Record labels accuse Apple CEO Jobs of ‘double standard’ as they seek to force iTunes price increase

“If Apple boss Steve Jobs has his way, 99 cent downloads are here to stay. The CEO lashed out at ‘greedy’ record companies on Tuesday during a speech at an Apple Expo in Paris, saying that their demands for a price increase for iTunes downloads is a money grab that could encourage piracy. The labels snapped back Wednesday (September 21), accusing Jobs of a double standard,” MTV reports.

MTV reports, “Jobs said that labels are already making a higher profit on song sales through iTunes than on CDs by eliminating or decreasing the costs of manufacturing and marketing the music. ‘So if they want to raise the prices, it just means they’re getting a little greedy,’ Jobs said. Speaking on condition of anonymity, one label executive said Jobs’ desire to keep pricing at 99 cents had a very simple explanation: ‘It helps him sell iPods. When he started iTunes, he broke through that psychological barrier that consumers had and made a lot of dough doing it, but it seems like he has a monopoly and he’s become the Wal-Mart of the Internet, and he wants to retain that monopoly.'”

“The source said the comment by Jobs was likely aimed at provoking a reaction from the music industry, which is generally in favor of variable pricing, i.e., higher prices for hot, current artists and lower ones for less popular or older material,” MTV reports. “‘Music is art; it’s not a commodity,’ the source said. ‘Things that are more relevant command more money. The idea of saying it should all be 99 cents is absurd. Variable pricing is the norm in the music business and every business — even the iPod business.’ An Apple spokesperson had not returned calls for comment at press time, but another high-ranking label source said the desire for variable pricing is not about greed, but about Jobs’ lack of desire to “add something more complex to the system. Any retailer should be able to lower or raise prices if they want to,” the source said, adding that there is a ‘little bit’ of money to be made selling songs for 99 cents.”

Full article here.
This could get ugly. Who will win this Deathmatch, Steve Jobs or the music labels? With which do you think the public will side: 99-cent iTunes or higher prices?

Related articles:
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
Record labels to push Apple for higher iTunes Music Store prices in 2006? – August 05, 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

92 Comments

  1. Apple’s 99¢ model.

    Here’s a clue to the labels: If you want a variable pricing system, why don’t you LOWER THE PRICES ON OLDER MUSIC!?! They could drop the price on older/less popular songs to 79¢ and STILL make a profit.

    Steve was right when he said ‘…if they want to raise the prices, it just means they’re getting a little greedy’.

    I guess the truth hurts when it smacks you in the face.

  2. I think it is important to note that MTV has its own download service that competes with the iTunes Music Store so this story should be taken with a grain of salt.

    The Wal-Mart reference is a bit bizarre. We all know that the music industry bends over backwards to make their CDs available in Wal-Mart stores. If a certain track contains offensive lyrics it is not unheard of to re-release a censored version; ‘Let’s Get It Started’ anyone?

  3. Those record company guys really suck! First they’re totally against downloading because they can’t see beyond the end of their own pathetic marketing machine, then when someone like Steve Jobs saves their sorry asses by opening up a whole new [legal] market, they just want to start screwing the consumer again. No way dudes; Steve: stick to your guns (hey, and get the price in the UK down to US levels while you’re at it).

  4. Personally, I’m thinking that variable pricing might not be all that bad: lower prices for stuff from the good old days. and higher prices for the junk put out by today’s generation of know it-all dumb-punks.

    What, me try to start another round of MDN hysteria?

  5. This is obviously a battle being waged in public. Not pretty. Interesting to see exactly how much clout Apple has managed to get…

    Aside from being an Apple fanboy, I really do think Steve is right. What is the incentive to buy from anyone when songs are available elsewhere for free? It seems that the record companies are betting on lawsuits against P2P downloaders to stop illegal downloads. Fat chance.

  6. I wish the names of theses “sources” would be published. I’d really like to know who is out there insisting they get to decide who’s music goes for what price. We all know who Steve Jobs is, and he is quoted in every story – but we never know the names of those record company executives who are pushing the higher prices. Why don’t journalists tell us? Surely, a human being is giving them the quote – I’m not aware of a robot CEO out there. The media’s refusal to name the names is not journalism, IMHO, it’s PR!

  7. And another thing… Those extortionists over at Sunny (you know who) Records (and all the other major labels) still deduct packaging and distribution costs from artist royalties for downloads, so not only are they ripping off consumers, they’re also screwing the artists, who end up with no more than around 12-15% of the wholesale price of the track. And they plead poverty…?

  8. Earth to record companies:

    “iPods were selling like hotcakes before the iTunes store came along. And if the iTunes store goes away they will still sell like hotcakes, only people will be filling them with more illegal downloads!”

    MDN Magic Word: “Complete” as in the the record companies are complete fools.

  9. $1.20 for hot artists and .80 for has-beens? The labels have a valid point. Not all music is the same price. Not all artists are paid the same. Not all football players are paid the same. All things are not equal. Steve won’t win this battle.

  10. Hmmm …

    ‘Music is art; it’s not a commodity,’ the source said. ‘Things that are more relevant command more money.’

    What makes it more relevant? Could it be that “demand” determines relevance? So the greater the “demand”, the higher the price should be? Sounds like a commodity to me!

    Why don’t these spineless worms allow reporters to use their names? Oops! I guess that’s because they’re spineless worms. I didn’t realize people so concerned with “art” could spread such FUD.

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