crappy selection. (ITMS isn't any better, btw, but I figured maybe they were trying to IMPROVE on itunes, rather than repeating the same mistakes. 10 cents less for a ton of cut-out bin garbage isn't a deal...)
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Re: Re: 160 Gigs
And only 20GB or so on my 80GB is music. The rest is TV shows, some movies, and about 20GBs worth of audiobooks.
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I Do Not Agree With RJD
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Pricing is wrong
Cost, anyone with half a clue, realizes that the cost to distribute is significantly less. IE CDs are cheaper then tapes, and electronic distribution is even less the CDs.
Obviously, the cost of the physical medium is removed. As well as the costs associated with that, transportation, layers of quality control, taxes, etc.
But most important is the fact that stocks of a product no longer have to be maintained. So all the enormous cost associated with stocking are gone, since they only have to keep a single copy of the source. If your still confused, I would suggest reading about why books go out of print.
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THE PRICING REVOLUTION ALREADY CAME & WENT
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Amazon music download problems
Amazon.com MP3's are NOT READY FOR PRIME TIME
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Amazon music - not ready for prime time
I think Amazon is a reputable company and their service is always good - but - I will not go there for another mp3 download. Either I buy CDs the old fashion way or stay with itune.
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The best site
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