Apple CEO Steve Jobs may change its iTunes prices with “the next twelve months,” charging more than 99 cents for popular songs and cutting prices for those by unknown acts, the head of EMI Music, Alain Levy, told reporters in Europe today. A recent report on CNET (broadcast) today has confirmed this report.
Carolyn Pritchard reports for MarketWatch, “The chief executive of EMI Music, Alain Levy, said EMI had discussed the issue with Apple CEO Steve Jobs and believed Apple planned to end its single-price policy for iTunes music, the Wall Street Journal reported on its Web site. ‘We are having discussions which make us believe it will happen in the next 12 months,’ Levy reportedly said at a press conference in London for the company’s half-year profit results. ‘There is a common understanding that we will have to come to a variable pricing structure. The issue is when. There is a case for superstars to have a higher price.'”
Full article here.
The Wall Street Journal also has a report (subscription only) here.
[UPDATED: 12:29pm EST: Added MarketWatch report. Corrected EMI executive to Alain Levy.]
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I don’t understand this “more popular songs cost more, less popular cost less”. Mainly because it goes against what I see when I got to say, Target, to look at CDs. There the most popular CDs are the cheapest (chart CDs by big bands can most often be purchased for $10 or less), whereas the less well known bands see no discount.
Most likely scenario – we all end up paying more for music.
that’s all i have to say about that.
Is this a time warp?
If at first you don’t succeed, try try again. Drum up public support for the plan, and maybe Apple will go along. Why the public would embrace paying more for music, I don’t know. But if record company executives were smart, they wouldn’t be in the position of having Apple able to dictate terms to them anyway.
Quote:”Steve Jobs may change its iTunes prices”
Here the most important word is ‘may’. He may or he may not. Essentially this guy doesn’t know. He’s hoping because that’s what he wants.
Such garbage.
MW: gone. this guy will be gone soon, too.
Yaah, and monkeys might fly out of my butt!
I don’t understand this either. Usually market price is set higher because something is in great demand but low supply. With digital music, there is an endless supply, so why do they think they can charge more something that’s popular?
Also, what determines the level of popularity that will result in a higher price?
I’m sorry, but this whole thing just smacks of greed. If they were going to do this in any segment of their business it should be brick and mortar stores because that’s where they have overhead, like production and shipping. iTMS costs the record companies next to nothing and they take most of the money from each sale. It’s greed, pure and simple.
It’s going to happen, but that will also probably slow sales.
If you repeat it often enough, people will believe it.
WHEN the recording studios cut a bad album, it costs them just the same as a block buster. Sure, the talent may cost them more but mostly it is the marketing and production/distribution that costs a lot.
But there are differences – M&M
” width=”19″ height=”19″ alt=”smile” style=”border:0;” /> costs more than I do to cut a single. They should be able to be compensated for that. Likewise, the market demand for 1960’s folk songs is pretty low, so why not try to meet market equilibrium by reducing costs. If nothing else, how about being able to promote a single? Instead of being either $0.99 or Free, how about “Five cent Friday” on certain tracks?
“I don’t understand this either. Usually market price is set higher because something is in great demand but low supply. With digital music, there is an endless supply, so why do they think they can charge more something that’s popular?”
Actually, with intangibles, supply is irrelevant to pricing. Only demand matters. They will charge what the market will bear.
As for comparisons to prices for top selling CDs ar Target or WalMart, this has nothing to do with the record labels. The record labels don’t discount those titles, the retailer does. In the case of Target and WalMart, they are often sold as a loss to get people into the store to buy other stuff.
The labels have always charged less for “back catalog” items than they do for new stuff.
The exact same market demographic that is attracted to “new music” also happens to be the largest group participating in LimeWire P2P swapping.
They’re not going to pay more for songs on iTunes because THEY’RE NOT PAYING AT ALL on LW.
It would be great if some of these Music Co execs would go on public record through their own media outlets so we could really see if raising rates is their real plan (without slant or bias from reporters). Could they really be stupid enough to think raising cost per song will net them more revenue?
There is usually a price to pay for convenience. Maybe enough people are hooked now that they feel they can change the price structure without losing significant business. I haven’t bought a single physical CD since iTMS opened but I’ve bought far more music had it not opened.
They’ve had a couple of years now to analyze sales data. They know what sells and what doesn’t. An extra 10¢ from new singles for a month might be a huge total figure. I don’t like the idea of paying more than 99¢ for a song but maybe the market will allow it. I’ve got a long list of older songs I haven’t bought that might prove more tempting if they dropped below 99¢.
I am in the wait and see camp on this one. Steve doesn’t want this so I am highly skeptical that it will come to pass.
This looks like what jfbiii suggests: tenderizing the meat. “Steve Jobs may……..” “May” what? Take a dump in the next three hours? Go to Paris in the next 3 months? Attend MacWorld in the next two months? Yeah, he “might” do a lot of things. Looks to me that cNET confirmed that Nicoli opened his mouth and something less than putrid nonsense came out.
I have two words for Eric Nicoli, and any other record execs, if they’re serious about this EFF’d up pricing model: Lime Wire. Greedy bastards. I’ll dump the ITMS like a hot potato if they do it, and go back to appropriating music through the P2P networks.
Most likely scenario – we all end up paying more for music.
Or less because we decide not to donate money to the recording industry by downloading songs coated in DRM and instead get our music through other channels
Tutty Fruity
In my opinion music isn’t worth more than $10 dollars an album. There are to many bands out there that suck and you get ripped off by going to the store ponying up $14-$18 dollars. The industry is greedy and this is probably a compromise for Jobs. Sucks to be a fan of music. Hopefully my favorite bands wont be considered popular.
lets be clear on this:
Steve Jobs won’t be the one making the choice, it will be the record companies — they set the wholesale price and the retailer reacts accordingly.
the slime-ball record execs will “hide” and let Apple take the heat, but unless we know what “gun” was being held to the head of Apple, we won’t know the whole story
Apple should introduce variable pricing into the iTunes Music Store!
The pricing should be 99¢ for new songs and cheaper for older less “popular” songs, like around 50¢. These f#$king greedy record companies are still making billions off CD sales. There is no overhead for the greedy record companies on digital music, a song should NEVER be more than 99¢! And for anyone who pays $2 for a 10 second ringtone, shame on you!!!!!!
Well… we can all go back to ripping music for free again… show the music biz execs whos really boss.
but only the record labels WANT to.
will pretend it was their idea or that they liked it too–and downplay the RIAA gun to their head.
Because Apple won’t want to look weak and seem like the caved. That’s bad when they go to negotiate with other kinds of companies.
Apple will make it sound like a mutual decision. But if it happens, it won’t really be mutual, and will be the RIAA.
LimeWire pffft. Poisoned is the shiznit.
Or I could just go to a Russian MP3 site and download anything for a nickel.