Price hike hits Apple's iTunes Store

[AppleInsider]

Tuesday marks the end of Apple's one-price-fits-all model at the iTunes Store, where songs will now fall into one of three pricing tiers, with many of the most popular tracks commanding a 30% increase from 99 cents to $1.29.

Many songs will remain priced at 99 cents while some older and less popular tracks are expected to fall to 69 cents. But as of Tuesday morning, those cheaper songs were few and far between. Instead, Apple appears to have made price increases its first priority.

As of press time, 6 of the top 10 and 29 of the top 100 songs on the digital download service saw their price increase 30 cents to a $1.29. Many of those same songs remain at 99 cents over at the Cupertino-based company's largest digital rival, the Amazon MP3 Store, where none of the top 10 singles and only 10 of the top 100 songs are priced above 99 cents.

Apple has long placed the blame for this week's hikes on the record labels, who are struggling to adjust to the digital marketplace for their content now controlled by iTunes, which last year became the world's largest retailer of music.

The iTunes operator said back in January that this week's changes would correlated directly with new prices commanded by record labels, who otherwise would not have been willing to make their music catalogs available on the service in unprotected iTunes Plus format.

"[B]ased on what the music labels charge Apple, songs on iTunes will be available at one of three price points -- 69 cents, 99 cents and $1.29 -- with many more songs priced at 69 cents than $1.29," said Apple chief executive Steve Jobs.

While iTunes has rejuvenated interest in music and drawn in buyers that may have joined the masses of pirates on peer-to-peer file sharing networks, it's fragmented sales for labels at the same time. The lone sore spot has been a loss of high-margin album sales with consumers instead taking advantage of iTunes' a-la-carte format to cherry pick their favorite tracks without forking over the full $10+ that the service -- and traditional brick-and-mortar music stores -- charge for an artist's complete work.

As such, the labels are now scrambling to find ways to cash in on their most popular offerings. One approach has been a concept called iTunes Pass. Similar to an iTunes Season Pass for TV shows, the digital offering combines upcoming album releases with exclusive singles, videos, and other media that will be made available to subscribes over the period of several weeks or months for a premium price.

The top 20 songs and their prices on Apple's iTunes Store as of April 7th.

In February, Warner's Reprise Records kicked-off the program with an $18.99 iTunes Pass that coincided with the release of Depeche Mode's new album Sounds of the Universe. According to the Wall Street Journal, this week will see the second installment of an iTunes Pass -- a $17 subscription from Sony Corp.'s Epic Records for the pop band the Fray.

"It's one more thing that helps offset the negative," said Apple iTunes chief Eddy Cue, who sees iTunes Pass as a means for record labels to keep their album releases relevant for longer periods of time. "[Once a traditional album] gets out the door, you can't update it, you can't refresh it, you can't do anything to it."

[ View this article at AppleInsider.com ]

[SmilinGoat]

this is why i'll be using Amazon.com from here on out.

[GTL215]

Originally Posted by SmilinGoat

this is why i'll be using Amazon.com from here on out.

unfortunately, that means the record labels' strong-arm tactics to take down apple's dominance will prove successful.

[themoonisdown09]

Where are the $0.69 songs?

I don't buy from iTunes anyways. I'd rather buy the physical CD instead. Once iTunes offers all of the songs in a lossless format, I'll reconsider.

[saarek]

The record lables are simply shooting themselves in the foot, I was finding it hard to resist free p2p networks as it was, we already pay more than the US in the UK, these price hikes are just painful.

I'll check out Amazon as well.

[Mr Macintosh]

Greed will be the downfall of the joy of music. I buy some tracks from iTunes but mostly rent movies and buy some episodes of TV shows. I will not be paying extra for a top 20 song, I will just buy it from another service for .99 cents or less. iTunes made it so easy to get what I wanted, now the music majors are trying to make it difficult again...

[realmike15]

i don't mind this at all. maybe this will get people to stop listening to awful music that dominates the top 100... could be a positive change lol.

[Booga]

Originally Posted by themoonisdown09

Where are the $0.69 songs?

I don't buy from iTunes anyways. I'd rather buy the physical CD instead. Once iTunes offers all of the songs in a lossless format, I'll reconsider.

CDs aren't lossless, so I'm not sure why you expect more from your online music.

[realmike15]

Originally Posted by Booga

CDs aren't lossless, so I'm not sure why you expect more from your online music.

CDs are lossless my friend. i don't know who told you that but they have not a clue what they're talking about

CDs are 16-bit 44.1kHz sample rate. there is no compression of any kind.

[wheelhot]

ah crap, just as I am going to download something from iTunes Store (once the server is up for Malaysian), bad move Apple, let see how its quarterly iTunes music sale gives out cause if Amazon stays at 0.99, say bye bye to your #1 online music download spot.

[polymnia]

Originally Posted by Booga

CDs aren't lossless, so I'm not sure why you expect more from your online music.

What about CDs isn't lossless? If you consider a 44khz 16 bit uncompressed bitstream to be lossless, then CDs are lossless!

Granted, music is actually recorded and mastered at higher bitrates, but always with the intention to resample to the standard CD bitrate for mass distribution.

[slapppy]

Originally Posted by GTL215

unfortunately, that means the record labels' strong-arm tactics to take down apple's dominance will prove successful.

Exactly correct.

[zindako]

Guess I will try other vendors for purchasable online music besides iTunes, music labels have always been the evil empire.

[Virgil-TB2]

Originally Posted by AppleInsider

Tuesday marks the end of Apple's one-price-fits-all model at the iTunes Store, where songs will now fall into one of three pricing tiers, with many of the most popular tracks commanding a 30% increase from 99 cents to $1.29...

This is a lose-lose proposition for everyone but the labels.

iTunes already had a somewhat limited selection, this morning it has dropped by about 15% by removing all the tracks that the studios were not willing to offer DRM free. I listen to a lot of J-pop right now for instance and some of the biggest groups have literally hundreds of albums out but what's available in iTunes? Two or three at most, and half of those disappeared last night because they are "imports" in the eyes of studio execs who are still living in the 60's.

Curiously though, I'd like to know where the heck all the $.69 tracks are???

I looked up a dozen or two groups from my distant youth in the 70's and about ten from the 1960's and they are all $.99 not $.69. If 45 year old tracks by people who are mostly dead now recorded at studios that no longer exist and owned by people who weren't alive when they were recorded are not $.69 tracks what are?

Just for laughs look up "Glenn Miller" (he died almost 75 years ago).
125 tracks, all of them $.99.

Because he's so "current" right?

[sapporobabyrtrns]

Amazon to the rescue, not to mention Limewire.

[NasserAE]

Originally Posted by sapporobabyrtrns

Amazon to the rescue, not to mention Limewire.

Since the record labels were successful in twisting Apple arm, I think Amazon will follow shortly.

[jenkman91]

Originally Posted by sapporobabyrtrns

Amazon to the rescue, not to mention Limewire.

Amazon is good.

Limewire is good too if you want to be caught by the FBI who will then seize all of your computers slap you with a huge fine, and then throw your ass in federal prison. it does not matter how many firewalls you have. The government can always fine you. trust me... I have learned the hard way.

Its people like you that make music retailers such as iTunes raise their prices. (as explained in the story)

[striker_kk]

Apple is going to lose business in this segment.
Certainly Apple must have figured out this already!!
Still they did hike the price..

What possibly could be the WAY for apple to remain dominant?

[Truntru]

Why don't more people use the zune pass? For $15/month (up to 3 zunes and 3 computers) you can download as much temporary music as you would like, and also keep in your collection forever 10 songs. You can't find a better deal anywhere.

[slapppy]

The general pubic that uses iTunes will blame Apple for the price hike.

[Halvri]

Originally Posted by GTL215

unfortunately, that means the record labels' strong-arm tactics to take down apple's dominance will prove successful.

Exactly, by trying to make iTunes less relevant, all the record labels are trying to do is keep Apple from being able to bargain them down. Which ostensibly means that by going to Amazon what you're doing is opening the door to future price hikes across all services.

[slapppy]

Originally Posted by striker_kk

Apple is going to lose business in this segment.
Certainly Apple must have figured out this already!!
Still they did hike the price..

What possibly could be the WAY for apple to remain dominant?

Huh? Are you saying Apple is to blame for raising these prices?

[Halvri]

Originally Posted by Truntru

Why don't more people use the zune pass? For $15/month (up to 3 zunes and 3 computers) you can download as much temporary music as you would like, and also keep in your collection forever 10 songs. You can't find a better deal anywhere.

Because none of us are going to pay $5/month to rent music and because the Zune, especially now, is completely and utterly irrelevant. Subscription services like that will always fail.

[Truntru]

Originally Posted by Halvri

Because none of us are going to pay $5/month to rent music and because the Zune, especially now, is completely and utterly irrelevant. Subscription services like that will always fail.

The way I see it is that it is only $2.50 / month / person (I share with my wife) for all the music that I want. Seems like a great deal... what I don't feel so good about is paying $50/month and still get overage charges from the cell phone companies.

[striker_kk]

Originally Posted by slapppy

Huh? Are you saying Apple is to blame for raising these prices?

Certainly NO.
BUT it is facing the consequences, isn't it?

[DimMok]

Price hike aside....its still pretty amazing how Apple has come to be the world's largest music retailer.
Lets hope this move doesnt take that title away.

I personally still buy cd's for 9.99

[Halvri]

Originally Posted by zindako

Guess I will try other vendors for purchasable online music besides iTunes, music labels have always been the evil empire.

Yes they have, so why are you now going to aid them in their quest? I know it will cost you more, but why not be principled and stop them dead in their tracks? Shopping around simply allows them to take the next few years to make the prices of all online vendors slowly creep up. Once the giants fall, so will the little guys.

[gabriel_bl]

I believe the .99$ was psychologically much smaller price than it really was. I bought some songs just because I liked them and never thought about the price. Yes I noticed the 5$, 10$ invoice, but when I bought the song I didn't care.

Now when I hear some song and I like it, from the same CD I usually buy 2-3 songs that could end up to be nearly 4$. I will question my decision and think if it is not better to buy a whole CD somewhere for 9$ and I will wait and look for a deal. While the time goes by and the radios play the same songs I will hear the song enough time to not want to buy it anymore. But I will like other song that and I will be in the same magic circle.

There will be less spontaneous shoppers. How many shoppers fall into that category, I cannot guess, but I belong to that category. When I start to think about if I need something I will end up changing my decision, as most of the stuff we don't need. And latest songs are one of those things - especially now when you can turn your internet radio on and listen to top 20 songs nonstop.

[Akac]

Originally Posted by polymnia

What about CDs isn't lossless? If you consider a 44khz 16 bit uncompressed bitstream to be lossless, then CDs are lossless!

Granted, music is actually recorded and mastered at higher bitrates, but always with the intention to resample to the standard CD bitrate for mass distribution.

You just pointed it out. The fact that it was downsampled means CDs have a loss of quality compared to the master. Apple Lossless format would give you the original master quality. So the question is - why are you asking for lossless format (Apple Lossless) when you don't get it now (CD)?

[Halvri]

Originally Posted by Truntru

The way I see it is that it is only $2.50 / month / person (I share with my wife) for all the music that I want. Seems like a great deal... what I don't feel so good about is paying $50/month and still get overage charges from the cell phone companies.

Regardless, what I'm trying to get across is that it allows music studios to assume royalties on songs they aren't even allowing you to keep. It's also one of the ways they screw artists out of their fair share by labeling it as a non-traditional sale which the labels get to keep substantially more of than a typical purchase.

As to cell phone companies, I find their cancellation fees alot more insane. The idea that switching to another carrier because of terrible service should cost one the next six months of what they would have otherwise paid is downright insulting.

[GTL215]

Originally Posted by Truntru

Why don't more people use the zune pass? For $15/month (up to 3 zunes and 3 computers) you can download as much temporary music as you would like, and also keep in your collection forever 10 songs. You can't find a better deal anywhere.

The market has repeatedly shown subscription services are not successful. Talk about anti-consumer - "pay us every month for the rest of your life, or lose all your music."

[PG4G]

The goal of music companies is simply to take down iTunes. iTunes poses a risk to their control. They decided to make this a no-win situation. They wouldn't go DRM free with price hikes, and they'll do it elsewhere.

This puts Apple between a rock and a hard place. Stay DRM or hike prices.

Its kind of sad that in this battle for wills, the best content distributor in the world is going to get sorely hurt by greedy executives.

The right way to make money is to make more good music. The wrong way is to charge more for already overpriced tracks, charging royalty tarriffs for CD production costs that don't exist, and expecting users to shoulder the costs.

Bad move music companies. You just showed the world how greedy you really are.

[PG4G]

The goal of music companies is simply to take down iTunes. iTunes poses a risk to their control. They decided to make this a no-win situation. They wouldn't go DRM free with price hikes, and they'll do it elsewhere.

This puts Apple between a rock and a hard place. Stay DRM or hike prices.

Its kind of sad that in this battle for wills, the best content distributor in the world is going to get sorely hurt by greedy executives.

The right way to make money is to make more good music. The wrong way is to charge more for already overpriced tracks, charging royalty tarriffs for CD production costs that don't exist, and expecting users to shoulder the costs.

Bad move music companies. You just showed the world how greedy you really are.

[Halvri]

Originally Posted by Booga

CDs aren't lossless, so I'm not sure why you expect more from your online music.

Agreed, go listen to a DVD-Audio disc and see if you still think CDs are lossless.

[GTL215]

Originally Posted by Halvri

As to cell phone companies, I find their cancellation fees alot more insane. The idea that switching to another carrier because of terrible service should cost one the next six months of what they would have otherwise paid is downright insulting.

Cancellation fees exist to protect carriers against losses, since they subsidize the purchase of the phone. If you don't want a contract, then pay full price for the phone.

[Truntru]

Originally Posted by GTL215

The market has repeatedly shown subscription services are not successful. Talk about anti-consumer - "pay us every month for the rest of your life, or lose all your music."

Well... I think that wouldn't be totally true... you still get to keep 10 songs....

[Lorre]

Originally Posted by Virgil-TB2

This is a lose-lose proposition for everyone but the labels.

iTunes already had a somewhat limited selection, this morning it has dropped by about 15% by removing all the tracks that the studios were not willing to offer DRM free. I listen to a lot of J-pop right now for instance and some of the biggest groups have literally hundreds of albums out but what's available in iTunes? Two or three at most, and half of those disappeared last night because they are "imports" in the eyes of studio execs who are still living in the 60's.

Curiously though, I'd like to know where the heck all the $.69 tracks are???

I looked up a dozen or two groups from my distant youth in the 70's and about ten from the 1960's and they are all $.99 not $.69. If 45 year old tracks by people who are mostly dead now recorded at studios that no longer exist and owned by people who weren't alive when they were recorded are not $.69 tracks what are?

Just for laughs look up "Glenn Miller" (he died almost 75 years ago).
125 tracks, all of them $.99.

Because he's so "current" right?

Idk if this applies to all music stores worldwide, but here in Belgium, Supertramp's Breakfast in America album is a mix of $0.69, 0.99 and 1.29 songs... this is just awfull. It's very confusing for en users, and I really can't find a way to justify asking $1.29 for a 4 MegaByte file of a song that already made the record company milions upon milions over the years ...

When Apple announced this first I was happy since I thought it'd mean all my favourite bands from the 70s would be discounted and that contemporary RnB junk would be hiked. Alas, my faith in the record companies was too big. And then they wonder why people keep on pirating...

[dmon]

I think a lot of people are overreacting here. I did a cursory search of the iTunes Store and it seems that a lot of (if not most) popular tracks are still 99 cents. The certainly the vast majority of ALL of the songs are still 99 cents.

Importantly, albums are still $9.99 - which is still a bargain compared to purchasing CDs. Personally I like the idea of driving more people to purchase an entire album instead of just a single track. Many artists consider their album to be the complete creative statement and prefer people to listen to the album in it's entirety.

So, before you start screaming about how Apple is doomed and iTunes sucks, go see how much the songs you want to buy are... and consider buying the album since it's still a bargain.

[Truntru]

Originally Posted by Halvri

Regardless, what I'm trying to get across is that it allows music studios to assume royalties on songs they aren't even allowing you to keep. It's also one of the ways they screw artists out of their fair share by labeling it as a non-traditional sale which the labels get to keep substantially more of than a typical purchase.

As to cell phone companies, I find their cancellation fees alot more insane. The idea that switching to another carrier because of terrible service should cost one the next six months of what they would have otherwise paid is downright insulting.

I suppose that is true... but for $2.50 (my special math) I think I'll continue to allow them to keep the change.

As far as cancellation fees... totally agreed! How messed up is that?

[solipsism]

Originally Posted by realmike15

CDs are lossless my friend. i don't know who told you that but they have not a clue what they're talking about

CDs are 16-bit 44.1kHz sample rate. there is no compression of any kind.

If CD audio isn't compressed then referring to it as lossless is incorrect as lossless and lossy refer to compression types.

Furthermore, ALAC files would increase the file size dramatically over the 256kbps AAC Apple currently uses without adding much additional quality for that size increase, and I'd wager that nearly all of their customers couldn't tell the difference with their ears, experience and equipment.

I know that even with professional equipment I cannot discern any difference between higher bitrate lossy audio from a CD, when compared to a lossless file from that CD and, of course, the CD in question. However, I did rip all my CDs to ALAC a long time ago for the simple reason that having a master backup of the actual audio from the source is a smart move, providing you have the storage space.

Apple switching to lossless would also make the audio unplayable outside any Apple device or software as I don't think anyone else supports Apple Lossless Audio Codec (ALAC). I think there are many issues with other lossless codecs regarding patents, which I think also makes Ogg generally unsupported among the big players.

This is just one of those things that people like to say and would be great in a perfect situation, but where the reality of business makes it not likely to happen. I wouldn't expect Apple to offer this as an option as iTunes++ in the future until the HW in their players gets better -AND- bandwidth to consumers increases -AND- cost of bandwidth lowers drastically -AND- storage space increases more, -AND- Apple opens up ALAC to all -OR- a truly open, legally clean lossless codec emerges. Then there will still be an issue of the source file used. Ripping form a CD would be pointless so the source would have to be from a real master so the differences would be widely discernible, but can you see the music cartel putting the final nail in the CD coffin themselves? Online music sales was kicking butt at 128kbps I can't see them destroying a source of revenue from people who think that CDs are the last holdout of "good quality" music. I think they will try to hold onto that lie as long as possible.