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Pearls of wisdom from our beloved readers
Back to the songs. This time the question is pricing and the complainant is Apple. Seems Mr, Jobs ain't too happy about record labels demanding that Apple's iTunes store ups the price of the songs available for downloading:
I work for a company that has an online music shop. I can (anonymously) confirm, that there are differential prices on songs, with the newest songs being more expensive than the back catalogue.
But since the back catalogue makes up over 80% of the sales we can still make a profit even if we lose on the newest songs.
I am sure it is the same for Apple.
Initially we had differential prices, but competition forced us to go the route of fixed pricing.
All music labels can't get together and agree to a common, coordinated price increase because doing so would break antitrust laws. Therefore, any plans to increase pricing must be taking place on a label-by-label basis.
Here's what Apple should do to handle such a situation. Say label A comes to Apple and says we're increasing our price from X cents (or pence) per song to Y cents (or pence) per song. Apple should simply say "okay" and then quadruple the price of songs from that label on ITMS, with a note on ITMS pages for that labels songs saying that the label has greedily increased its price per song simply to increase profits, and so Apple has decided to likewise greedily increase its price per song for songs from that label to increase profits.
Sales of songs from that label would drop to somewhere in the neighborhood of zero. I'm sure that ITMS sales are very important to labels, even if volumes are still modest at the moment. Not only are there no marketing costs (as you pointed out in your article) but there are also no material (media/packaging) costs, no distribution costs, etc. Perhaps a move like this on Apple's part would cause them to reconsider.
If anything, prices still need to come down. As is rightly pointed out in the article, the music studios are making more money from digital downloads than their CD counterparts. How can this be right? The digital version should be the no-frills, basic version of the product and the CD should be the super-deluxe premium version (with music videos, case art, etc.)
Until this is the case, there is no way they can justify charging the same amount (or, indeed, more) for digital as for CD. I'm sure they won't put CD prices up (as that would encourage bootlegging), so digital prices have to come down. When that happens I might consider buying digital music when I don't want the extra bits you get with CD.
Until then, I'll stick with my physical media, booklets and all.
(As for calling people who illegally distribute music 'pirates', we're making them out to be better than they are. Yes, it used to be a good term but in recent years (curse thee Johnny Depp!) we've come to see pirates as the good guys rather than what they really were - raping, murdering thieves. Pirates in the 60s were sticking it to the man (as it were) and again were seen as the good guys.
People who illegally distribute music are *not* the good guys! Why not start calling them what they really are - thieves - and have done with it?)