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WSJ: Downloading music gets more expensive

updated 07:30 am EDT, Wed April 7, 2004

Online music pricing up

The Wall Street Journal carries a story today on the . Apple, for example, is charging $17 for N.E.R.D.'s new 12-track Fly or Die album, while Napster charges $14--both higher than the $13.50 Amazon is selling the physical CD for. All five major record labels are also reportedly discussing ways to raise the price of single downloads, from increasing the price anywhere from $1.25 to $2.50, to bundling hot singles with less desirable tracks or charging more for singles of tracks that have not yet been released in stores.

by MacNN Staff

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Toyin
Mac Elite

Joined: Nov 2000

0

04/07, 07:46am | report spam | close Reply |
Whatever

Personally, I love when an artist don't stick to the $9.99 per album pricing scheme. If you charge $.99 per song despite how many songs are on the album, you can bet that I'm only going to buy the tracks that I like. I win and the record company loses.

If they start charging more than $.99 per song, I won't keep buying music for long.

njfuzzy
Fresh-Faced Recruit

Joined: Apr 2001

0

04/07, 07:47am | report spam | close Reply |
ARGH

Now that it is a success, the record labels want to overcharge for online music too.

Listen, you morons: People don't buy your damn music because a CD isn't worth $18. Paying $10 and not getting the CD, liner notes, etc. was a stretch, but people will do it. Paying $18 would be milking people.

I predict that the record labels will do this. Then illegal downloads will go through the roof and legitimate downloads will die.

CambAngst
Forum Regular

Joined: Aug 2003

0

04/07, 07:48am | report spam | close Reply |
Sigh

Don't these idiots ever learn? This is the sort of c*** that made file sharing such a big thing in the first place.

bipto
Dedicated MacNNer

Joined: Aug 1999

0

04/07, 08:02am | report spam | close Reply |
Not again

These record guys are idiots. Now that something comes laong to pull their bacon out or the fire, they go and ruin it the same way they ruined CDs by doing what put their bacon in the fire to begin with.

Thus ends the Golden Age of legal music downloading.

Now, where did I put that copy of LimeWire...?

nattt
Fresh-Faced Recruit

Joined: May 2003

0

04/07, 08:04am | report spam | close Reply |
Oh dear

Radio is free to the end user. If the end user paid what the radio station pays, then music would be as near as free as possible, without actually being zero. The price charged already on the downloads is an abomination. Music is, quite frankly, so devalued, and the true value of a CD on the open market is just a few of dollars (what you'd get if you sold a cd to a second hand store), not much over the media and packaging costs.

Seqiro
Junior Member

Joined: Nov 2003

0

04/07, 08:05am | report spam | close Reply |
Stupid

I mostly buy independent music, but since the iTunes store opened, I've bought a few more mainstream albums and songs that I otherwise would have resorted to P2P or otherwise just skipped since the price was so low.

Raise that price, and you stop making money off of me because the value is gone. Plain and simple. I've only got so much money to spend and DVDs are a better bargain once you get over $10.

PBG4 User
Senior User

Joined: Feb 2001

0

04/07, 08:07am | report spam | close Reply |
I can't believe it

The record companies will do this and legal music downloading will come to a halt.

Of course the RIAA will spin this as the result of Kazaa and push for more crazy laws.

vickys_box
Fresh-Faced Recruit

Joined: Jan 2003

0

04/07, 08:31am | report spam | close Reply |
The future

Will be artists selling direct to their fans. It's happening now. No record company to bother with; no third party rip-offs.

John G. Stillmank
Junior Member

Joined: Oct 2000

0

04/07, 08:34am | report spam | close Reply |
The whole point

"All five major record labels are also reportedly discussing ways to raise the price of single downloads, from increasing the price anywhere from $1.25 to $2.50, to bundling hot singles with less desirable tracks or charging more for singles of tracks that have not yet been released in stores."

What morons! For me the whole point of using the iTunes Music Store is that I don't have to buy the many crappy songs that are "bundled" on a CD with the one or two good ones. To increase the price by any means is pure greed, plain and simple.

If "all five major record labels" are working on new ways to cooperate to price-fix downloads now, the way they did CD prices before they got caught, then I guess the justice system has more work to do, and we consumers have to start voting with our ears by saying "NO!" to these idiots.

Xapplimatic
Fresh-Faced Recruit

Joined: Dec 2002

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04/07, 08:41am | report spam | close Reply |
Are they whacked?

I think someone just hit them with the stupid stick. Limewire and Caracho, here we come... I've been buying most of my music legally over ITMS, but if the prices go up... The customers will up and go... K?

jmelrose
Forum Regular

Joined: Mar 1999

0

04/07, 08:42am | report spam | close Reply |
The Cost of Doing Busines

"...the true value of a CD on the open market is just a few of dollars (what you'd get if you sold a cd to a second hand store), not much over the media and packaging costs"

Yea, except for those pesky artists and engineers want to be paid to make the CD listenable, and then there's the people who promote the sale of the media and packaging (oh yea, and the music). Plus there's the fact that for every artist who releases an album that makes the label some money, there are several who end up going nowhere, and the label eats the cost of recording and promoting these American-Idol-esque pop culture castoffs.

I think the major labels vastly overcharge and then fail to pass the overcharging on to the artist. However, there's more to it than JUST that. I think those of you complaining about being overcharged for music maybe don't realize that your favorite band doesn't spend 3-6 months in a studio recording, mixing, and mastering an album and it all happens for free. Plus, the band may wish to get paid something as well.

We all know Apple has been selling music at the iTMS at close to a loss. For a media and packaging-free format, it sure seems like those $0.99 is going somewhere fast. Do the math on that, and if Apple's not making much on $1/song, Then buying a physical CD with the added cost of media, shipping, and packaging must raise the cost over $1/song. Not a lot, since the cost of the media would be spread out over the number of songs on the CD, but let's say $1.10/song. That makes a 12 song album worth about $13.20. So $18 is definitely overpriced, but $12-14 seems about right. I think the Universal Music group has made some steps in the right direction on pricing CDs, as they keep most of thier releases in that range.

Your thoughts?

LouZer
Fresh-Faced Recruit

Joined: Nov 2000

0

04/07, 08:53am | report spam | close Reply |
Re: cost

We all know Apple has been selling music at the iTMS at close to a loss. For a media and packaging-free format, it sure seems like those $0.99 is going somewhere fast. Do the math on that, and if Apple's not making much on $1/song, Then buying a physical CD with the added cost of media, shipping, and packaging must raise the cost over $1/song. Not a lot, since the cost of the media would be spread out over the number of songs on the CD, but let's say $1.10/song. That makes a 12 song album worth about $13.20. So $18 is definitely overpriced, but $12-14 seems about right. I think the Universal Music group has made some steps in the right direction on pricing CDs, as they keep most of thier releases in that range.

Umm, except apple isn't MAKING the music, they just sell it. They're operating at a loss because they have to give the labels 66 cents on the dollar. Don't be masking Apple's profit or loss on what the record labels are making/losing (oh, its making).

pastusza
Mac Enthusiast

Joined: Nov 1999

0

04/07, 09:04am | report spam | close Reply |
Don't ever believe....

Don't EVER believe record companies take a loss on anything. If an artist tanks, he owes the LABEL money, and they'll go after him/her legally to get it. The record company is like a big bank. They "loan' you the money to make your album, and you have ti pay them back with the profits you make from the album. Record sales don't make nearly as much money for a band as touring does, since most of the money from the sales of the album goes back to the label.

That's why record labels are scared of FREE online downloads. You give your music away and then you tour. You make a ton of money on touring, and you don't need to record label to be rich.

kerryb
Fresh-Faced Recruit

Joined: Aug 2001

0

04/07, 09:05am | report spam | close Reply |
you all got it wrong.

The music execs are not morons they are greedy morons. How can they justify an increase in the price per song? Apple hit that sweet spot with .99 cent songs and most albums $9.99 an increase this early in the game would pretty much kill legal downloads. They will need to buy a lot more politicians to completely do away with the peer to peer sharing.

bobolicious
Fresh-Faced Recruit

Joined: Aug 2002

0

04/07, 09:07am | report spam | close Reply |
Download quality still...

...doesn't compare to AIFF from CD's, so off to the used CD shop I will (continue) to go...

Yes the stupid stick is a good idea - or perhaps the artists should get together & produce their own 'store', hehe...

z10n
Fresh-Faced Recruit

Joined: Oct 2003

0

04/07, 09:08am | report spam | close Reply |
Good job morons

Here people accept the industry's lame DRM, accept lossy-quality versions, etc., and the industry is already trying to jack up prices?

Maybe they think that people will pay more for instant gratification downloads? That's bullshit. Buying stuff on the net should cost LESS not more, because there's no physical CDs to manufacture, no distribution costs, and no employees to pay to sell your product. Why should I pay more for online downloads when I can STILL buy the physical CD online, for less money, and rip the tracks to any quality I want WITHOUT DRM?

How stupid. If the industry keeps this up, don't be suprised if people start returning to piracy land.

LouZer
Fresh-Faced Recruit

Joined: Nov 2000

0

04/07, 09:09am | report spam | close Reply |
Reasons

All you people whining that this will kill legal downloads, or saying they're idiots and they don't know what they're doing: You are idiots! Of course they know what they're doing. The RIAA wants to get rid of legal downloads. They don't want it to be successful. Its reducing their profit. They don't want people buying just one or two songs from a crappy 12 song CD from some lame-a** one-hit-wonder band. They want you to buy the whole album. Or complain no one is buying the album, blame Kazaa, and push for more copy protection on CDs. (or they're just greedy b******* who see something that works so they'll try to double the cost because that will double their profit!)

And I wish people would stop whining about how you don't get liner notes, cover art, whatever. Hey, MOST people don't read the liner notes. They could give a flying leap.

Oh, and if I'm buying a CD, I'll look on iTunes first, but if its more than 10 bucks, its off to Amazon and Best Buy and comparison shopping. All I know is that the Who's greatest hits album just released is only 9.99 on iTMS, but some new c*** goes for 13.99 or more (good reason to stay away from new stuff).

On the other hand, some people thought there should be a different pricing scheme, charging more for newer stuff and less for older material (although I'm sure these people wanted the older stuff for like 50 cents).

All I know is that, as a music listener, I had bought very little music over the last 10-15 years (I think I had something like 75 CDs in my coollection, total) and didn't do any of the P2P downloading. Since iTms made it easy to download stuff, I've spent more in the last year than I have in the last 10. But that won't happen at $2.50 a pop, that's for sure. (Actually, I blame my iPod more than anything else. I bought it only because I got a really good deal on it, didn't use it really for the first 6 months, then realized "Hey, this actually is useful" - OK, I'm a little sloooowww - and have been buying more and more music since).

cebritt
Fresh-Faced Recruit

Joined: Mar 2000

0

04/07, 09:17am | report spam | close Reply |
$6 is the true cost...

...of a music CD before it hits distribution. Last year, the Austin American Statesman printed a USA Today style pie chart on all of the costs associated with a CD. The cost of the physical materials (CD, case, inserts, wrap) is about 80 cents and the royalties to the artist, production costs, and marketing bring it up to about $6 before it hits the distribution channel. So, if the record companies sell an album online for $10 and give Apple $4, they're making the same amount of money as selling a CD at Best Buy.

z10n
Fresh-Faced Recruit

Joined: Oct 2003

0

04/07, 09:51am | report spam | close Reply |
They idiots, We idiots

They're idiots because legal downloads is the first useful system to be introduced that has any chance at all of combating the piracy problem. More and more people are paying for downloads, (A) because a buck isn't all that much, and (B) because it's so quick and easy to do. Throw in the fact that the quality is pretty damn comperable to a CD, and it's no wonder why iTMS is so popular. The industry is retarded for wanting to kill something like this off, regardless of how much less profit they are taking in, because the market for legal downloads is so huge. Instead of working with the system, all they want to do is fight it. Stupid.

And we are idiots because somehow we believe that because iTMS and other stores came out, the industry has changed it's mind about downloads. Obviously, this story proves that they are just as closed minded as they've always been. They want people to buy their music on their terms, and anybody who doesn't like it is a filthy old Kazaa user. As often times as they've made the "piracy is theft" argument (taking the high moral ground), they've ripped people off by charging insane prices. Legal or not, people are going to rebel against this, and they have. Half the reason piracy exploded is because people are sick and tired of being pussywhipped by the music industry.

Heh. I think I'll just go out now and pirate a few songs, just for fun. I was going to get what I want over iTMS, but this story pisses me off. F**k you RIAA, you greedy a*******.

testudo
Fresh-Faced Recruit

Joined: Aug 2001

0

04/07, 10:12am | report spam | close Reply |
Re: $6 true cost

First, no one sells at cost, so expecting CDs to sell for $6 is naive. Second, the labels 'claim' that some of the cost of the CD goes toward the costs of other artists whose material doesn't sell (this is sort of how cable TV customers get charged an arm and a leg to cover the costs of system upgrades for cable modem users). Second, add in more money to pay for the expensive contracts/promotions for the overpayed divas, boy bands, etc (you know, you're paying more now because some record genius thought Mariah Carey was worth a $100 million recording contract). And then throw in the two or three cents an album that the record company squeaks by on, and you can see, these guys are just ekeing out a living like you and me.

Evan_11
Mac Enthusiast

Joined: Jan 2004

0

04/07, 11:33am | report spam | close Reply |
1.25 a song, 9.99 a album

Makes sense. Most people only want a couple of songs per album anyway. They could actually encourage people to buy the whole album at a discount. I see the online music stores as good way to get people to buy more music. Also to sell the single which is all 95% of music buying public wants anyway. Not as an alternative to going out and buying the album at a physical store. Storage is cheap and the iTunes/iPod interface makes it easy to select and listen to music.

medmuse
Fresh-Faced Recruit

Joined: Nov 2002

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04/07, 11:34am | report spam | close Reply |
Oh please

"...And then throw in the two or three cents an album that the record company squeaks by on, and you can see, these guys are just ekeing out a living like you and me."

Stop it! You're killing me!. That is the funniest thing anyone has ever said. No, really.

testudo
Fresh-Faced Recruit

Joined: Aug 2001

0

04/07, 01:55pm | report spam | close Reply |
Re: 1.25 a song

Makes sense. Most people only want a couple of songs per album anyway. They could actually encourage people to buy the whole album at a discount. I see the online music stores as good way to get people to buy more music.

Ahh, if only the labels were as wise as you. You make a very valid point on the pricing. I have bought several albums because I wanted enough singles off of it to warrant the cost (and then I get exposure to the whole album, and not just the 'hits'). This would be a boon to artists.

However, the only problem here is the labels don't see this as a way to sell albums, just to make money. And what do they care about artists. So, they'll just raise the price of the albums to go along with the price hike of the songs.

KidRed
Professional Poster

Joined: Mar 2001

0

04/07, 01:58pm | report spam | close Reply |
Wow-agreed

Some of these ideas are the very reasons people file share to begin with. They are sick of being robbed by record companies and their sickening greed. They will end up killing downloading for a fee and we'll be back to square one.

bfalchuk
Fresh-Faced Recruit

Joined: Jul 2003

0

04/07, 02:19pm | report spam | close Reply |
Bad Business

This is the story of the RIAA. They consistently get short-term greedy, and miss the long-term ideas. Making legal downloading thrive, yes, at a LOW per song cost, will help them. Otherwise, legal downloads will die, and more Kazaa-type services will continue to pop up.

nattt
Fresh-Faced Recruit

Joined: May 2003

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04/07, 04:25pm | report spam | close Reply |
Un-economic

"I think those of you complaining about being overcharged for music maybe don't realize that your favorite band doesn't spend 3-6 months in a studio recording, mixing, and mastering an album and it all happens for free. Plus, the band may wish to get paid something as well. "

Music is not as expensive as it used to be to make. Why should we pay for the lavish lifestyle of a group hanging out in a studio for months on end? The last recording session I attended recorded 4 songs in one day and cost the singers a few thousand dollars for the musicians, studio and engineer. Or perhaps they should invest in setting up their own small studio and get the costs lower still? Again, there's no need for months of expensive studio time to make a good album - that's just pure "old think".

"Plus there's the fact that for every artist who releases an album that makes the label some money, there are several who end up going nowhere, and the label eats the cost of recording and promoting these American-Idol-esque pop culture castoffs."

Profitable musicians should no be subsidising failures. If they're not economicially viable, they should be dropped.

In reality, music is really cheap to make. But the recording industry needs to keep the production costs high so they can "lend" the production money to the artists and then claw it all back. They make tonnes of profit on all aspects of production, so if production was cheaper, they'd be out of profit. It's in the artists best interest to make music cheap, but the recording industry needs it expensive.

CambAngst
Forum Regular

Joined: Aug 2003

0

04/07, 05:01pm | report spam | close Reply |
What they're fighting fo

What the recording industry is really fighting to protect is their bloated, inefficient business model. The majority of the "cost" of producing music under this model (promotion, distribution, packaging design, artist pampering, payola to ClearChannel in one form or another, legal costs, layer after layer of management) is strictly a product of the corporate excess that has grown up around the music industry. With the application of digital technology and a little ingenuity on the part of the artist, the majority of these costs are completely unnecessary. And that's what truly scares the big record companies. Going from being a company with billions in revenue to being a company with only a few hundred million in revenue is a huge step down in power and prestige, EVEN IF YOU STILL MAKE THE SAME PROFIT AT THE END OF THE YEAR.

The points about the "bundling" of filler tracks and the need to recover the cost of huge record deals given to underperforming prima donnas and one hit wonders are also good ones. Economists call these costs "stranded costs," and in a truly competitive market, they are simply unrecoverable. The fact that record companies can force entire albums down the throats of consumers who only want one song and the fact that they can recover part of the cost of Mariah Carey's record deal by forcing people to pay $18 for some new artist's first album is clear evidence of the collusion and oligopolistic behavior of the recording industry.

bigpoppa206
Fresh-Faced Recruit

Joined: Jun 2003

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04/07, 05:09pm | report spam | close Reply |
Did ya think?

I love how everyone gets into these huge discussions about who did what, how evil the RIAA (who has NO power over the price of CDs) is and how they know exactly what it will take to fix the situation. Did you ever think that maybe it was the artist themselves who set a high price for this download?

HeatherEcsedi
Fresh-Faced Recruit

Joined: Oct 2001

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04/08, 05:35am | report spam | close Reply |
Stop whining

and shell out some more bucks. K ?

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WSJ: Downloading music gets more expensive

updated 07:30 am EDT, Wed April 7, 2004

Online music pricing up

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Whatever

ARGH

Sigh

Not again

Oh dear

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I can't believe it

The future

The whole point

Are they whacked?

The Cost of Doing Busines

Re: cost

Don't ever believe....

you all got it wrong.

Download quality still...

Good job morons

Reasons

$6 is the true cost...

They idiots, We idiots

Re: $6 true cost

1.25 a song, 9.99 a album

Oh please

Re: 1.25 a song

Wow-agreed

Bad Business

Un-economic

What they're fighting fo

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