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Apple opens \"Pandora\'s box\" for pricing digital music

updated 09:45 am EDT, Wed October 27, 2004

Apple opens Pandora\'s box

Columnist John C. Dvorak says that Apple's iPod/U2 bundled music announcements open a , saying that Apple's pricing simple bundles U2 music at its cost in order to sell more iPods, according CBSMarketWatch.com: "The industry is gah-gah over this deal because it appears to lower the price of music on a cost-per-song basis. In fact, this is an illusion. While new music that is sold on a downloadable basis tends to send about 65-cents to the record companies, other deals can be struck for old music... Old cuts, when licensed for a compilation, range in price from 4-cents a track to 18-cents a track with today's average hovering at about 13-cents...Thirteen-cents-a-track almost exactly accounts for the $50 premium on the U2 iPOD which sells for $349. The same iPOD without the music is $299 and quite profitable at that high price. Essentially Apple is giving the buyer the music at its cost to sell more iPODS."




by MacNN Staff

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Comments

  1. jimothy

    Joined: Dec 1969

    0

    Digital box set

    The U2 iPod does NOT come with the 400-track "Complete U2." It only comes with a $50 coupon off the "digital box set," which sells for $150. So the $50 premium is simply offset by the coupon, but there's no 13 cents per track thing going on here.

  1. iolaire

    Joined: Dec 1969

    0

    That is the point.

    Apple has always said that the goal is to sell more iPod's not get rich on sub-dollar transactions?

    He says "If Apple's business model is to make 35-cents or so on its downloadable 99-cent music, ...." - this is completely not Apple's business model - Steve has publicly stated that the goal is to sell more iPod's via iTunes.

  1. dece

    Joined: Dec 1969

    0

    Dvorak Bloviates Again

    Let's not forget this is John Dvorak, whose personal motto seems to be "bash Apple first, check facts later." Even as Ziff-Davis strives to include the Mac into the greater PC community, their back-page monkey insists on throwing his c***, as if any of us are impressed.

  1. petex

    Joined: Dec 1969

    0

    It's 37 a song

    The digital box set comes in at 37 a song. You can look at the special edition price difference in many ways. $50 for different color and the U2 signatures, and 400 songs for the price of 267, or 400 songs for the price of 400 (133 of which are pre-paid) and the different color and U2 band stuff for free. There is also a large range of intermediate weightings, but the extremes tell you most of what you want to know.

  1. SteveTech

    Joined: Dec 1969

    0

    Dvorak

    Does this guy ever say anything worthwhile?

  1. eldarkus

    Joined: Dec 1969

    0

    pricing...

    "That's because the 65-cent licensing rate should only apply to new music, not old tracks. Old tracks should be selling for less than 50-cents with 13-cents going to the labels. With really bad material where the labels get the rock bottom 4-cents per track there is no reason not to sell these songs online for 25-cents."

    If thats the case, then why are record companies still selling old albums for over $10? shouldnt they be the first ones giving discounts? I would understand if all the other music stores offered older songs for cheaper.. but they dont! Why should this fall on Apple? A weak arguement and I see no controversy.

  1. nat

    Joined: Dec 1969

    0

    uh

    a promotion, all to sell more of something! dang it all! i wonder how many other promotions are out there doing the same thing!
    this is the guy that, since being fired from a mac pub, has made it his goal to trash any and everything apple/mac/macusers/ipod... you name it.
    who can forget the time he dedicated an entire article explaining why all mac users are perverts. not annoying, not a pain in the neck, not obnoxious, but perverts.
    yeah, the voice of reason.

  1. uhanna

    Joined: Dec 1969

    0

    the usual

    Between John Dvorak and Lance Ulanoff , these two are the most worthless people in this industry and why ANYONE gives them credibility or a platform to write or speak is beyond me.

    JD lives to see Apple fail so why even bother writing a column.
    There's nothing good about this fool.

  1. testudo

    Joined: Dec 1969

    0

    Wait a minute

    This is all about selling more iPods? WTF Apple! Don't you know its supposed to be about selling LESS iPods! Geesh, Jobs & company just don't get it (or, taking the criticism of some of how the iPod photo will be a flop, maybe they do.....)

  1. lmhaffner

    Joined: Dec 1969

    0

    i*POD*???

    Well I guess I have another idiot filter marker. iPOD will join MAC in denoting articles and comments to ignore. Of course Dvorak was already in there, so maybe this is overkill.

    One wonders how one can be a writer (and especially a supposed *journalist*) without actually caring to write things correctly.

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