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September 28, 2005
More or less than 99 cents
Posted by Sandy
Was Steve Jobs baiting the record companies when he called them "greedy"? That's how it looks to me. Jobs usually chooses his words very carefully, and leads you by the nose to where he wants you to be.
No doubt he anticipated that one or more of his label partners would respond angrily to his bait, and say something to attract the wrath of everyone who has ever paid too much for a CD.
It didn't take long. Warner Music CEO Edgar Bronfman Jr. made a public statement in favor of flexible pricing and was labeled a hypocrite by the EFF and others who remember Minimum Advertised Pricing.
"Some songs should be $0.99 and some songs should be more," Bronfman said. This did nothing to help his cause and gave ammunition to the "greedy" argument. This became the story.
Could some songs sell for less than 99 cents? Most reports do not mention the possibility, but check this out:
"That's not to say we want to raise prices across the board or that we don't believe in a 99-cent price point for most music," [Bronfman] said. "But there are some songs for which consumers would be willing to pay more. And some we'd be willing to sell for less."
Jobs has taken his case to the court of public opinion, and he's winning. Apple's side of the pricing issue is less complicated, easier to explain, and looks like a better deal for consumers. If the labels choose to negotiate with Jobs in public, they're going to lose.
Comments (9)
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1. Steven Weyhrich on September 28, 2005 09:41 AM writes...
And then there is the statement reported yesterday by a Warner executive that said that the way to control Apple would be for all of the music companies who are cooperating in providing downloadable music for sale through iTMS to simply "pull the plug", and leave Apple with NO content to sell in the iTMS. I'm SURE that would leave a favorable image of the record companies in the minds of the music buying public....
Permalink to Comment2. BW on September 28, 2005 09:43 AM writes...
Wow. What kind of idiot gives such a tastey sound bite? He should have stressed "less" at first, and tacked on "maybe some should be more" right at the end. As it is anyone hearing or reading that gets a pretty clear message that Bronfman's beef with Apple is wanting to make us pay more, not less. WTG Ed :P
BW
Permalink to Comment3. Jim on September 28, 2005 12:33 PM writes...
C'mon, the record companies just want to make more money off music buyers. Whaddya expect? Bronfman is a dinosaur and the sooner musicians combine to cut out this (in the internet age)unnecessary layer, the better. As soon as Apple relaxes the 99c price, we'll see average prices soar (and the return of "piracy"). Fair Trade for songs?
Permalink to Comment4. Rob on September 28, 2005 01:14 PM writes...
Apple has said it, and I'm confirming.. for my part.
Record companies listen up. I'm not calling any shots. I'm not going to call you names. this is my vote:
If you force Apple to raise song prices on iTunes, I will go back to peer2peer networking, and you will not get my dollar.
I'm telling you the reason the record business is changing is due to the way people want to get their music. People don't want to pay $15-18 to get a whole album when they just want 3 songs from it. I am buying my music a la carte now, and it's how I will keep buying it. Notice I said BUYING my music. If record companies FORCE me to buy an album of trash to get the good couple songs, they won't get my money. I do not have it to give. This is budget nothing else.
So if record companies force Apple to raise the price on songs, then the record companies get what they deserve.
Permalink to Comment--- Robert A.
5. PXLated on September 28, 2005 03:35 PM writes...
Sandy, you're right. The minute Jobs said that I emailed a friend that the war was on but Jobs had already won, it's just that the record execs don't realize it yet.
Permalink to CommentQuestions...
Is it even legal for the record companies to gang up? Isn't that an antitrust violation?
6. Johnathan on September 28, 2005 05:46 PM writes...
Even if the major labels pull out, Apple has CD Baby and other independents as well as podcasts and audiobooks.
And I agree - Steve has already won, because Apple looks like the good guy if the "big, bad labels" pull their content out of iTMS or dramatically increase prices.
Permalink to Comment(I wonder - if prices did go to more of a "floating" model, whether the real winners would be independents and the "long tail" of major label content, since those two groups would likely be priced under 99 cents?)
7. BW on October 3, 2005 07:16 PM writes...
"Is it even legal for the record companies to gang up? Isn't that an antitrust violation?"
Yes, it probably is. But seriously, in the current climate, what are the odds anti-trust laws are applied? Hell, the only really MS got nailed was that it was just one company, and they scared a lot of other companies into spending the money on media campaigns, lobbyists, etc. In any other industry, with most of the big players on one side, and spending a ton of money on lobbyists and soft money, the government doesn't take on anti-trust stuff and they won't take on the record industry.
On the other hand, iTunes makes the record industry SOME money and shows a way forward, and at least SOME record company CEOs know they need to do SOMETHING to keep as much of the status quo in terms of intellectual property rights and the star system intact. They'd never get all the big players to boycott iTunes until they felt another big player could do a secure format that would compete with peer-to-peer well if not win decisively. Microsoft is a maybe given their questionable track record in this medium, but even if they had a technology that was winning, then will Sony want to play with them given the PS/Xbox rivalry? Sony might be able to do it too but would the other record companies trust sony not to find ways to make the technology push their music first?
Apple has the advantage not only because of the quality of iTunes and iPod, but also because they can't really be perceived to have a conflict of interest. They don't favour one record company over another, and they *certainly* don't want to see music for free. Apple is not about anything for free as far as I've ever been able to tell.
BW
Permalink to Comment8. Martin Cooper on October 7, 2005 09:18 AM writes...
The music companies should give their heads a shakeI I'm buying songs but not from new releases. I'm buying the songs I always wanted to have but didn't want (couldn't afford as a kid) the whole album. Take my money, thank apple for making this happen and be quiet!
Permalink to Comment9. jiml on October 10, 2005 10:51 AM writes...
"Yes, it probably is. But seriously, in the current climate, what are the odds anti-trust laws are applied?"
Keep in mind that the state attorney generals recently settled with the music industry for price-fixing. So it's reasonable to think that they would work together to raise prices.
They are definitely going to push this issue, though, because their numbers show that people are spending a dollar or two to download their favorite tracks from a CD, rather than spend $16 to buy the CD.
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