Apple pressured to raise iTunes pricing in 2006
Apple Computer may be forced to raise song prices at several of its popular iTunes music stores next year, according to a report from overseas.
Japan's Nikkei is reporting that record labels have been 'abuzz with talk about Apple's 2006 problem,' referring to the company's licensing renegotiations with record labels scheduled for next year.
Specifically, labels have been pushing Apple to increase its current fixed a-la-carte pricing structure in the US, Canada and Europe, the report states.
It's believed that Apple's two-tiered approach used in the new Japanese iTunes store may foreshadow possible increases, while at the same time bolstering the labels' case for higher pricing.
On the other hand, Apple's lower pricing in Japan has forced some of its main competitors in the region--Sony's Label Gate, Yahoo Japan and Excite--to lower pricing.
Come 2006, Apple's licensing of its FairPlay DRM may also be an issue, as labels have recently begun shipping copy-protected CDs that are not compatible with the popular iPod.
Japan's Nikkei is reporting that record labels have been 'abuzz with talk about Apple's 2006 problem,' referring to the company's licensing renegotiations with record labels scheduled for next year.
Specifically, labels have been pushing Apple to increase its current fixed a-la-carte pricing structure in the US, Canada and Europe, the report states.
It's believed that Apple's two-tiered approach used in the new Japanese iTunes store may foreshadow possible increases, while at the same time bolstering the labels' case for higher pricing.
On the other hand, Apple's lower pricing in Japan has forced some of its main competitors in the region--Sony's Label Gate, Yahoo Japan and Excite--to lower pricing.
Come 2006, Apple's licensing of its FairPlay DRM may also be an issue, as labels have recently begun shipping copy-protected CDs that are not compatible with the popular iPod.
Comments
So what does a higher price get you? Lower sales in terms of songs sold. Customer deciding against trying out a new group because the recommended song has been jacked up in price. Sad, because it they liked the new group they would open their wallets up for more.
It also seems that the industry in indirectly supporting an increase in illegal downloads by trying to destroy the most successful approach available of attacking illegal downloads.
Sort of between:
It it ain't broke don't fix it . . .
and
Killing the golden goose
As for their much touted new "copy protected" CDs, we'll see just how long it is before somebody cracks the DRM scheme. After all, the MPAA was so sure CSS would protect DVDs from copying and we all know how well that worked out.
HOWEVER... I still won't buy a copy-protected CD, iPod-compatible or not.
I like the convenience of iTMS, and the necessary evil of DRM (or the RIAA woudn't have let Apple have the iTMS) is at least not stopping me from anything I'll conceivably want to do with my music.
But these protected CDs are another matter. No online convenience, no buying single songs, and DRM that's already causing problems for honest consumers. So--no thanks.
And if iTMS prices are forced higher next year, I expect a cliff in sales. I know MY habits will hit a cliff
And my CD-buying won't increase enough to compensate: I have to be a lot more serious about buying a physical CD than I do to click Add to Cart.
With a personal collection of 100+ CDs, I am hardly someone who spends their time trying to rip off the industry. Now that they are trying to prevent me listening to the music the way I want to, they are losing my sales.
BTW if you think CDs are expensive in a country like Canada, where they are around $19+tax (CAD), then Australia is even more expensive, being around $34 (AUS).
Originally posted by w_parietti22
If its only like $1.25, or $1.50 then thats fine... but if its like $3-4... No way!
If the quality were going up along with the price, I might agree. Most likely, we would end up paying more money for the same quality songs. That's not good, no matter how you look at it.
On another note, shouldn't the headline be: "Apple being pressured to raise iTunes pricing in 2006?" (question mark included) Since no one (outside of Apple and the labels) truly knows what's going on and if it's going to happen, I don't think the headline should sound so sure of itself.
basically, steve tapped a gold vein, and now they want to strip mine it down to nothing for fear of losing the market to something else.
i am reminded of a fable involving geese and golden eggs. what was the moral of that story again?
I know this for sure, if songs had been $1.25 or $1.50 instead of 99¢ I sure wouldn't have bought as many as I have from iTMS. And if a lot of albums start going up to around $13.00 or higher, me and a lot of other people will simply say: F THAT. I can buy the actual CD for that price, and rip it into iTunes at better quality than iTMS provides.
It's not so much the spike in price that bothers me, its the whole branding.
$.99 is like an American standard. When we buy things for 99 cents we feel like we found a bargain. By hiking the price to 1.25~ you lose the entire notion of 'a bargain.' It becomes an awkward amount, that people won't relate too very well...
-Dan
I agree with everyone here! 99 cents is perfect.. anything else and we are creeping back to what started this whole thing, which lead to Itunes being born and leveling the playing field in the first place.... we must personally buy NO SONGS!!!!! if they do this,that will send a clear signal to the wigs at the record companies we must vote with our $$$$$s
and E mail or snail mail the record companies and tell them why we like itunes and why we like affordable music and how it should stay that way,the bastards are saving so much money by making and printing less "Physical" albums anyway...
and now this aghaggghh Byatch!!!!! then download them into oblivion until they change it back........ Itunes works, people are downloading elligelly alot less lets keep it that way.
They just want more money, for no more value. End of story.
I mean A file that cost me 99c yesterday costs (probably!) 1,29.- now? Sorry, no way.
Vote with your $$s is all I say. That´ll teach them.
Not saying they're right or that they're wrong to possibly increase prices I'm just saying some arguments are idiotic.
Originally posted by Telomar
I remember when for a dime you could buy half the planet. I refuse to spend more than a dime on anything
Not saying they're right or that they're wrong to possibly increase prices I'm just saying some arguments are idiotic.
i'm not sure i 100% get your point, but i think that we all realize that prices go up, but USUALLY it's due to the fact that additional costs in manufacturing and/or distribution add up and must be passed onto the consumer. if a commodity becomes more scarce, the price goes up. salaries of maintenance staff increases, costs go up.
problem is that, from what we can tell, there has been no increase in costs for the industry to have the itunes music store running as-is. it's a money-spigot tapped into this magical vault o' money, and the companies want to crank it open further just because they can.
another problem is that there are enough really stupid consumers out there who will continue to buy at higher prices, which will offset those who leave due to the price hike. and they will continue to raise the prices until they witness what they see as an equilibrium (i.e. a price hike loses them more regular users than they retain paying at the higher rates).
luckily, apple holds the cards now due to their market position, but steve have to make some significant moves in the next year to make sure they can't twist apple's arm any more than they have already.
Apple has always been pushing new technology into the field. Do you feel it is time iTune starts selling DVD-audio? Is CD-quality good enough for the general public?
This is a new business model and I sincerely think that the record labels do not fully understand this system. $$$ is the only thing on their mind. Sad...
Originally posted by AquaMac
The iTunes competitors would love Apple it raise it's prices. Of course inflation will play a part but so dose competition.
a lot of people are gunning for apple now. everyone is out to bring down the iPod
oops... paranoid attack, nothing to see here, move along
I think song price would go up to $1.49. the whole album would be uniform-priced at $12.99 IMO.
a VERY BAD MOVE. I already buy CDs and then import it to my iTunes anyway. It won't affect me.
and I never had problem with copy-protected CDs as of yet. Maybe because I encode it with Apple Lossless?