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Online music sales to increase if price decreases?

updated 05:25 pm EST, Wed March 9, 2005

5-cents-per-song idea


Music companies need to get used to the idea of , according to one recording executive. The Globe and Mail reports that at least one music veteran says that lowering price of online music--to as low as five cents per song--will stop the plague of unauthorized music downloads and also generate hundreds of millions of dollars for musicians and the industry. Sandy Pearlman, a former producer of the Clash and now a visiting scholar at McGill, described the 5-cents-per-song idea at the Music Week conference in Toronto last week.

Others such as the head of the British recording industry also supported the notion of lower pricing as a means to fight illegal downloads. Pearlman said that he had talks with Apple, as he believes that putting all songs in a single search area such as Google or iTunes would be a good solution for the industry. "The extra windfall for musicians and those who own the publishing rights to the songs could be in the hundreds of millions of dollars, or more, Pearlman said his study predicts."


by MacNN Staff

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 industry, digital music/video

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  1. trevc

    Fresh-Faced Recruit

    Joined: Mar 2000

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    03/09, 06:21pm | report spam | Reply |

    Geez

    ... if you sell the song for 5 cents, the company selling the online music makes, 1 cent?

    That model would be tough to sell, but I remember that Apple makes next to nothing on the songs anyways, so maybe could happen, Gee, I'd pay 10 cents myself, with a dollar for the whole CD??? Ain't gonna happen?

  1. gunnar

    Mac Enthusiast

    Joined: Feb 1999

    0
    03/09, 06:50pm | report spam | Reply |

    fat chance

    ya, just like for the last 50 years record companies have been selling records for $1 each so they can maximize volume. come on, they're an oligopoly, they're going to charge more, do less and make as much money as they want.

  1. Eriamjh

    Addicted to MacNN

    Joined: Oct 2001

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    03/09, 08:51pm | report spam | Reply |

    Not gonna happen...

    It could have happened with CDs anytime, but never did. the question is will lowering online prices reduce the so-called "losses" they claim to be having due to file sharing?

    It would be nice, for even $0.20 a track, but I doubt it will ever happen.

  1. horvatic

    Fresh-Faced Recruit

    Joined: Apr 2002

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    03/09, 08:52pm | report spam | Reply |

    Interesting lower prices?

    We were just reading last week about raising prices for music and Steve Jobs not being very happy about that. I'm shocked that there are some recording company executives that actually use there brain. Unfortunately none of them were from the U.S. and I think there the ones that are greedy. This model would easily work with iTunes as pointed out that the iTMS doesn't really make money on selling the songs. They make it selling the iPods.

  1. ecrelin

    Junior Member

    Joined: Oct 2000

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    03/09, 09:14pm | report spam | Reply |

    efficient use of language

    horvatic, no offense, in fact kudos maybe. the english language has always been slammed for it's difficulty with homonyms so maybe using the word there properly AND again for the possesive of a plural, there for their, in the same sentence AND then to replace a contraction in the very next sentence, there for they're, could be construed as a godsend. It would cetainly make reading and writing easier. Sorry long day, pissed and tired, thanks it made me smile, had to comment. Anyway y'all are right, nobody's gonna do it, can't support infrastructure on 5 cents a song, no margin, no sale.

  1. beeble

    Fresh-Faced Recruit

    Joined: Mar 2004

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    03/09, 10:04pm | report spam | Reply |

    Infrastructure

    Maybe they are talking about the music companies making 5 cents a song, but charging 5 cents to the customer is just impossible. It costs most of that to send the song down the wire, let alone store it, put it into the system, catalog it, create the preview, etc. And that's just basics for delivery. There's iTunes backend software development, accounting, Apple's profit, the labels profit, artist royalties. At 99c it's a small pie with dozen's of pieces, and most of those pieces are of a fixed size. The pie can only get so small if nobody makes any money (like that's going to happen) and at that point it's still going to be a lot more than 5c a song.

  1. rok

    Fresh-Faced Recruit

    Joined: Mar 1999

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    03/09, 10:23pm | report spam | Reply |

    you're missing the tax..

    you all are missing one important point of the proposed model... each computer would have a tax on it. if this sounds familar, it's because it is, from canada anyway, when they added a tax on EVERY DIGITAL RECORDABLE MEDIA because they just assumed it was all being used to pirate songs, and therefore they were justified in tacking on the extra tax to subsidize the poor record labels lost profit. of course, this tax just recently got bounced on its ear, and yet it comes back AGAIN, from the same COUNTRY. now i lived in canada for a while, i like the place and a lot of the folks up there, but some of the folks in charge of digital distribution models need their heads surgically removed from their rear-ends.

  1. LouZer

    Fresh-Faced Recruit

    Joined: Nov 2000

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    03/09, 10:26pm | report spam | Reply |

    Missing the point

    What about subscriptions? At $15 a month, I could load up a crappy Dell DJ with tons of music and listen to it for 24 hours a day (because the Dell gets like 30 days of battery life, right?).

    Anyway, the point is, under this system, how much is the labels getting, and how much are the musicians getting? And then in the next month if I just listen to "Afternoon Delight" 5 times and that's it, does the "Starland Vocal Band" get all the money? I'm just curious how the subscription model somehow is good for the RIAA and how they're making money. And if they can accept that, how come they can't accept that same cost for 'purchasing' vs. 'renting'?

  1. Jay Weiss

    Fresh-Faced Recruit

    Joined: Dec 2001

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    03/09, 10:28pm | report spam | Reply |

    It's what radio stations

    5 cents a song is what radio stations pay for each playing of a song on the radio. This is paid to the RIAA which logs the information and then sends payment out to the record companies who, in turn, pay the artists. RIGHT!

    Have you ever asked yourself why the RIAA is so interested in stopping illegal copying. It's because THEY are getting cheated out of THEIR money. The RIAA takes 10% of the money received as an administrative fee (I have been told this, but have not checked it out).

    However, the model discussed is a PAY-PER_PLAY model and you don't "own" anything. They will make it possible to block your playing of the band is touring or releasing a new album. Say, doesn't this sound the the movie industry's pet project, DIVX, which was tried a few years ago. That didn't work and neither will this.

  1. zzarg

    Forum Regular

    Joined: Sep 2004

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    03/10, 06:37am | report spam | Reply |

    AllOfMP3.com

    that's kinda the model AllOfMP3.com have taken.
    While the legality is very dubious, the service, range and pricing possibly says something about why they're doing so well.
    If I could use iTMS in AU, it had a range from 70s to today and the pricing was realistic without restrictions I'd buy more music rather than just support local bands who distribute on MP3 and give me quality and choice that the Music Biz doesn't want me having (more Britney or Kylie anyone ?)

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