Apple Sued Over Gift Cards That Claim $0.99 Per Song

from the do-they-want-to-get-paid-in-gift-cards? dept

As we all know, back in April, Apple changed its iTunes pricing policy so that not all songs are $0.99. Now, some are $1.29 (and somewhere, we're told, there are a few that are $0.69). However, Apple has now been sued by a couple who claims iTunes gift cards are misleading, because they were sold claiming that iTunes songs are $0.99. The lawsuit claims that this is fraud on Apple's part, but I have a pretty difficult time believing this case gets very far.

Filed Under: fraud, gift cards, itunes, price change
Companies: apple

Apple Warns Palm Pre Users: We're Going To Break Your iTunes Syncing

from the shot-across-the-bow dept

I have to admit that I've never really understood Apple's ongoing efforts to block any sort of compatibility with both iPod devices and iTunes. You may recall a few years back the big fight between Apple and RealNetworks when Real tried to let its software connect to iPods, which Apple treated as a gross injustice. Now Palm is doing the opposite, by letting the Pre connect and sync with iTunes software by making the device pretend it's an iPod when connected to a computer. Apple, however, has responded with a neat little message that never actually mentions Palm, even if it's entirely transparent who it's about, warning people that Apple can easily break syncing when it updates its software. Of course, Apple did it in a way that it can claim wasn't meant nefariously at all. All the company really meant was to make people understand that it has no control over how the Pre syncs with iTunes, and it's possible that an update could break that syncing. Sure. Right. Except most people assume this means Apple intends to break it.

But I don't understand why. For people who bought the Palm Pre, that's only going to piss them off and drive them to use other software, taking them away from Apple's products. Why does that help Apple? Having Palm Pre syncing with iTunes increases the value of iTunes. What's wrong with that, other than being the latest example of Apple's dislike of anyone doing anything not invented in Cupertino?

Filed Under: itunes, pre, syncing
Companies: apple, palm

Why Is It So Hard To Set Up A Pan-European Music License?

from the head-scratching dept

We'd been looking at reports about the ongoing discussions about pan-European music licenses without too much interest, given that licensing bodies only ever seem to do things in their own interests. But one aspect of the talks is a little bit interesting. It's often claimed by these bodies and their supporters that they're these little non-profits working tirelessly on the behalf of musicians and songwriters, ensuring they get paid for their work. It's a convenient appearance behind which these groups hide, using it as an excuse to justify plenty of ridiculous behavior. After all, if you object to anything these groups do (supposedly) on behalf of musicians, you're trying to take away the musicians' "right to get paid", so your opinion can be marginalized and ignored.

But the reality is that many of these licensing groups are nowhere near as innocent as they'd have you believe. Their licensing schemes often do little to actually help musicians make money, and in fact, they can even make it harder for musicians to succeed. Then there are examples like that of SoundExchange, which is sitting on more than $100 million in royalties it's collected, but claims it can't pay out because it can't find the musicians to which it's owed. In addition, where do unclaimed funds end up? The RIAA.

Just for a second, let's ignore the above paragraph and assume the licensing bodies really are working in the artists' best interests. If that's the case, and the artists' best interest constitutes them getting paid, why is it so difficult to set up a pan-European license? Why does it matter who collects the money, as long as it ends up in the artists' pockets? Apple has talked before about how having to set up licensing deals in each EU country before allowing iTunes Music Store sales there means that it's simply not worth the effort in some places, and that having a pan-European license would let it open up iTMS in new places. That would be good for artists, right? More outlets for online sales means more money for them. So why hasn't the pan-European license been done? Infighting over which licensing body gets to collect the fee -- and take a cut? If these licensing bodies are all about the musicians, surely that can't be the reason, since they just want to funnel as much money as possible to the artists.

So maybe, just maybe, the licensing bodies aren't solely interested in artists' welfare and have other motives?

Filed Under: collections societies, europe, itunes, licensing, pan-european license
Companies: apple

Labels Losing Money With iTunes Variable Pricing

from the shot-yourself-in-the-foot-again,-did-ya? dept

Right before Apple finally implemented variable pricing in iTunes it wasn't hard for many to predict that it would backfire badly on the major record labels as they tried to jack up prices. So, it should come as little surprise to find out those predictions appear to be entirely accurate. New reports say that the major record labels are losing revenue from variable pricing. Unit sales are dropping to the point that revenue is less as well. That's just bad business no matter how you look at it -- and totally preventable if they knew their own business. Plenty of people made it clear that sales would drop with higher prices, and it's amazing that the execs were unable to accurately predict how much.

Sometimes when we question the motives of entertainment industry execs, people say that we're being unfair in questioning the "intelligence" behind those moves. We're told over and over again that industry execs are much smarter than we are, and they know better than we do. And yet, almost everything that has been predicted has come true... over and over again. The industry keeps doing things that at least make it appear that it has trouble understanding the long-term implications of almost every move it makes. Perhaps they are smart. And perhaps it's all part of some grand plan. But, to date, the only evidence we've seen is that nearly every move made by the industry has backfired, and resulted in less revenue coming in, while those who predicted alternative and embraced alternative business models are finding tremendous success. At what point do we stop assuming that the legacy industry execs "are smarter" and recognize that they seem too focused on the old way of doing business to recognize how to competently change course?

Filed Under: itunes, variable pricing
Companies: apple, riaa

Does Apple Own The Copyright On A File You Create Via iTunes?

from the discussion-should-be-legal dept

Last last year, the EFF publicly blasted Apple for threatening a wiki site, called BluWiki, that had been set up by a firm OdioWorks to reverse engineer interoperability with iPods and iPhones so that those devices could work with other software apps (such as Songbird), rather than being locked into iTunes. Apple had threatened the wiki site with a DMCA violation claim, and the EFF pointed out numerous problems with the DMCA claim. Now things have been kicked up a notch, as the site, along with help from the EFF have sued Apple to have the site declared legal. The EFF argument points out that an open discussion site alone is hardly violating the anti-circumvention provisions of the DMCA, but perhaps the more interesting argument is the fact that the iTunes DB file, which is at the heart of this matter, is created by each user independently and is not encrypted. There are two interesting arguments here. First, since the file is not encrypted, there is no encryption to circumvent, thus no violation of the anti-circumvention clauses. Second, since the file is created by the user and his or her own interaction with the software, Apple has no claim on the copyright of the file. If there's any copyright at all, the argument goes, it belongs to the user, and thus they should have every right to do whatever they want with it. This should be a lawsuit worth watching.

Filed Under: copyright, dmca, itunes, reverse engineering
Companies: apple, eff, odioworks

Early Results On iTunes Price Increase: Sales Down... But Revenue Up

from the interesting... dept

It's still early, but the initial estimates on the impact on iTunes of higher priced songs on iTunes is that songs that got tagged with the $1.29 price saw their overall sales rankings drop. However, the indications were that the sales drop didn't outweigh the higher price. In other words, fewer units, but more overall revenue. It'll certainly be worth watching to see if the trend continues. Of course, the report only looked at the top 100 songs, doesn't factor in other things that may have caused sales to change, and seems to be lacking certain important data. But... still... as an early snapshot of what's happening, it's good to know. In the meantime, if you're a smart up-and-coming musician who recognizes that digital music sales are a tiny fraction of what you can be earning overall in the business, you should be doing everything possible to get your songs out there at the lower price, knowing that it'll help you stand out against the higher priced options, and you'll be able to recoup the difference through the other parts of your business model.

Filed Under: itunes, sales

Looking For The $0.69 Songs On iTunes

from the gotta-dig dept

Last month, we pointed out that some of the music industry folks who actually "get it" were getting worried that when iTunes launched its variable pricing offering, labels would focus much more on jacking up prices to $1.29, rather than finding songs to offer at $0.69. Aaron Martin-Colby points out that this appears to have been quite an accurate fear. Gizmodo went looking for $0.69 songs and had a lot of trouble finding any. $1.29 songs, however, were quite easy to find. Once again, looks like the record labels are more focused on squeezing fans rather than giving them a real reason to buy.

Filed Under: itunes, music, pricing, variable pricing
Companies: apple

Music Industry Folks Worried About iTunes Variable Pricing

from the it's-going-to-annoy-people dept

Aaron Martin-Colby alerts us to an LA Times report saying that Apple's variable pricing for iTunes is set to launch on April 7th (a week later than initially planned). More interesting, however, are the reports that many music industry veterans are quite worried about this, and believe that Apple and the major record labels are making a big mistake in that it's going to piss off and annoy fans, just at a time when they should be embracing fans and giving them more of a reason to buy. The fear is that adding that extra $0.30 to many tracks will add in enough of a mental transaction cost ("is this song really worth that extra $0.30?") that it may harm sales. Some, like Ted Cohen (former EMI exec, who's now been pushing his former colleagues to finally enter the 21st century) worries that it's going to backfire in a big way:

"This will be a PR nightmare. It is for the music industry what the AIG bonuses are for the insurance industry."

And the manager of Nine Inch Nails noted something similar:

"Wouldn't it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?"

Oddly, the LA Times article claims that the new pricing scheme is "true to supply-and-demand economics," but, as Gizmodo notes, that's not true at all. The supply is infinite. So if it were true to supply-and-demand economics, the price would be free. The actual price is based on an artificially limited supply and a made up demand.

Filed Under: itunes, music, supply and demand, ted cohen, variable pricing
Companies: apple

iTunes Gets One Step Closer To Letting You Subscribe To A Band

from the sorta-maybe-possibly dept

One of the early business models we had suggested for the recording industry way back in 2003 was the idea of letting fans "subscribe" to a band -- giving them all sorts of benefits, while still making the music itself free. The idea was that you would effectively join an exclusive club, that would get you access in one way or another. It's been surprising that we haven't seen this sort of business model take off all that much, with most of the success stories so far focusing on tiered album release plans. However, it looks like Apple is moving just a little bit towards such a "subscription" offering, with its experimental "iTunes Pass" solution for the latest Depeche Mode release.

It is, as always, great to see new experiments in terms of music business models -- but, again, this one seems to get the business model backwards. Effectively, Apple and the band (or, rather, its label) are asking Depeche Mode fans to pay $9 extra for some vague promises of future benefits that aren't at all defined. And, all of it seems to be focused around the digital content (the stuff that people are a lot less interested in paying for, and which can be used -- for free -- to promote more scarce parts of a business model). Also, the "pass" isn't much of a subscription, since it only lasts for a few months. I'm sure some diehard fans will pony up, but it's not exactly a compelling reason to buy at all.

To design a good subscription plan, you could simply let anyone get the pure music for free, but offer tiered yearly plans that provide extra benefits: earlier access to the content (get the latest single before your friends!), access to a private chat room that the band actually hangs out in, opportunities to buy tickets to shows before anyone else, a chance to win backstage passes to meet the band, and (my personal favorite) an opportunity to win a private show or a "backyard" concert. Then, the more the music is out there and enjoyed, the more worthwhile it is for fans to sign up to this program. Will there be free riders? Absolutely. Will there be more free riders than members? Probably. Does it matter? Not at all. Because you'll have a situation where everyone is happy. The band is making more money than before, the band has more fans than before with more people listening to their music, and the band's true fans are more closely connected to the band. And, oh yeah, no one's suing anyone or demanding payment. It's really not that difficult.

Filed Under: business models, depeche mode, itunes, music, subscription
Companies: apple

Norway Drops Complaint Against Apple Now That Apple Dropped DRM In iTunes

from the no-problem-with-movies-then? dept

We never quite understood Norway's legal attack on Apple for its use of DRM in iTunes. Sure, using DRM was annoying and bad, but users had the choice to buy from iTunes or not, and it didn't make any sense for a government to get involved. That said, it's nice to see the government now drop the complaints after Apple announced it was dropping DRM on music files in iTunes. Still, if Norway is so upset about DRM, why isn't it still pissed off about Apple using DRM in many other areas?

Filed Under: drm, itunes, norway, open
Companies: apple