tech industry

11/19/2003, 6:05pm, EST

Wednesday, November 19th

Naxos: Apple overcharging for iTunes albums

Apple's iTunes Music Store is currently overcharging customers for albums from Naxos, a leading classical music label, the company said today. According to Naxos, the correct pricing for their albums in the ITMS should be $6, not the standard $10 per album fee currently being charged. Naxos says "We are taking this issue very seriously and are making it a priority, contacting Apple about it almost everyday. Indeed, our president has contacted someone in Steve Jobs' office several times in an attempt to remedy the situation." Typically, a Naxos CD sells for between one third and one quarter of the price of a full-price classical album.


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It's Apple's service
0
11/19, 6:21pm, EST
Apple can charge whatever they want, can't they? It's their service, and they are providing the bandwidth. I imagine they would lose money selling $6 albums.
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No they can't
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11/19, 6:30pm, EST
because they have agreements with the companies that regulate pricing.
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six 'million' dollars
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11/19, 6:38pm, EST
They sell plenty of albums under 10 dollars, mostly those with less than 10 songs.
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11/19, 6:55pm, EST
Interesting... Apple refused to sell albums for more than $10 a pop, but what about selling them cheaper? Does the inflexibility work both ways, or is is just a cap?

If Apple were a retail chain, they could theoretically charge whatever they want, but stores often have pricing agreements with their suppliers--Apple's MSRP, for example--and I think the iTMS is in that category.

I'll also note that if it costs apple 35 cents per song for distribution, they could realistically set that as a bottom cap for the price of an album (tracksX0.35) to protect their investment, but if the price these guys want to set is higher than that, shouldn't that be ok?
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professionalism?
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11/19, 7:08pm, EST
Is this something that they need to be discussing in public? Not very professional if you ask me...
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re:professionalism?
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11/19, 7:14pm, EST
Well...if many of their customers are crying foul ..then it has become a very public issue for them. Therefore a public forum needed to address the masses.
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re:professionalism?
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11/19, 7:20pm, EST
Free advertising - that is all it is. Naxos wants a competitive advantage with pricing, and this is some free publicity.
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Details
0
11/19, 7:23pm, EST
If Naxos really wants to take the fight to the streets and into the public forum, why don't they also provide the details of the agreement to prove that Apple is actually overcharging, not just charging more than they would like.
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Good question!
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11/19, 7:41pm, EST
Naxos CDs typically sell for $6-7 in retail stores. Who would want to buy a 128kpbs lossy version of the real deal, but pay $3-4 more for it? It only hurts iTMS to overcut the price of a smaller label CD, when the whole point is to undercut overpriced CDs by the big labels.
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agreement
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11/19, 7:42pm, EST
It's a flat agreement. 99 cents a song, no wiggle room, no deviations, no special negoations with any one label. Either agree to it or don't. It does work both ways, and usually no one is really estatic over the results, but hey -- it's working so far...
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