Apple announced today that they are the number two retailer of music, second only to Walmart. They could do better..
Something has been bugging me since the iTunes Music store was introduced. Something that just didn’t make sense to me.
Since I bought my first single... Elton John’s YOUR SONG in the early 70s, I’ve been paying a buck for a single. Although, back then it was a buck for two songs.. as I recall.. (although I can’t recall the flip-side of YOUR SONG)
I remember paying under 10 bucks for the LPs. Then the CD comes along... less to manufacture, but they sell it for 150-200% more.. (not to mention you have to re-buy your collection if you want to hear it on CD..) Then comes along Napster and the record companies freak and sue them into oblivion. Then came the ipod, iTunes, and the iTunes music store. The iPod could read and play mp3s which I could create in iTunes from my CDs.
Being a writer, I’ve never been one to advocate pirating music, But the iTunes music store... it never made sense to me. 99 cents. What I always paid... but now without the mess of physical disc... well.. actually without anything that comes along with that physical disk. No glossy sleeve. No K-Mart.. no delivery truck.. no manufacturing.. no lathe-cut master press blank to wear out... (or in the case of cd.. mold cavities or burn cycles)... but still 99 cents. (For about the same price as an album download, I can buy the physical CD, rip it, and have it on my iTunes and iPod and still have the CD as a badge of honor in my collection!)
It doesn’t make sense to me... and I’m not that smart. I think that maybe it doesn’t make sense to a lot of people.
Now, I know that costs have gone up, but frankly, manufacturing costs went down significantly with the CD and so did quality of sound.
And before anyone thinks I’m blaming Apple (or the other online distributors), I’m not. Apple had to fight hard to get the labels on board. Labels were so worried that their physical sales would drop as a result that they forced the price higher. 99 cents was a sweet deal for the labels and one Apple had to do to get enough labels onboard. But based on that price, the volume of sales were forever going to be dwarfed. Now with the CD on the verge of extinction, the original price structure is no longer tenable.
It was short-sighted. Because of the original premise, however, everything rotates around that 99 cent price... including the digital retailers cut.. Its not a percentage in most cases.. its a fixed amount per track.
For instance, I don’t, as an artist, even have the choice to sell my music (in any significant circles) for less. Sure, I can list my music for less on some sites. ( although iTunes requires the 99 cent price)
But why or how could I? With a fixed distribution fee, (not a percentage) If I were to sell my tracks for 40 cents, those sites keep 35 cents and give me a nickel. Like I said, I’m not that smart, but even I can see the disadvantages of such a deal.
So... what do I propose? Downloads should cost 39 Cents.
If iTunes were to drop their price to $0.39, their sales would triple. I know I’d buy 3 times as much... I always have this much in my pocket.. That would raise their revenue by almost 20%. If their cut was a percentage, the labels sales would triple overnight, and increase by 20% as well. Bandwidth isn’t a problem.. A single song is a sliver of the size of a movie or TV show and they make money at $1.99 per show.
If everyone was paid on a percentage of revenue, everyone’s income would also increase by 20%. (of course, this is based on the assumption that “everyone” has music people want.)
While 20% might not seem like a lot.. the real benefit would be the 200% more legal ownership of their music. 3 times the people buying digital music. 3 times the people on the righteous train.. It’d probably be more. Think about it. My iPod can hold 10,000 songs. How much would that cost to fill, legally?
39 cents. It makes... well... sense.
Tell me what you think.
T
Something has been bugging me since the iTunes Music store was introduced. Something that just didn’t make sense to me.
Since I bought my first single... Elton John’s YOUR SONG in the early 70s, I’ve been paying a buck for a single. Although, back then it was a buck for two songs.. as I recall.. (although I can’t recall the flip-side of YOUR SONG)
I remember paying under 10 bucks for the LPs. Then the CD comes along... less to manufacture, but they sell it for 150-200% more.. (not to mention you have to re-buy your collection if you want to hear it on CD..) Then comes along Napster and the record companies freak and sue them into oblivion. Then came the ipod, iTunes, and the iTunes music store. The iPod could read and play mp3s which I could create in iTunes from my CDs.
Being a writer, I’ve never been one to advocate pirating music, But the iTunes music store... it never made sense to me. 99 cents. What I always paid... but now without the mess of physical disc... well.. actually without anything that comes along with that physical disk. No glossy sleeve. No K-Mart.. no delivery truck.. no manufacturing.. no lathe-cut master press blank to wear out... (or in the case of cd.. mold cavities or burn cycles)... but still 99 cents. (For about the same price as an album download, I can buy the physical CD, rip it, and have it on my iTunes and iPod and still have the CD as a badge of honor in my collection!)
It doesn’t make sense to me... and I’m not that smart. I think that maybe it doesn’t make sense to a lot of people.
Now, I know that costs have gone up, but frankly, manufacturing costs went down significantly with the CD and so did quality of sound.
And before anyone thinks I’m blaming Apple (or the other online distributors), I’m not. Apple had to fight hard to get the labels on board. Labels were so worried that their physical sales would drop as a result that they forced the price higher. 99 cents was a sweet deal for the labels and one Apple had to do to get enough labels onboard. But based on that price, the volume of sales were forever going to be dwarfed. Now with the CD on the verge of extinction, the original price structure is no longer tenable.
It was short-sighted. Because of the original premise, however, everything rotates around that 99 cent price... including the digital retailers cut.. Its not a percentage in most cases.. its a fixed amount per track.
For instance, I don’t, as an artist, even have the choice to sell my music (in any significant circles) for less. Sure, I can list my music for less on some sites. ( although iTunes requires the 99 cent price)
But why or how could I? With a fixed distribution fee, (not a percentage) If I were to sell my tracks for 40 cents, those sites keep 35 cents and give me a nickel. Like I said, I’m not that smart, but even I can see the disadvantages of such a deal.
So... what do I propose? Downloads should cost 39 Cents.
If iTunes were to drop their price to $0.39, their sales would triple. I know I’d buy 3 times as much... I always have this much in my pocket.. That would raise their revenue by almost 20%. If their cut was a percentage, the labels sales would triple overnight, and increase by 20% as well. Bandwidth isn’t a problem.. A single song is a sliver of the size of a movie or TV show and they make money at $1.99 per show.
If everyone was paid on a percentage of revenue, everyone’s income would also increase by 20%. (of course, this is based on the assumption that “everyone” has music people want.)
While 20% might not seem like a lot.. the real benefit would be the 200% more legal ownership of their music. 3 times the people buying digital music. 3 times the people on the righteous train.. It’d probably be more. Think about it. My iPod can hold 10,000 songs. How much would that cost to fill, legally?
39 cents. It makes... well... sense.
Tell me what you think.
T
2 comments:
Stay tuned Tim. Music 2.0 is coming, and knowing the R.I.A.A., everyone will get screwed except the R.I.A.A. Meanwhile, I've got some blogging to do...
IMO, competition will drive prices down. It's the beauty of free-market and I still believe in it. (I'm an optimist...)
Rhapsody is offering unilimited free listens before downloads. It's only a matter of time before I-Tunes does, too. All it takes is a little competition.
Someone will offer cheaper downloads, people will flock, others will respond.
Record companies may not be on board for cheaper downloads, but they'll see the indie labels using it to their advantage and they'll adjust... or die out.
It's the beauty of the free-market.
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