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Labels to ask Apple for music subscription model on iTunes - report

post #1 of 77
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The world's largest music labels are expected to ask Apple to add a music subscription service to its iTunes Store as part of negotiations to renew their licensing agreements with the iPod maker, The Financial Times is reporting.

Those discussions are set to begin next week when Universal, the largest of the labels, sits down with Apple to pound out the terms of its renewal contract, the paper said. It cited "people close to the matter" as saying that Universal's competitors, Sony-BMG, Warner Music and EMI, have either commenced talks with Apple already or are poised to do so.

Weighing on the labels is an ongoing decline in sales of compact discs and the simultaneous proliferation of illegal music downloads through peer-to-peer file sharing networks.

Executives for the big four music companies reportedly believe a subscription service could prove more lucrative for them than Apple's current 99 cent a-la-carte and $9.99 album download model, as it would increase the consumption of music and allow them to reap monthly payments in addition to small licensing fees each time songs are played.

"The record industry, in particular, has long been frustrated that Apple has reaped most of the profits of the burgeoning online music market through sales of its iPod player," the Financial Times wrote in its report. "By contrast, they have earned only modest royalties from digital music sales because most of the songs on iPods and other devices result from illegal download."

For the most part, the labels have been forced to place their gripes aside and conform to terms set forth by Apple chief executive Steve Jobs, as iTunes dominates the legal download market in the U.S. with a more than 85 percent share.

One music executive familiar with the latest round of discussions with Apple told the Financial Times that music execs are "desperate for an iPod killer so that they won't be beholden to Steve Jobs."

Reports that Apple would adopt a subscription model on its iTunes Store have been making the rounds over the last two years but have never proved substantial. The most recent of those reports surfaced this past Wednesday, when CNN's Media Biz website cited an industry executive as saying he believed the iPod maker would oblige the music industry within the next six months.
post #2 of 77
I don't have a problem with music subscriptions as an addendum to the current a la carte options.
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post #3 of 77
Offering subscriptions alongside the current iTunes buying model would be a very smart move for Apple.

It would essentially knock Microsoft out of the music market, as MS's last best hope for the Zune revolves around a 'cellular carrier' type of model where someone would sign up for a 1- or 2-year subscription for Zune Marketplace, and in return would receive a 'FREE' or steeply-discounted Zune. The hardware is in effect subsidized by the service fees over the length of the contract.

Has worked great for the wireless carriers for a long time now- that 'FREE' cellphone you got likely costs $200+ retail...

Apple would improve its relations with the record companies, offer increased consumer choice AND kick the last leg out from under Microsoft's music efforts all with one fell swoop by offering subscriptions (along with free or cheap iPods for long-term contracted subscribers). Seems like a win-win-win situation all the way around, so long as they don't stop offering 99 cent downloads... and it's highly doubtful they'd do that.

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post #4 of 77
Did the Music studios get a percentage of record player sales? No.
It seems to me that they are complaining that Apple gets too much money from ipod sales.
ipods have nothing to do with piracy. If there were no ipods, there would still be piracy (see cassettes).
What if they sold music for what it's worth? What if they started to promote live music (not just the BIG names on tour, but anyone who wants to perform and can draw a reasonable crowd at a reasonable price)?
What if they started respecting musicians as something more than money?
post #5 of 77
Screw subscriptions. I want to own the music I spend my money on. Period.
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post #6 of 77
Suppose someone signs up with Apple iTunes subscription service for 1-3 months, then downloads as many songs as they want.

Then they download software that rips the DRM from the song.

3 months of subscription fees results in 100s or 1000s of songs for a mere pittance compared to .99 per track, and $9.99 per album.

Are the labels sticking it to themselves again?
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post #7 of 77
Quote:
Originally Posted by studiomusic View Post

Did the Music studios get a percentage of record player sales? No.
It seems to me that they are complaining that Apple gets too much money from ipod sales.
ipods have nothing to do with piracy. If there were no ipods, there would still be piracy (see cassettes).
What if they sold music for what it's worth? What if they started to promote live music (not just the BIG names on tour, but anyone who wants to perform and can draw a reasonable crowd at a reasonable price)?
What if they started respecting musicians as something more than money?

What if they released CDs that had more than one or two good tracks on them, so you wouldn't be tempted to cherry pick songs on iTunes instead of buying the entire album? What if they signed artists who were capable of making an entire GOOD album, rather than one overproduced overhyped track and bunch of sheeite filler?
What if they reduced CD prices to something reasonable to spur sales?
What if they actually developed and nurtured artists over the long-term?
What if the music industry suits actually had a clue?

.
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post #8 of 77
Quote:
Originally Posted by backcheck View Post

Suppose someone signs up with Apple iTunes subscription service for 1-3 months, then downloads as many songs as they want.

Then they download software that rips the DRM from the song.

3 months of subscription fees results in 100s or 1000s of songs for a mere pittance compared to .99 per track, and $9.99 per album.

Are the labels sticking it to themselves again?

If they intended to pirate the songs, why would they buy a subscription to begin with?
post #9 of 77
Quote:
Originally Posted by Northgate View Post

Screw subscriptions. I want to own the music I spend my money on. Period.

You never will. The iTunes Music Store lets you license the music for a flat rate, but you certainly don't own anything when you buy from it. You still have to comply with the iTunes user agreement or you're breaking the law, and whether your license is transferable is still up to the licensor. That people buying from the iTMS music store feel they own something is a nice myth.

When you buy a CD, you only own the physical plastic and metal substrate, by the way. The pattern of 1's and 0's is still owned by the record labels and licensed to you for home use.
post #10 of 77
i think a subscription model in addition to their current structure make sense. while i prefer to buy my music there have been times where i've looked at the subscription model as interesting. i'd be more likely to buy one or two months of music to find a bunch of artists i like and then buy their stuff than to keep the subscription going. but that's just me.
post #11 of 77
I'm all for it as long as Apple can
1) Shut Up the Niche that cares about Subscription Models
2) Negotiate all of them into allowing Apple to sell DRM Free Music, and not just a select few Albums, but their entire catalogs that are on iTunes and beyond including Music Video.

There's no need to hope it makes the Zune look even more like a failure. If Microsoft were to drop off the face of the Earth tomorrow, it couldn't possibly make the Zune look even worst.

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post #12 of 77
Appleinsider, would you please stop using "subscription" when you actually mean "rental". Or do you actually mean subscription not rental? Anyway, some clarification would be nice.
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post #13 of 77
Quote:
Originally Posted by AppleInsider View Post

most of the songs on iPods … result from illegal download."

This is incorrect.

Article 1.

Article 2.
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post #14 of 77
Quote:
Originally Posted by Mr. H View Post

Appleinsider, would you please stop using "subscription" when you actually mean "rental". Or do you actually mean subscription not rental? Anyway, some clarification would be nice.

While they're at perhaps they could stop perpetuating the myth that iTunes Store albums are $9.99...some are more, some are less and some are actually $9.99.
post #15 of 77
Quote:
Originally Posted by AppleInsider View Post

music execs are "desperate for an iPod killer so that they won't be beholden to Steve Jobs."

Translation: They've been sticking it to their customers for decades - dictating the price of CD's, interfering with digital copy technology (cd burners), and now they have spent the last 5 years being forced to work with iTunes because it's popular and works and they don't like it.

These music execs do realize how transparent they are... right?
post #16 of 77
"The record industry, in particular, has long been frustrated that Apple has reaped most of the profits of the burgeoning online music market through sales of its iPod player," the Financial Times wrote in its report. "By contrast, they have earned only modest royalties from digital music sales because most of the songs on iPods and other devices result from illegal download."


WHAT!!?? That's BS....Most of the music on iPods are songs from CDs of albums that most of us have purchased over and over and over again. Repackaged, repackaged and so on... I have over 19,500 songs on my iPod. I have purchased about 500 songs from iTunes and over 18,500 are from CDs that I purchased (in some cases several times or repeats from vinyl versions). There are a few hundred from bootlegs....sue me.
post #17 of 77
Quote:
Originally Posted by AppleInsider View Post

"The record industry, in particular, has long been frustrated that Apple has reaped most of the profits of the burgeoning online music market through sales of its iPod player," the Financial Times wrote in its report. "By contrast, they have earned only modest royalties from digital music sales because most of the songs on iPods and other devices result from illegal download."

I am so sick of hearing how these "poor record label execs" are losing money that it makes me wish they could all be disemboweled somehow. (only the greedy ones)
post #18 of 77
Quote:
Originally Posted by Mr.H

Appleinsider, would you please stop using "subscription" when you actually mean "rental". Or do you actually mean subscription not rental? Anyway, some clarification would be nice.

Amen over here.
Quote:
Originally Posted by caliminius View Post

While they're at perhaps they could stop perpetuating the myth that iTunes Store albums are $9.99...some are more, some are less and some are actually $9.99.

Most are $9.99 (the average album you find will be $9.99). Much like their movies. If you notice the ones that cost more actually have more songs than the normal album. You might consider looking closer at pricing. iTunes still beats buying the CD on price, if not quality. I don't see anything in particular to highlight there. I think iTunes movies are more inconsisant on pricing, but I haven't looked for consistancy enough to definitively say. I know there were rules.

You know... all said... in the previous thread regarding the CNN blog story, I said that Apple would never do a RENTAL model for content. I didn't take into account what they might do if pressured by the music industry in exchange for other things Apple might want to do. Its tough when negotiating. If the music industry is going to seek RENTAL arrangements through iTunes, it's possible Apple might actually find a compromise. I still think its far more likely that they simply do a music/movie club type format, but a RENTAL system is certainly a possibility, as many of Apple's own customers are begging for such a service, even though I strongly disagree that Apple should bother offering it.

I'll say this much... quite controversially. If Apple DOES decide to offer RENTALs... heh heh heh... that will really be a shot in the back of DRM-free content. I'd say that things would shift RADICALLY towards those of us who would gladly convert DRM tracks to DRM-free tracks and completely undermine Apple's business by just looting the lending library. It's not much different than recording a broadcast from the radio for most people, and no amount of "education" will make most people think its wrong.

It's quite a recipe for failure considering the amount of people that regularly use Netflix and rip movies on rotation. The regular revenue might be a welcome surge, but it would be a business rife with an increased interest in cracking protection and a bubbling disrespect to content holders.

Quote:
"The record industry, in particular, has long been frustrated that Apple has reaped most of the profits of the burgeoning online music market through sales of its iPod player," the Financial Times wrote in its report. "By contrast, they have earned only modest royalties from digital music sales because most of the songs on iPods and other devices result from illegal download."

That's just pathetic. iPods aren't "mostly filled" with stolen music anymore than vcr's and dvd players are "mostly used" with pirated content. They just can't get off the idea of sticking their hands in Apple's pockets.
post #19 of 77
I am sick of ipods being equated with piracy. I occasionally run into folks that brag about their hard disks full of pirated music. None of them have iPods. Most of them hate ipods.
post #20 of 77
I'm not opposed to apple offering music 'rentals'. i personally have never bought music from the online store, i prefer CD's (actually, i STILL miss the larger artwork on LP's, but that's another story), but choice is good, right? it might work for some people. i don't understand the opposition to it, as long as we can still buy our tracks.
post #21 of 77
Isn't how they went in to negotiations last time? All full of bluster and what their demands would be? Let's face it, they are screwed yet again. Not that it bothers me at all.
post #22 of 77
May I suggest that anyone who is insulted by the insinuation that iPods are used to house pirated content direct their feedback towards the financial times, who were the people to originally state this. Head over to their website and request that they either back up the claim or remove it. You can use the two articles I linked to earlier in this thread as evidence.
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post #23 of 77
If the ITMS goes this way, I will be the first to cancel my account and never return.

Let me buy and pay for my music once, and then leave me alone.
post #24 of 77
Apple needs to start to press their advantage. They should act like the record label they have become. Cut out the labels (all worthless middlemen) and sell music from major artists and independents directly to consumers. This would cut the feet off the labels and it could result in a drastic cut in digital music prices for everyone.

This is the next logical step for Apple, otherwise they won't remain in their power position.

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post #25 of 77
Quote:
Originally Posted by Slewis View Post

I'm all for it as long as Apple can...

...2) Negotiate all of them into allowing Apple to sell DRM Free Music, and not just a select few Albums, but their entire catalogs that are on iTunes and beyond including Music Video.

That's an awfully good point. Apple should say to the big labels (other than EMI), "So you want subscription, eh? Ok then, we'll give it to you, but you have to give us DRM-free for our non-subscription downloads."

Give and take. And if the major labels don't like it, well, screw 'em. Compromise is a virtue.

Quote:
There's no need to hope it makes the Zune look even more like a failure. If Microsoft were to drop off the face of the Earth tomorrow, it couldn't possibly make the Zune look even worst.

I disagree. While MS's efforts so far have been derivative and fairly pathetic, the key in dealing with them is to never let them get any traction. Even an obvious copy of a good product can eventually grab a good-sized chunk of the market, if the company backing it has several years and several billions of dollars to throw away on it. Look at the Xbox 360.

When you knock MS down, you don't let them get up again.

.
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post #26 of 77
Quote:
Originally Posted by Rooskibar03 View Post

If the ITMS goes this way, I will be the first to cancel my account and never return.

Let me buy and pay for my music once, and then leave me alone.

Waaah.

If Apple offered subscription, they very likely would NOT take away the option for people to buy songs outright. People need to chill. \

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post #27 of 77
Quote:
Originally Posted by Booga View Post

You never will. The iTunes Music Store lets you license the music for a flat rate, but you certainly don't own anything when you buy from it. You still have to comply with the iTunes user agreement or you're breaking the law, and whether your license is transferable is still up to the licensor. That people buying from the iTMS music store feel they own something is a nice myth.

When you buy a CD, you only own the physical plastic and metal substrate, by the way. The pattern of 1's and 0's is still owned by the record labels and licensed to you for home use.

Thank you. That said, a person can legally re-sell a CD if they don't like it. iTunes purchases have much less resale value. One advantage that could be had downloaded media could have isn't offered by iTunes, that is replacing a file that was lost or damaged.

Quote:
Originally Posted by Mr. H View Post

Appleinsider, would you please stop using "subscription" when you actually mean "rental". Or do you actually mean subscription not rental? Anyway, some clarification would be nice.

I still think you are focused on a very narrow use of the word. The dictionary definition looks to be broader than yours.

Quote:
Originally Posted by TBaggins View Post

Waaah.

If Apple offered subscription, they very likely would NOT take away the option for people to buy songs outright. People need to chill. \

I don't get that either. The services that offer subscription also sell tracks too. It's not a dilemma. Offering a new service doesn't mean that the old service will be taken away.
post #28 of 77
Quote:
Originally Posted by SpamSandwich View Post

Cut out the labels (all worthless middlemen) and sell music from major artists and independents directly to consumers. This would cut the feet off the labels and it could result in a drastic cut in digital music prices for everyone.

They can't do that until the contracts that the "major artists" have with their labels run out. That can be a long time.
post #29 of 77
Quote:
Originally Posted by JeffDM View Post

They can't do that until the contracts that the "major artists" have with their labels run out. That can be a long time.

Many of the large groups self-publish anyway. They use the labels for distribution. The larger, more powerful groups could defect to iTunes distribution tomorrow if the economics were there. I'm pretty sure that they still make a nice bit of coin selling CDs and other related merchandise.

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post #30 of 77
I would definitely be interested in a music subscription - depending on the price. I think a $9.99 per month is a good deal; anything more is too much. I think it would benefit Apple in the long run as well.

They have already blown their 99 cent per song price model with the EMI deal (another positive in my opinion).

Apple needs to be careful and not blow the whole ipod/itunes model with their arrogance. True, they are #1 in music sales and their ipod sales are excellent - but 5 years from now it's anyone's game.

I seem to recall Jobs stating a few years back there was no need for a video player as well - he seems to have changed his mind on that topic.

If Apple is looking long term they would do well with a subscription model for music and movies - that would help secure not only the ipod but the iTV as well. I don't see a compelling reason (for myself at least) to buy an iTV; a subscription model might change that for me.
post #31 of 77
Quote:
Originally Posted by Mr. H View Post

This is incorrect.

Article 1.

Article 2.

Right you are. I think this is a case of trying to repeat a falsehood
enough times that people start repeating it, a feedback loop develops,
and some people start believing it. The technique worked well (for a
while) for some US politicians, who shall remain nameless.
post #32 of 77
Quote:
Originally Posted by SpamSandwich View Post

Apple needs to start to press their advantage. They should act like the record label they have become. Cut out the labels (all worthless middlemen) and sell music from major artists and independents directly to consumers. This would cut the feet off the labels and it could result in a drastic cut in digital music prices for everyone.

Now that is music to MY ears. Who wouldn't love to release an album on the Apple label?
post #33 of 77
Quote:
Originally Posted by TBaggins View Post

That's an awfully good point. Apple should say to the big labels (other than EMI), "So you want subscription, eh? Ok then, we'll give it to you, but you have to give us DRM-free for our non-subscription downloads."

Give and take. And if the major labels don't like it, well, screw 'em. Compromise is a virtue.

Exactly

Quote:
I disagree. While MS's efforts so far have been derivative and fairly pathetic, the key in dealing with them is to never let them get any traction. Even an obvious copy of a good product can eventually grab a good-sized chunk of the market, if the company backing it has several years and several billions of dollars to throw away on it. Look at the Xbox 360.

When you knock MS down, you don't let them get up again.

The only competitor that could actually be considered a serious competitor to Apple right now is SanDisk. Microsoft's efforts are a lot more then pathetic; they are just too damn stupid!

Let's take their Xbox 360, they have shipped about 10 Million units by the end of December by stuffing the channel with their 4.4 Million consoles, they then reported that as sold and moved on. They vowed to sell 1 Million Zunes by June, at the current pace that the Zune is selling, that would take a mircale, or a curse depending on how you look at it.

Quote:
Originally Posted by RoughlyDrafted

Original Article

Units vs Dollars
When taking a crack at deducing a ballpark estimate of how many Zunes Microsoft had sold in January, I was careful to word it: "based on NPDs numbers and my math, it would appear Microsoft sold $7.2 million in Zunes in January via retail outlets, which at $250 each would be just short of 29,000 units."

David Dennis wrote, It's unfortunate these [NPD] figures are not given in units. For your math to be correct, the average selling price per MP3 player has to be about $250. This segment is purely MP3 players, not hard drive MP3 players, so in reality the selling price is probably about $150-175. If the average selling price is $175, then 1,287,361 units were sold. If we assume 3.2% of those were Zunes, that would mean they sold 41,195 Zunes.

Of course this makes very little difference, really. Let's say Microsoft started selling the Zune during the holidays in late November-December, and that they sold 80,000 during that popular period. Then they sell 41,195 Zunes a month from January-May. That means the most likely Zune sale count is 285,975 [by June 2007].

Ouch. There are flops and there are flops. Until I wrote that number I had no real idea of how catastrophic the Zune was. It really merits your Hindenburg picture.

How can Ballmer lie so pointlessly? I can understand how he can lie but now how he can lie when he's so easily found out? He must be afraid of how his shareholders are reacting, and figures the Zune will be forgotten by July. I mean we'll remember it as a spectacular bad example, but we're just a bunch of Apple fanatics, right?

That's a fairly old article, but even now, if the Zune was actually selling, it would be all over the internet, so I doubt it's doing any better. I expect it will turn out something like this, as June 07 approaches, Microsoft will have about a Million Zunes manufactured, they will then proceed to stuff the channel and then report it as sold. The press will take it to heart, warn Apple to beware of Microsoft, completely ignore the only real competition Apple may have: SanDisk, and later, a random blogger will debunk Microsoft's numbers by pointing out that Microsoft merely stuffed the channel with "Shipped" Zunes and reported them as "Sold."

Sebastian
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post #34 of 77
Quote:
Originally Posted by studiomusic View Post

Did the Music studios get a percentage of record player sales? No.
It seems to me that they are complaining that Apple gets too much money from ipod sales.
ipods have nothing to do with piracy. If there were no ipods, there would still be piracy (see cassettes).
What if they sold music for what it's worth? What if they started to promote live music (not just the BIG names on tour, but anyone who wants to perform and can draw a reasonable crowd at a reasonable price)?
What if they started respecting musicians as something more than money?

They didn't start getting percentages until tapes, because that was the first widespread copying medium. Not many people in the 60s had record presses to pirate LPs...

Piracy with tapes didn't affect sales so much because the quality was so bad - while lots of tapes were copied, most people who liked the music would buy eventually. CD-Rs made on home computers, especially early CD-writers have shorter lifespans than industrially pressed CDs. MP3s, however are much easier to share and retain quality. The elimination of the cheap looking blank CD and the ugly case designs further remove certain stigma of piracy.

Is $12-20 more than than an album is worth? You seem to imply this, which makes me think you don't really put much value in music.

Also, big labels generally help all of their artists with touring, and generally take care of advertising very well. I've worked as a sideman with a lower-level Universal Artist in Denmark, as well as a Canadian on Sony, and both got great touring support. Why should they support artists who aren't signed to their label?

When it comes down to it, all record companies are businesses. If they don't sell records, they don't sign bands, and the first to go are always the smallest sellers. The more piracy occurs, the less chances a lot of bands will get, and the more the labels will stick with "sure things"...

Also, Apple is just as dependent on the labels as they are on it (more so, actually). If the labels decide the iTunes model doesn't work, they can very easily get together and force apple to do whatever they want. Imagine if Apple said no to subscription, and a few labels jumped ship, while Microsoft went with subscription? The most important thing to iTunes is still content, and the labels still control that. If they're not happy with how things are working now, they'll change it.
post #35 of 77
Quote:
Originally Posted by Superbass View Post

Is $12-20 more than than an album is worth? You seem to imply this, which makes me think you don't really put much value in music.

It's expensive compared to what it gets. For $20, one can get a fourty minute audio track, maybe a music video or two, or one can often get a newly released movie with two discs, one with a two hour feature and another with two hours of bonus footage. After a while, the price might go down $10 or less. Price almost never goes down with music.

The record industry has been pulling a pretty big ruse, like the one where they claim that most iPods are just loaded with mostly pirated music. It also turned out that people that downloaded the most often bought the most music too. Their average sales volume per title has been going up as well, but that effect is tamped by releasing fewer titles and signing fewer bands.
post #36 of 77
Quote:
Originally Posted by Mr. H View Post

This is incorrect.

Article 1.

Article 2.

Well, the first article says 70% of music on MP3 players is legally obtained, which means 30% stolen, which does seem like a lot to me. Also, this stolen number should be increasing as P2P gets more popular, and people run out of CDs in their personal collections to rip...

The second article says iPod users buy more albums than other music player users, but we can assume there that, since iPods are the most expensive players available, their users probably have more cash to spend... It further gives no figures as to how many albums iPod users were buying before they got their iPods, which would be a much more helpful figure....

The fact is, music sales are going down dramatically, even when MP3 sales are included in the figure. But people aren't listening to less music or reducing the variety of music they possess. Why is this? Do you think it has nothing to do with illegal downloading and P2P sharing?
post #37 of 77
Quote:
Originally Posted by Cleverboy View Post

Amen over here.
.... iTunes still beats buying the CD on price, if not quality. ....

How do you figure that a lossy encoded mp3 version of a song is better quality than a CD (which is recorded at 16 bits /44.1 KHz)? Even at higher sampling rates (see the new 'higher quality' mp3 versions of EMI's records) the amount of data loss and the subsequent quality drop is still significant. (do a side by side comparison of a CD track and an MP3 track on a good quality player and you'll hear the difference)

I am amazed that the recording industry has managed to get the buying public thinking that they are not making very much money on sales of MP3 files when there is absolutely no overhead for the file past the cost of actually making the original file. The same file can be sold over and over again with absolutely no material cost to the label (i.e.: CD medium, cases, artwork, inserts, distribution channels etc.). Apple apparently gives 64 cents of each 99 cent sale to the recording label. (That 64 cents is just about all profit for the label minus the small percentage that goes to the artist for royalties)

And now the recording industry would like to make money from you on a monthly subscribtion fee for RENTING a song??? I put out good money for CD's of music, and this means that I can play them anywhere, anytime I like, without worrying about a DRM demon telling me that my purchase has expired, "please put in another quarter to hear the song again....".

And the last point, would someone please show me the actual data that says that going to a subscription model would reduce piracy. A person who is pirating music is not going to care one little bit that a subscription service is available, they are still going to pirate copies of music. (the pirated mp3's are quite often of even a lower quality than the original mp3, so that they are smaller in size enabling more songs to be stored in a smaller space)

Just to put my comments in perspective I run a small recording studio and I have been doing audio production work for a few years.
post #38 of 77
Quote:
Originally Posted by JeffDM View Post

It's expensive compared to what it gets. For $20, one can get a fourty minute audio track, maybe a music video or two, or one can often get a newly released movie with two discs, one with a two hour feature and another with two hours of bonus footage. After a while, the price might go down $10 or less. Price almost never goes down with music.

Sorry, do you come from a city where the music store doesn't have a bargain bin? Also, in my experience, the low cost DVDs tend to be the ones that were overproduced or not selling. Lord of the Rings still costs over 20 bucks, but Lord of the Dance can be had for 10...

Most major label CDs where I come from cost 12-15 bucks. Also, most nowadays have closer to 50-60 minutes of music (except punk rock or vinyl reissues). Independents cost more, but then, so do smaller, independent films!

I can't remember the last time I could watch the same movie more than 2 times a year, but I've got a lot of records that I can listen to 2 times a day... DVDs have to be cheap, because if they cost more than 3 rentals, very few people would buy, because the replay value is low. The second disc with bonus material is an attempt to increase the value, but how many times can you listen to Quentin Tarantino talk about how interesting his move is, or Jessica Simpson talk about how much fun she had? Bonus material is also very cheap to make, all current movie contracts include clauses to do DVD bonus material as part of the promotional side of the contract...

Finally, and most obviously, the DVD release is very cheap to make. In most cases, the movie has already covered expenses (at the very least) in the theatres. Music doesn't work this way.
post #39 of 77
Quote:
Originally Posted by Sopranino View Post


I am amazed that the recording industry has managed to get the buying public thinking that they are not making very much money on sales of MP3 files when there is absolutely no overhead for the file past the cost of actually making the original file. The same file can be sold over and over again with absolutely no material cost to the label (i.e.: CD medium, cases, artwork, inserts, distribution channels etc.). Apple apparently gives 64 cents of each 99 cent sale to the recording label. (That 64 cents is just about all profit for the label minus the small percentage that goes to the artist for royalties)

The material costs are actually very low. I can get runs of 500 CDs printed at about 2 bucks each, and labels can get it done, in bigger quantities for much cheaper. Distribution is now handled much like Coca-Cola is bottled, with production centres spread out regionally so transport isn't too expensive. Also, with CD sales, they sell the whole album, but via iTunes, a lot of the time people are only buying a couple tracks.

Imagine if people could choose to save money on a Mac by not having Safari, Garageband, iDVD, address book, Mail, .Mac, iChat or any of the other programs I never use included, how much money apple would lose....
post #40 of 77
Quote:
Originally Posted by Sopranino View Post


And the last point, would someone please show me the actual data that says that going to a subscription model would reduce piracy. A person who is pirating music is not going to care one little bit that a subscription service is available, they are still going to pirate copies of music. (the pirated mp3's are quite often of even a lower quality than the original mp3, so that they are smaller in size enabling more songs to be stored in a smaller space)

Think of it as an investment by the music industry in the (near) future. The subscription service puts DRM into the tracks and players so that when the subscription runs out, the tracks don't work. This doesn't affect current thieves or casual loaners of CDs to friends for copying.

However, in 5 years, when CDs are no longer produced, new material will not have a source for "ripping", unless they can get their hands on the master recordings or crack the DRM.... "Buying" a track would probably involving getting a mulitple year license or something, while "renting" or "subscribing" would be monthly.

The apple model of iTunes/OSX/iPhone/ATv fits the idea of DRM perfectly, as a user's identity and music rights can be easily maintained through the whole system. In that way, people faithful to the Apple brand are the least affected by DRM (compared to somebody who has 3 or 4 companies' gear and software to move music around on).
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