“The gloves are off in the battle between Apple CEO Steve Jobs and the music industry over the price of downloaded songs,” Red Herring reports. “On Thursday, one of the music industry’s highest-profile executives responded publicly to Mr. Jobs’ charges, made earlier in the week, that they were ‘greedy’ when they requested a price hike for downloaded songs.”
Red Herring reports, “At an investors’ conference in New York, Warner Music Group CEO Edgar Bronfman Jr. said the price of downloaded songs should vary depending on the popularity of the songs and the artists. He called Apple’s across-the-board $0.99-per-song charge unfair. ‘There’s no content that I know of that does not have variable pricing,’ said Mr. Bronfman at the Goldman Sachs Communacopia investor conference. ‘Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing.'”
Red Herring reports, “Mr. Bronfman’s remarks came in response to Mr. Jobs’ statement on Tuesday blasting the music industry for pushing for an increase in the price of downloaded music, saying their demands, if met, would serve to encourage piracy, which has eaten into the industry’s profits. ‘We are selling our songs through iPod, but we don’t have a share of iPod’s revenue,’ he said. ‘We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only. We have to keep thinking how we are going to monetize our product for our shareholders,’ added Mr. Bronfman. ‘We are the arms supplier in the device wars between Samsung, Sony, Apple, and others.'”
Full article here.
Advertisement: Apple iPod nano. 1,000 songs. Impossibly small. From $199. Free shipping.
Related articles:
Analyst: Apple has upper hand in iTunes Music Store licensing negotiations with music labels – September 23, 2005
Steve Jobs plays high-stakes poker with greedy record labels – September 22, 2005
Record labels accuse Apple CEO Jobs of ‘double standard’ as they seek to force iTunes price increase – September 21, 2005
Apple CEO Steve Jobs to repel ‘greedy’ record companies’ demands for higher iTunes prices – September 21, 2005
Apple CEO Steve Jobs vows to stand firm in face of ‘greedy’ record companies – September 20, 2005
NYT’s Pogue to record companies: it’d be idiotic to mess with Apple iTunes Music Store prices – August 31, 2005
Apple CEO Steve Jobs prepares for pivotal fight on digital music prices – August 28, 2005
BusinessWeek: Apple unlikely to launch music subscription service – August 15, 2005
Record labels to push Apple for higher iTunes Music Store prices in 2006? – August 05, 2005
Study shows Apple iTunes Music Store pay-per-download model preferred over subscription service – April 11, 2005
Record labels look to raise iTunes wholesale prices, music industry fears Apple’s market domination – March 05, 2005
Report: Apple CEO Steve Jobs ‘angered’ as music labels try to raise prices for downloads – February 28, 2005
Report: Music labels delay Euro iTunes Music Store fearing Apple domination – May 05, 2004
Greedy Big Five music labels looking to jack up iTunes songs to $2.49 each? – April 22, 2004
I will start p2p if iTunes ups the amount. I never had to buy a Music CD and the only reason why I do it now is because of the iPod and iTunes Music store.
Warner CEO Edgar Bronfman Jr wants his own e-store. He’s come out for it a lot, in speeches to shareholder, in speeches to college students, basically everywhere. I can bet that every other exec out there wants their own store, and when sony started theirs they all crossed their fingers. Except, sony failed. Big time.
And now they are at Apples mercy. At least untill Apple liscenses their DRM, or another company out sells apples iPod. Without one of those two events happening Warner or any other music company would be fools to leave. Because they know that they cant arrange a mass walkout. Someone will stay and that company will make a mint. Is apple unfair, hell yes and its about time someone was unfair to the recording industry, one of the most corrupt in the nation and facing decreased sales in stores and brand new payola scandels on commercial radio networks.
They are between a rock and a hardplace right now and I dont think they will get what they want.
“We are selling our songs through iPod, but we don’t have a share of iPod’s revenue … We want to share in those revenue streams”
Apparently this is happening all over. Duracell is reportedly trying to force battery powered dildo companies to share their profits.
I swear … this has to be one of the stupidest comments made by a music exec. Apple hands them a brand new revenue stream, helps turn around their slumping existing revenue streams, and these fools now want to juice Apple for their trouble.
This is hateful behaviour, indicative of rather low bsuiness intelligence. In private they might pine for a piece of the iPod pie, but to come out and say it in public and back it up with such a lame argument?
One company demanding on uniform pricing of products it distributes is not “price fixing” in the monopolistic sense. Any competitor of that company can decide to undercut or overcharge when compared to that company, and suppliers can decide to sell to someone else.
A group of companies from within an industry agreeing to fix prices to control the market is price fixing and is unlawful from what I understand … unless you happened to belong to the RIAA.
The 99 cent price is fair. It does not cost the record company anymore money to make a popular song versus one that isn’t. To price a popular song at a higher price is greed plain and simple.
The compromise: Apple agrees to variable pricing:
$1.99 for a song during its first 2 weeks of release.
$.99 after that
$.79 for a song released more than 5 years ago.
Record labels agree to up the bitrate, so the crap we’re downloading sounds good again.
Eh?
Titanic and Star Wars cost the same to see at the theatre as Howard the Duck
We don’t want to charge you more on every song, just the songs everyone is buying. We really want to charge LESS on all our worthless songs that no one is buying. But that bully Steve won’t let us!
And it’s not fair that Steve isn’t writing us a check for every iPod he sells.
It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair! It’s not fair!
Why dont the record companies go the full whack and allow proper price competition on song sales instead of acting like a price fixing cartel? In any other business the antics of these middlemen would be deemed anti-competitive, but in the music industry it is OK to let artits work be pimped around like this ….
Well,
When the record companies can create their own distribution channel as effectively as Apple has created one for them, then they can charge whatever they want.
The record companies have never found themselves is this position before. They don’t know how persuade with anything other than a goon. Well, Apple isn’t the corner record shop!
Keep in mind that Time Warner and Microsoft are ” Partnering” on movies, music and other multimedia “projects” (i.e. Mediaplayer). So, there is an extra incentive for Warner Music and Mr. Bronfman Jr. to carry out the bidding of their new masters in Redmond Washington. It’s a well crafted multi-pronged approach with the likes of Sony and others in the music/movie industry to bring down Apple’s copy protection, and the iPod monopoly. Plus, Apple will incorporate that same copy protection in digital movie distribution, using a similar model as the iTunes store, and maybe even for On Demand delivery services too.
Remember there was a time before DSL and cable modems when downloading music online was just to troublesome and/or time consuming. Movies are not that far away. (How’s all that for a conspiracy theory)
Think about it these two:
Sony Japan – no iTunes license for music
Sony Australia – no iTunes license for music
These are just a start, other “media” companies are making it difficult for Apple to license music for distribution in different countries making things very difficult.
King Alvarez,
“Max,
(Quoting Max): “Don’t forget the ipod plays MP3 – you can get that format anywhere -free”
Not from an online store, only through CDs”
That is incorrect. There are a number of stores that sell mp3s with no DRM. They do not have catalogs the size of the majors, but they serve niche markets better than any of the big stores, includeing iTMS. Example: Bleep.com
You want money every time Steve sells an iPod?!?!?!
I thought that was a joke the first time I read it. Good God, is there anyone you won’t screw?
To “The movies do it”
Good point on Howard the Duck
Its strange that the ones would benefit more from continuing to be on the ITMS, the recording artists, haven’t come forward for or against the .99 per song.
How about this scenario:
The recording artists start contracting directly with Apple to put their music onto ITMS. They would get more per dollar than they are now. This I believe was done in Japan when Sony was holding out, one of their popular Japanese artists wanted his music on ITMS.
Take this a liitle further. How about all those wannabe basement bands. Sign a 6mo or 1yr contract with Apple to put their music on ITMS. No marketing, no big initial investment just a 1 time setup fee, just a listing on a ‘new band’ section of ITMS.
just a thought
iPods sell the music, not the other way round …. remember, you can get he music for free if you want.
Whining to try and get more money out of people. The greedy get greedier and he is just trying to justify it.
wrong,
Yes, I overlooked those types of stores. But that offers little consolation.
The movies do it,
You’re limiting your scope. All new release movies may charge the same amount, but you can now watch SW III for $2.00. Lower admission for older movies = variable pricing.
Mr. Bronfman said, “Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past.”
How about some songs at $0.79, $0.59, $0.39, $0.19, $0.09? No he wants $0.99 and up!
Half of a billion song sold, is a good indicator that the present scheme works damn well.
“To price a popular song at a higher price is greed plain and simple.”
And yet… We pay $20+ for DVD’s of good movies, but can pick crappy ones out of the $5 bin. It’s all about percieved value.
Mr. Bronfman, your a idiot
Music artists, don’t sign with Sony or Warner, you have a choice of music labels that want your buisness.
iTunes sells over 2.8 million songs a day and is a important revenue stream.
Apple has hundreds of music labels, don’t lock yourselves into a exclusive label contract.
Do iTunes contract seperatly with something like cdbaby.com. which will give you 91% of the online profits.
This is what the artists are doing in Japan.
gypsy said:
“How about this scenario:
The recording artists start contracting directly with Apple to put their music onto ITMS. They would get more per dollar than they are now. This I believe was done in Japan when Sony was holding out, one of their popular Japanese artists wanted his music on ITMS.”
—-
That is EXACTLY what is gong to happen and the music industry doesn’t even see what is right in their face! Steve is setting them up to be seen as greedy and focused only on themselves. When someone like Madonna or U2 or another big name artist that does not NEED the music indusry to promote them anymore signs on directly with iTunes, Inc. (not Apple due to the Beatles thing…), the rest of the artists will see how much more money they can make by getting out of their restrictive contracts and will come over in droves, or else it will finally break the money-focused attitude of the music industry. They might actually have to start marketing their services to artists rather than remian the gatekeepers of what consumers get to listen to. It may take a few years for the transition to be complete, but next Spring will be the first chime on the clock showing high noon….
SirROM
PLEASE don’t fsck it up by screwing the pricing scheme.. it’s awesome..
Only a stooge like Thurrott wants iTUnes to fsck up their pricing (so.. WMA services will start to win..)
This is such bullsh*t. To date I have never stole music thru the internet but if the record companies get their way I just may have to consider starting. And it really burns me up when they always trot out the “poor artist” line. The artists are being totally screwed by the Labels and make peanuts off the royalties. The vast majority of the cash goes to the record companies. Well, screw you, assholes!
Bronfman crying for help somehow does not evoke any sympathy, even if, assuming Apple is unfair. I think for once the music execs are on the receiving end of what they have inflicted on singers and artists for years. Read the history of any blues singer from the past for example. Even how the copyrights are structured is mindboggling. The only option out for them is to actually invent an iPod killer device, control the IP from slipping into the wrong hands, hope everyone buys the device, and then you can charge whatever you want. Good luck.
ne company demanding on uniform pricing of products it distributes is not “price fixing” in the monopolistic sense. Any competitor of that company can decide to undercut or overcharge when compared to that company, and suppliers can decide to sell to someone else.
A group of companies from within an industry agreeing to fix prices to control the market is price fixing and is unlawful from what I understand … unless you happened to belong to the RIAA.
Last time is shopped brick and mortar, I didn’t see Sony’s CD’s priced differently than Warner, EMI, BMG, etc….
yup
And in bookstores, the bestsellers are DISCOUNTED.