It'll probably be like with the stock market. It'll take a shock when prices are changed, then it'll come back right up.
They could always introduce "iTunes Credits", a song is 1 credits, a movie is 10 credits etc. Then the "pricing" would be the same all around the world. And they could change the cost of the credits over time... Oh, I don't even know why I'm writing this crap! I'D HATE IT
Yeah, Apple should just start dealing directly with the artists. Maybe they can start by giving the artists the raise they want, and then say, "By the way, if you want 70 cents instead of 15, let's talk. The record companies offer very little value, and Apple could offer so much more.
And yes, Mr. Israelite, you make nothing from the sale of an iPod just like you make nothing when somebody downloads the songs for free from the Internet, so keep that in mind.
First of all, you have to understand the difference between Copyright and Royalty. Copyright is paid to the copyright owner of the track (songwriter/publicist), via collecting societies like SESAC,BMI and ASCAP. Royalty is paid from the label to the artist/performer of the track. So the label pays royalty to the artist from their share of 70 cents minus copyright and VAT. The artist royalty varies a lot, but it's usually between 25-30% for a major label well known artist.
apple pays the record companies, not the artists. if the artists demand more from the record company, then the record company demands more of apple, then apple demands more of us.
That's not true.
Apple does pay the record companies, but they also put a certain percentage of the money into the common digital download fund, which is then redistributed via the publishing body to individual artists who are registered depending on how many they've sold.
The fee that is being spoken of in this article is the same as the 7 cent fee placed on blank media like CD-Rs, blank cassettes, etc., and is designed to make materials which are heavily used in the copyright infringement (including mp3s) pay back the people who own the copyrights to a small degree. Basically, it beefs up songwriters' royalties a bit to (mildly) counteract the effect blank CD-Rs, MP3s, etc have on folks' copyrights.
The people who actually come up with the 'product' in the first place ought to get paid properly, especially off something with such little overhead compared to printing and distribution of physical recordings.
I wouldn't blame this on Apple, the record labels are intentionally trying to put Apple at a disadvantage by leaving them with high DRM restrictions and giving their competition little to no DRM restrictions at the same price. SJ has always been a supporter of DRM free music.
What's even more disappointing is the Movie industry, they want Apple to fail with iTunes. Now the movie industry is capable of making more money from downloads than from franchises like Blockbusters who buy a couple of copies and rent them at whatever price they please. In Washington RedBox rents out the latest releases for $1 and the Movie industry can say or do nothing because once you buy the DVD you can legally rent it. Yet for that same movie iTunes is forced to only sell it for $14, or if they decide to offer it for rent it costs $3 to $4.
For the Movie industry they should have much higher profit margin to rent and sell online than from brick and mortar stores.
BS... the iTunes store is the core of Apple's commercial strategy.
So????
ITunes is Apple's interface and syncing engine to the iPod and iPhone, but anyone who wants to load music independently without the hassles or DRM or at a higher 44.1 Khz resolution - can do so without resorting to buying music from iTunes by using iTunes as a tool as opposed to purchasing from the store...
So Apple can still offer iTunes as a tool and stop selling music through it.....
Greed will kill the goose that lays the golden egg. Music Labels should be the targets for more royalties not Apple.
I'm really disappointed that Apple is taking this stance. Of all people, I thought Jobs would be standing up for the artists. I wonder how likely it is that artists will want to show up for Steve's keynotes now.
YES! You nailed it...it smacks of utter hypocrisy for Apple to be all buddy-buddy with these artists, then stab them in the back for wanting to be properly compensated.
I hope all the artists will take note that Apple is NOT on their side.
People don't buy iPods because of the iTunes Music Store... they purchase content from the iTunes Music Store because they bought an iPod. It's not the other way around, never was, never will be.
Music for my iPod can NOW be purchased elsewhere, the need for the music section of iTMS is no longer relevant, since DRM is now going the way of the Dodo. The iTunes Music Store was originally created so iPod users had a place to buy digital music. At that time most popular digital music was only compatible with Windows and was subscription based.
The labels should eat up the cost increase to their artists, not Apple... they still need X amount of money to run the servers, pay for bandwidth, etc. It is after all in their best interest to do so, if Apple is threatening to pull the plug. Losing almost 2 billion songs a year in sales seems like a dumb move.
I agree. While it would be painful, not so much financially, but in Public Relations, I suspect Jobs and Apple are serious about pulling the plug on iTumes Music store.
By the way, out of the reported 30¢ Apple gets, I thought most of it went to the company whose provides the servers the music is on and at one time it was projected that Apple actually only got ~4¢ on each song sold.
YES! You nailed it...it smacks of utter hypocrisy for Apple to be all buddy-buddy with these artists, then stab them in the back for wanting to be properly compensated.
I hope all the artists will take note that Apple is NOT on their side.
Buddy-buddy? It's business, not friendship. There was nothing altruistic about Jack Johnson being there and it's not a coincidence that Jack Johnson was chosen for the presentation and he just happened to be the highest selling artist on iTS.
Apple can easily find someone to play a single song for the presentation or one that will allow Apple to use their music in their commercials. If Apple is losing money at the iTS to a point that the value added service is hurting its bottom line then there is no reason to keep it operational. Link to Amazon instead with their 256kbps and 89¢ songs with no DRM where Apple can get the billions per year in per song advertising from within iTS.
Besides that, Apple is constantly butting heads with the record companies yet their commercials aren't just using unsigned Indie bands. Jack Johnson is with Universal records.
This whole thing sounds like a bluff. Artists SHOULD get more of a cut, but it should probably come out of the record company's share instead of passing it along. Record labels are dinosaurs, horribly inefficient and out of touch.
Quote:
Originally Posted by FJRabon
Wilco, for one, cost their record label TONS of money.
Source?
Yankee Hotel Foxtrot sold 590,000 copies. If the record company can't make money on that, they're doing something wrong.
Quote:
Originally Posted by Hands Sandon
Why can't they all be more flexible.
Sales below 1,000 songs get 15%
Sales below 100,000 songs get 10%
Sales below 1,000,000 songs get 5%
Have some kind of a scale at least so everyone benefits.Can't they all just grow up!
Interesting idea, but I see some problems.
If albums that sell less cost more, it means the seller either needs to charge more for those, or make less of a profit on them.
That would discourage sales of those songs that aren't selling well already, and it might even be enough incentive for sellers to not even carry the smaller sellers at all.
Yeah i think i saw Kayne begging for change, he is so poor....
Not to bring politics into this but the government can't decide how to fix the economy, but cant pass or try to pass a stupid law for music artist. HMMMM someone needs to readjust priorities....
The truth is they're nearly on the verge of bankruptcy, as they're institutionally ill-equipped to handle the change of the music business today.
Can you provide actual figures for this? I can't find current figures, but in the past, when they say they are losing money, they say that all the people copying their stuff equate to a certain amount of money per copy and try to spin this into a tangible loss. They were still making considerable profits, even record profits, at the same time they say piracy is "killing" them.
I have a really hard time believing they would shut it down. Didn't Steve just say on September 9th they were now #1 music provider? Correct me if I'm wrong,
This whole thing sounds like a bluff. Artists SHOULD get more of a cut, but it should probably come out of the record company's share instead of passing it along. Record labels are dinosaurs, horribly inefficient and out of touch.
Source?
Yankee Hotel Foxtrot sold 590,000 copies. If the record company can't make money on that, they're doing something wrong.
Interesting idea, but I see some problems.
If albums that sell less cost more, it means the seller either needs to charge more for those, or make less of a profit on them.
That would discourage sales of those songs that aren't selling well already, and it might even be enough incentive for sellers to not even carry the smaller sellers at all.
You are probably right,but they want to introduce a 15% across the board rate.I just thought that if they new they could pay less in royalties for the bigger sales then everyone would be making more money except the few artists who are already(usually)making a lot.The artists who only sell a few will get more,helping them.Kind of a Robin Hood approach.It might possibly be the case that some artists in that lower bracket are pushed harder just to get them making more sales in the lower royalties bracket.
I really don't know,but an all or nothing approach seems like a step backwards.
You need to read that article again: it's the National Music Publishers' Association who are asking for the increase, not the Record Labels. Frankly I don't see how Apple are even involved in this. If it's the Record Label's responsibility to pay the artists, then surely that's a contract between them. Why should Apple get dragged into it?
Whatever happens, Apple can't afford to close iTMS. It's now an institution, and is the grease on the wheels of the iPod & iPhone sales. They'd never regain the same status if iTMS went away. And turning it off will be commercial suicide for their iPod & iPhone business.
What's the betting that MicroSoft would make Zune hay if Apple dropped the ball now.
-----
You need to read the article again, this time for comprehension. If the NMP raises royalties, and Record companies are not willing to eat the cost by paying more to artists, they'll have to raise the price to offset the royalty increase..
Apple needs the artists or they wouldn't have a store. Commercial artists need record labels and get their money from live shows, but there are a lot of independant people (let's say dance producers) who have their own label. Weirdly enough, there aren't a lot of these on itunes. For dance, itunes is a huge disappointment. Also the DRM sucks, after a couple of computer exchanges a lot of music is 'dissappeared'.
The itunes store is good for old music, but they have so much more to do.
Even then, the artists have to make a much bigger effort to produce a tune.
Apple wants to make it seem like the music is free, 99c isn't much already, and then they want most part of the money while they just had to import the tune and give it names. The artist has nothing to say about it, and that's where it's wrong. Apple needs the artists and a little respect is advisable. They want to make money money money on someone elses commitment.
It is no basis for a relationship & it's just wrong.
Also, most studios work with apple computers so they already made profit of the artists.
The record labels take 61 cents out of 70, and they refuse a royalty increase and want Apple to eat it?
Give me a break.
Apple's nuclear option has become a possibility as their market share increases. But it needs to be accompanied by a change in the business model -- Apple themselves should become a record label. It would help if the online distributors can come up with a united stance on this matter.
Think about it. The recording industry and the RIAA completely bypassed for new artists (and for any existing ones that can get out of their contracts).
First of all, if Apple ate 15 of their alleged 30 cent profit per song, do any of you actually think they will be taking a loss? The iTunes store is a server farm somewhere in Cupertino that generates residual income in the billions for the price of a monthly electric bill in the thousands.
that is Apple's point. they aren't making 30 cents in profit. more like maybe 5 cents, perhaps less. because they have to pay 70 cents per download to have the song available. then there's servers etc.
with the way things are going right now, if the artists are to receive more money, the other side is likely to demand more from apple for the right to sell the songs and Apple doesn't want to raise costs to us --the buyer. so it is possible that they will end up operating at a loss.
now some folks will say 'who gives an F, they are making bank on computer sales, let that fund the store'. but that's not good business. so they have basically said if it comes to that, they will consider killing off the store.
Apple would agree with you. and the issue comes with the contracts to be able to sell the music and now the payments are addressed. if it is a firm amount of money per track/album then Apple might be able argue in their favor, at least until the current contract is up.
but if the contracts were written just right, then the record companies might have the means to demand the added money from Apple and Apple can't say no. thus the risk of operating at a loss.
Comments
I think it matters far less when not using cash.
True, true.
It'll probably be like with the stock market. It'll take a shock when prices are changed, then it'll come back right up.
They could always introduce "iTunes Credits", a song is 1 credits, a movie is 10 credits etc. Then the "pricing" would be the same all around the world. And they could change the cost of the credits over time... Oh, I don't even know why I'm writing this crap! I'D HATE IT
Yeah, Apple should just start dealing directly with the artists. Maybe they can start by giving the artists the raise they want, and then say, "By the way, if you want 70 cents instead of 15, let's talk. The record companies offer very little value, and Apple could offer so much more.
And yes, Mr. Israelite, you make nothing from the sale of an iPod just like you make nothing when somebody downloads the songs for free from the Internet, so keep that in mind.
First of all, you have to understand the difference between Copyright and Royalty. Copyright is paid to the copyright owner of the track (songwriter/publicist), via collecting societies like SESAC,BMI and ASCAP. Royalty is paid from the label to the artist/performer of the track. So the label pays royalty to the artist from their share of 70 cents minus copyright and VAT. The artist royalty varies a lot, but it's usually between 25-30% for a major label well known artist.
apple pays the record companies, not the artists. if the artists demand more from the record company, then the record company demands more of apple, then apple demands more of us.
That's not true.
Apple does pay the record companies, but they also put a certain percentage of the money into the common digital download fund, which is then redistributed via the publishing body to individual artists who are registered depending on how many they've sold.
The fee that is being spoken of in this article is the same as the 7 cent fee placed on blank media like CD-Rs, blank cassettes, etc., and is designed to make materials which are heavily used in the copyright infringement (including mp3s) pay back the people who own the copyrights to a small degree. Basically, it beefs up songwriters' royalties a bit to (mildly) counteract the effect blank CD-Rs, MP3s, etc have on folks' copyrights.
The people who actually come up with the 'product' in the first place ought to get paid properly, especially off something with such little overhead compared to printing and distribution of physical recordings.
Bad Apple, Bad!
Bad MAFIAA, Bad! ( mafiaa.org )
What's even more disappointing is the Movie industry, they want Apple to fail with iTunes. Now the movie industry is capable of making more money from downloads than from franchises like Blockbusters who buy a couple of copies and rent them at whatever price they please. In Washington RedBox rents out the latest releases for $1 and the Movie industry can say or do nothing because once you buy the DVD you can legally rent it. Yet for that same movie iTunes is forced to only sell it for $14, or if they decide to offer it for rent it costs $3 to $4.
For the Movie industry they should have much higher profit margin to rent and sell online than from brick and mortar stores.
BS... the iTunes store is the core of Apple's commercial strategy.
So????
ITunes is Apple's interface and syncing engine to the iPod and iPhone, but anyone who wants to load music independently without the hassles or DRM or at a higher 44.1 Khz resolution - can do so without resorting to buying music from iTunes by using iTunes as a tool as opposed to purchasing from the store...
So Apple can still offer iTunes as a tool and stop selling music through it.....
Greed will kill the goose that lays the golden egg. Music Labels should be the targets for more royalties not Apple.
I'm really disappointed that Apple is taking this stance. Of all people, I thought Jobs would be standing up for the artists. I wonder how likely it is that artists will want to show up for Steve's keynotes now.
YES! You nailed it...it smacks of utter hypocrisy for Apple to be all buddy-buddy with these artists, then stab them in the back for wanting to be properly compensated.
I hope all the artists will take note that Apple is NOT on their side.
People don't buy iPods because of the iTunes Music Store... they purchase content from the iTunes Music Store because they bought an iPod. It's not the other way around, never was, never will be.
Music for my iPod can NOW be purchased elsewhere, the need for the music section of iTMS is no longer relevant, since DRM is now going the way of the Dodo. The iTunes Music Store was originally created so iPod users had a place to buy digital music. At that time most popular digital music was only compatible with Windows and was subscription based.
The labels should eat up the cost increase to their artists, not Apple... they still need X amount of money to run the servers, pay for bandwidth, etc. It is after all in their best interest to do so, if Apple is threatening to pull the plug. Losing almost 2 billion songs a year in sales seems like a dumb move.
I agree. While it would be painful, not so much financially, but in Public Relations, I suspect Jobs and Apple are serious about pulling the plug on iTumes Music store.
By the way, out of the reported 30¢ Apple gets, I thought most of it went to the company whose provides the servers the music is on and at one time it was projected that Apple actually only got ~4¢ on each song sold.
YES! You nailed it...it smacks of utter hypocrisy for Apple to be all buddy-buddy with these artists, then stab them in the back for wanting to be properly compensated.
I hope all the artists will take note that Apple is NOT on their side.
Buddy-buddy? It's business, not friendship. There was nothing altruistic about Jack Johnson being there and it's not a coincidence that Jack Johnson was chosen for the presentation and he just happened to be the highest selling artist on iTS.
Apple can easily find someone to play a single song for the presentation or one that will allow Apple to use their music in their commercials. If Apple is losing money at the iTS to a point that the value added service is hurting its bottom line then there is no reason to keep it operational. Link to Amazon instead with their 256kbps and 89¢ songs with no DRM where Apple can get the billions per year in per song advertising from within iTS.
Besides that, Apple is constantly butting heads with the record companies yet their commercials aren't just using unsigned Indie bands. Jack Johnson is with Universal records.
Wilco, for one, cost their record label TONS of money.
Source?
Yankee Hotel Foxtrot sold 590,000 copies. If the record company can't make money on that, they're doing something wrong.
Why can't they all be more flexible.
Sales below 1,000 songs get 15%
Sales below 100,000 songs get 10%
Sales below 1,000,000 songs get 5%
Have some kind of a scale at least so everyone benefits.Can't they all just grow up!
Interesting idea, but I see some problems.
If albums that sell less cost more, it means the seller either needs to charge more for those, or make less of a profit on them.
That would discourage sales of those songs that aren't selling well already, and it might even be enough incentive for sellers to not even carry the smaller sellers at all.
Not to bring politics into this but the government can't decide how to fix the economy, but cant pass or try to pass a stupid law for music artist. HMMMM someone needs to readjust priorities....
The truth is they're nearly on the verge of bankruptcy, as they're institutionally ill-equipped to handle the change of the music business today.
Can you provide actual figures for this? I can't find current figures, but in the past, when they say they are losing money, they say that all the people copying their stuff equate to a certain amount of money per copy and try to spin this into a tangible loss. They were still making considerable profits, even record profits, at the same time they say piracy is "killing" them.
This whole thing sounds like a bluff. Artists SHOULD get more of a cut, but it should probably come out of the record company's share instead of passing it along. Record labels are dinosaurs, horribly inefficient and out of touch.
Source?
Yankee Hotel Foxtrot sold 590,000 copies. If the record company can't make money on that, they're doing something wrong.
Interesting idea, but I see some problems.
If albums that sell less cost more, it means the seller either needs to charge more for those, or make less of a profit on them.
That would discourage sales of those songs that aren't selling well already, and it might even be enough incentive for sellers to not even carry the smaller sellers at all.
You are probably right,but they want to introduce a 15% across the board rate.I just thought that if they new they could pay less in royalties for the bigger sales then everyone would be making more money except the few artists who are already(usually)making a lot.The artists who only sell a few will get more,helping them.Kind of a Robin Hood approach.It might possibly be the case that some artists in that lower bracket are pushed harder just to get them making more sales in the lower royalties bracket.
I really don't know,but an all or nothing approach seems like a step backwards.
Whatever happens, Apple can't afford to close iTMS. It's now an institution, and is the grease on the wheels of the iPod & iPhone sales. They'd never regain the same status if iTMS went away. And turning it off will be commercial suicide for their iPod & iPhone business.
What's the betting that MicroSoft would make Zune hay if Apple dropped the ball now.
-----
You need to read the article again, this time for comprehension. If the NMP raises royalties, and Record companies are not willing to eat the cost by paying more to artists, they'll have to raise the price to offset the royalty increase..
The itunes store is good for old music, but they have so much more to do.
Even then, the artists have to make a much bigger effort to produce a tune.
Apple wants to make it seem like the music is free, 99c isn't much already, and then they want most part of the money while they just had to import the tune and give it names. The artist has nothing to say about it, and that's where it's wrong. Apple needs the artists and a little respect is advisable. They want to make money money money on someone elses commitment.
It is no basis for a relationship & it's just wrong.
Also, most studios work with apple computers so they already made profit of the artists.
Something must change.
Give me a break.
Apple's nuclear option has become a possibility as their market share increases. But it needs to be accompanied by a change in the business model -- Apple themselves should become a record label. It would help if the online distributors can come up with a united stance on this matter.
Think about it. The recording industry and the RIAA completely bypassed for new artists (and for any existing ones that can get out of their contracts).
HELLO!! A voice of reason!
First of all, if Apple ate 15 of their alleged 30 cent profit per song, do any of you actually think they will be taking a loss? The iTunes store is a server farm somewhere in Cupertino that generates residual income in the billions for the price of a monthly electric bill in the thousands.
that is Apple's point. they aren't making 30 cents in profit. more like maybe 5 cents, perhaps less. because they have to pay 70 cents per download to have the song available. then there's servers etc.
with the way things are going right now, if the artists are to receive more money, the other side is likely to demand more from apple for the right to sell the songs and Apple doesn't want to raise costs to us --the buyer. so it is possible that they will end up operating at a loss.
now some folks will say 'who gives an F, they are making bank on computer sales, let that fund the store'. but that's not good business. so they have basically said if it comes to that, they will consider killing off the store.
The labels should eat up the cost increase to
Apple would agree with you. and the issue comes with the contracts to be able to sell the music and now the payments are addressed. if it is a firm amount of money per track/album then Apple might be able argue in their favor, at least until the current contract is up.
but if the contracts were written just right, then the record companies might have the means to demand the added money from Apple and Apple can't say no. thus the risk of operating at a loss.