Washington Post: ‘restrictions and price remain iTunes Music Store turnoffs’

“A year ago this month, the music-downloading business came to life with the debut of Apple’s iTunes Music Store. By the numbers, the store has done outrageously well. More than 50 million songs have been downloaded off the service to both Windows and Mac OS X machines and the store is on track to hit 130 million songs a year, Apple brags,” Rob Pegoraro writes for The Washington Post.

“A flock of competitors, including stores from Roxio, RealNetworks and Wal-Mart, have followed Apple without catching up — not in ease, not in elegance and not in numbers of downloads. But the iTunes Music Store’s success hides a couple of unsettling trends. One is pricing — a lot of albums now exceed the store’s customary $9.99 price, and a few even exceed their cost as CDs in a store. The other is compatibility — though a variety of consumer-electronics devices could be made compatible with iTunes music files, the only one Apple permits is its own iPod digital-music player,” Pegoraro writes.

Full article here.

35 Comments

  1. “You know, having iPod clones out there that could use the iTMS bought music would not hurt iPod sales one bit. If anything it would keep the iPod team on their toes and keep their iPod designs at the head of the pack. Don’t license the DRM to other stores, license it to other players. These other players are not competition to iPod now. How would they be if they could use iTMS?”

    iTines music exists for one reason and one reason only..To sell iPods, not rio’s, not dells, not *ANYTHING* else. APPLE computer is a HARDWARE company. They want to sell iPods and hopefully mac hardware to go with it. The music store is NOTHING more than a “Value-Added-Service” by locking out other devices it places additional “VALUE” on the iPod when compared with other music devices. Why is this so hard to freaking understand? Coupled with iTunes and a Mac it is a wonderful way to enjoy music. It is part of a LARGER Strategy and other hardware devices quite frankly DO NOT BELONG HERE….This isn’t freaking rocket science..

  2. The RIAA is not calling the shots. They do not negotiate for record companies, music publishers or artists. Why are people confusing the RIAA’s mandate from record labels and artists (and publishers) to seek out those people that cheat, steal and otherwise thumb their nose at the rights of others to make a living and be paid for their efforts. This is a generation of people who believe that intellectual rights are non-existant and that one is entitled to music whether it’s paid for or not. The record labels are raising prices on some album product because they get pressure from the artists and their lawyers to do so. Apple has no choice. If they do what some have said and take loses on sales, then they will be out of business in no time. They are in the game to make money not to indulge inviduals that don’t want to pay. If it’s too pricey then you have alternatives. Again the RIAA is just a monitoring organziation. They do not make record company policy as regards to pricing, distribution, etc. People get your facts straight!!

  3. Quoth pkradd:

    ‘The record labels are raising prices on some album product because they get pressure from the artists and their lawyers to do so.’

    Most recording artists have a NEGATIVE net income from their labels. After paying back the moneys advanced for recording costs & promotion, they wind up having to tour endlessly just to get out of debt to the record company. These people are not in a position to put ‘pressure’ on labels to raise prices, or they would have done it long ago.

    Considering that the typical recording contract gives the artist a royalty not exceeding 10% of retail, this is NOT a factor driving iTMS prices. Put the blame squarely on the labels where it belongs, thank you . . . & the major labels, taken collectively, are the RIAA by another name. It’s all the same cartel.

  4. As an employee in the record industry I have a few comments. I usually get free CDs from friends that work at other labels. If I can’t get it for free, I’ll either find the CD used for under $10 or download it p2p until I get the real CD. iTunes store is crap. Sound quality might be good for the mainstream, but not for me and my friends. Plus, we don’t want ANY restrictions on our songs.

    This is pretty much the way it goes for me and all my friends:
    We are all mostly on Mac and all have ipods, however none of us like the idea of paying more than $10 for ANY CD or itunes download. We will go to a used CD store and buy a promo some kid that works at a record label sold cause he’s only getting paid minimum wage. If we can’t find the CD used, we’ll download it for free until the CD becomes available. iTunes AAC files sound quality sucks to our ears so it is VERY rare that any of us will go this route. Plus, the AAC restrictions. We are all in our late 20s early 30s and most of us still enjoy the CD artwork that comes with a real CD. It’s an extension of the artists vision, and it just seems like you are missing something with just the tracks. Kids growing up these days don’t seem to care I guess — but that’s why downloading tracks is still a big turnoff for me and my friends.

    So my point? $10 is the most we will pay. EVER. or we get it for free…

  5. Fandango,
    The only problem is the big labels have always been greedy. I remember back when LP’s where about to hit $8.99 list, and CD’s made their debut at $14.99 to much uproar. The big labels, at that time, promised that once their initial investment in retooling for CD production was recouped, and competition kicked in, the price of CD’s would naturally come down. Yeah, like that ever happened.

    I, like you, stopped spending large portions of my disposable income on music a few years ago. Higher and higher prices, along with big label manipulation of mediocre talent caused me to basically give up. I mean, how many big breasted, blonde, cloned pop singers can a market support? As many as it takes to squeeze every penny out of the music buying public as possible.

    The iPod and iTMS got me interested in music again. I have purchased more music in the last 3 months than I had in the previous 5 years. For me, stealing music is not an option. I have never, and will never use a free music sharing service. I feel it’s just wrong. I don’t rip off the recording industry, and I don’t appreciate being ripped off by them. If the pricing trend continues, I’ll just do what I did before and stop buying. Their loss, not mine.

  6. This article carries much of the anti-Apple slant of Cnet, ZDNet etc. Apple is not likely to be behind the silly pricing- it is ludicrous to pay more for a download when you are missing all the extras that a CD gives you- but the second point of incompatibility is a moot point because you can convert the file or burn a CD and export it. BTW, I have noticed that the latest downloads have more dynamic range and less congestion and distortion than was apparent early in the AAC format. In any case, this article is another dig at Apple without considering the problems Apple would have by licensing WMA� unless Apple does some sort of not very obvious killer deal with Microsoft. Who knows perhaps MS will license OS X?

  7. The Washington Post is the only newspaper in America that denied how brilliant M. Butterfly was when it came out in theaters. They are also the people that turned down a couple of very good restaurants, plays, movies, (and I don’t want to go further)…
    I think it is safe to say that some conservative B*** really don’t know what to put in their trashy little newspaper…

  8. There wasn’t much in the way of new products at the Spring 2004 Intel Developer Forum (IDF) in Taipei last week, but handheld multimedia was given a boost.

    Instead, Burns thinks the Prescott is hot, although not in thermal terms. He skirted the question of big heat output from the processor with “it depends on what you call hot”, without giving any specifics about cooling technologies.

    Intel watchers will be interested to learn that Burns thinks “Steve is a great marketer”. Steve being Jobs of Apple Computer, of course. The Cupertino company’s highly successful iTunes pay-per-tune was mentioned by Burns as something people want (and which the recording industry doesn’t understand), but at the same time he denied it was an inspiration for Intel.

    Mac OS X got the thumbs up from Burns, however. Being a hands-on sort of guy, Burns says he buys Macs to check them out — and quickly added that he sells them on when he’s done with them. Burns is clearly keen on seeing Mac OS X on the Intel platform and when told that “there’s no hope of that, presumably”, said “never say never”.

  9. Paul: You obviously don’t know much about the Post; it’s one of the more liberal papers in America, right up there with the New York Times. Maybe you’re confusing it with The Washington Times, a very conservative paper of similar name.

    I’m not an iTunes Music Store fan for full albums, as I usually want VBR MP3s for quality listening, though 128kbps AAC does sound pretty good. However, the iTMS is very convenient for checking out a song or two from an album at decent quality for cheap before buying the CD itself (which I prefer).

    The iTMS songs will never play on anything besides an iPod because the iPod is what makes money for Apple. They have managed to get a very small profit out of the iTMS after paying the labels’ cut, and the bandwidth/other costs associated with running it. However, it is VERY small, and the real money is in them selling the iPod, an excellent device with excellent profit margins for Apple.

    They’re number one in both areas (store and device), and for months people have been saying that any one of a number of competitors are going to overtake them, and it hasn’t happened. If the tide starts to shift, I’m sure Apple will consider some other measures, but for now they’re sitting pretty. I predict a next-gen iPod with added functionality before the end of the year, and/or a $50 price drop across the line as the components used to build them get cheaper, so they can remain competitive looking compared to the other players out there.

  10. To “Refute the Nonsense”:

    First, there are no parallels whatsoever between the iPod-iTunes combination and a Ford mustang, so your analogy makes no sense. Think about it.

    Second, I find it very poor form to see one Mac user trying to make fun of another. It’s fine to make fun of Windoze users, and even Rio/DJ users. But please, save your sarcasm for them, not for card-carrying iPod/Mac users.

    I was trying to make a serious point that ultimately, the market is going to settle on one digital audio standard or another (if you want to try a parallel with cars, the closest you can get is to view the internal combustion engine as the standard “player” and gasoline as the prevailing digital audio input). Apple wants to make sure it comes out on top this time around and outflanks Microsoft as it tries to roll out a “good enough” version of its own. Apple has a huge head start… much farther ahead than it was with the Mac OS and Macintosh computer. But for those of us who’ve read the history, the potential parallels are disturbing. Microsoft proved you can make money by licensing software standards to other hardware companies… Why can’t Apple make money by licensing its digital music software in the same way?

    Anyway, what really scares me is people who dismiss this possibility out of hand as if it’s not even worth debating. I hope Steve Jobs isn’t in this camp, but I fear he may be.

  11. Mike said: “apple should just bite the bullet and call those albums losses..they get charged more by the record companies for certain very very specific cases… and apple says that’s why the 999 is broken..”

    I took a peek at the top 100 downloaded albums at the iTMS. If you throw out the roughly 15 EPs, then about 35 of the 85 remaining albums (41%) are priced higher than $9.99. Seems to be quite a bit more than very specific cases. More like an epidemic!

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