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Naxos: Apple overcharging for iTunes albums

updated 06:05 pm EST, Wed November 19, 2003

Apple overcharging on ITMS

Apple's , 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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11/19, 06:21pm | report spam | close Reply |
It's Apple's service

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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11/19, 06:30pm | report spam | close Reply |
No they can't

because they have agreements with the companies that regulate pricing.

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11/19, 06:38pm | report spam | close Reply |
six 'million' dollars

They sell plenty of albums under 10 dollars, mostly those with less than 10 songs.

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11/19, 06:55pm | report spam | close Reply |
Hmm

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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11/19, 07:08pm | report spam | close Reply |
professionalism?

Is this something that they need to be discussing in public? Not very professional if you ask me...

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11/19, 07:14pm | report spam | close Reply |
re:professionalism?

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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11/19, 07:20pm | report spam | close Reply |
re:professionalism?

Free advertising - that is all it is. Naxos wants a competitive advantage with pricing, and this is some free publicity.

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11/19, 07:23pm | report spam | close Reply |
Details

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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11/19, 07:41pm | report spam | close Reply |
Good question!

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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11/19, 07:42pm | report spam | close Reply |
agreement

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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11/19, 07:45pm | report spam | close Reply |
not professional

They should have just mentioned something along the lines of, "We're working with Apple to address this situation and hope to have this rectified very soon-" I would not be surprised to see this "partner" dropped by Apple (and I wouldn't blame them either to be honest-- ITMS doesn't really need the negative publicity (especially from such a small vendor/partner where the margin is apparently smaller (or at least revenue is smaller, than say a larger record company)

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11/19, 07:49pm | report spam | close Reply |
They have problems.

Apple also charges sales tax incorrectly, essentially collecting sales tax when they should not. After almost of month of dealing with Apple Corporate, and the ITMS people they refused to fix the problem. So I stopped using the ITMS. At some point it will bite them cos what they are doing is wrong. But they are so arrogant. Building good products, that are somewhat innovative, with so many fans willing to let them get away with poor behaviour they have acquired a sense that they can do anything they like.

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11/19, 07:53pm | report spam | close Reply |
So Wrong

Those who say "it's a flat agreement" are wrong. Songs are a flat 99 cents, but albums vary in price. The big dudes -- EMI Seraphim Classics for example -- are $6 on iTMS, undercutting Naxos. Naxos has every right to be upset.

And they probably don't care what Apple does. Naxos customers like me will continue to buy the real CDs. It's only hurting Apple.

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11/19, 07:57pm | report spam | close Reply |
Sales tax

Um, Apple does business in all 50 states, and so is required to charge sales tax. You pay sales tax when you buy a real CD, and you pay sales tax when you buy from the iTMS. How is that incorrectly charging tax?

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11/19, 08:01pm | report spam | close Reply |
Nope...

Note that, whatever you want to read into it, this is not just a policy decision. For example, there are several "Seraphim Classics" Classical CDs that have way more than ten songs--19 or more, in fact--and sell for $5.99 for the album in the iTMS.

I did notice that all of them seem to have at least one track that is "album only", although it appears to just be because the track is longer than 8 minutes, not some sort of loophole that lets them mess with the album price (and no, there are more than 6 non-album-only tracks on those).

An example:

http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewAlbum?playlistId=1130143

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11/19, 08:04pm | report spam | close Reply |
Re: Sales tax

Uhm, maybe I shouldn't be saying this, but I NEVER get charged sales tax rom the iTMS, in al th etimes I've bought from it.

I just looked through past emails from iTMS on my purchases, and yup, NO SALES TAX for me. I'm in NYC, so it can't have anything to do with where they do business can it.

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11/19, 08:06pm | report spam | close Reply |
Re: They have problems

What are you talking about? Apple needs to charge sales tax -- in what way are they incorrectly charging you? Like was posted above, they are licensed in all 50 states to collect tax and, therefore, are required by law to do so.

Are they calculating the wrong tax? Too high? Too low? What do you expect vs. what they charge? AFAIK, Apple only collects state sales tax, not local...

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11/19, 08:09pm | report spam | close Reply |
tax

I work at a software company that sells downloads and also can send the customer the CD in the mail... When the customer just downloads, we don't charge tax... when they need the CD shipped, we (by law) have to charge tax, if and only if the customer is in California, where we are located-- (let me know if this is wrong so we can change it! ;-)

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11/19, 08:17pm | report spam | close Reply |
Sales Tax

Many states do not presently collect sales tax on digital content sold over the internet. However if a company has a physical presence in a state, then the state has a right to charge tax if it so desires. At present, sales tax on iTMS sales are collected in the follwoing states: AL, AZ, CO, CT (1%), DC, HI, ID , IN, LA, ME, NM, ND, SD, TN, TX, UT, and WA.

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11/19, 08:27pm | report spam | close Reply |
tax.

Sales tax in some states is charged only on tangible items, i.e. things that get dropped off at your door. Software, and Music downloaded from the web, or ITMS is intangible, and does not require sales tax in some states, California being one of them. So if your are in California, and you buy from ITMS then you should not be charged sales tax. Same with some other states.. Having a presence in the state only applies to tangible goods, and being registered to business in the state has nothing to do with it.

My point was less about how they were doing it wrong, but that they admitted they were doing it wrong and essentially told me to go away, they didn't care. It was arrogant. To me it appears Apple feel they can behave badly here and there simply because they have many people/companies who just love'em regardless of what they do.

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11/19, 08:35pm | report spam | close Reply |
Re: tax.

> My point was less about how they were doing it wrong, but that
> they admitted they were doing it wrong and essentially told me
> to go away, they didn't care. It was arrogant.

Are you serious? Did you write them an email and they responded saying "we do it wrong, we know it, no go bug off?" Do you have a copy of this interaction that you could post? I'm serious, that would be *extremely* arrogant, and very unlike Apple from my interactions with the company, but I would like you to share with us if this is indeed the case.

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11/19, 08:45pm | report spam | close Reply |
naxos is by not small

for those of you that only listen to Britney Spears naxos is quite possibly the leading producer of classical CDs. The price of their CDs 6 bucks or less is actually used as the title of a local public radio show, the six and under show. believe me, htose saying Naxos is doing this for publicity need to get out more. Naxos doesn't need publicity. amongst those that actually listen to and buy classical Naxos is a big friggin name already. Also, saying that bringing this public isn't professional disregards the comment that Naxos has been trying to get to Apple and Steve jobs for quite some time now but have been, as far as they are concerned, ignored. There comes a time when all that is left is to bring it public. Perhaps now Steve will hear about it and tongue lash whichever secretary failed to mention to him that Naxos and their customers are a might bit pissed.

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11/19, 09:07pm | report spam | close Reply |
re: Sales tax

This may come as a great shock to you ..better brace yourself ... Not all states charge sales tax.

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11/19, 09:36pm | report spam | close Reply |
Regarding Naxos

I'm just happy that Apple is carrying Naxos at all, at any price. I do hope they can get this issue resolved, because if Apple doesn't, I'm sure Napster will be happy to make sure they get it right.

I only wish Apple would find it in their heart to get more independent classical labels. While there's occasional good stuff on EMI or Sony or DG, I'm really looking forward to seeing Hyperion (or Helios, speaking of discount) or Collegium, or Harmonia Mundi, or Nimbus, or...

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11/19, 09:46pm | report spam | close Reply |
Album Prices

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?

Some albums sell for more than $10 a pop. I priced several last week that were $12. And it was mentioned somewhere around here that Queen's albums are going for full price (99 cents a song, even if you buy the album).

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11/19, 11:03pm | report spam | close Reply |
So, don't buy the "albu

...buy the individual tracks. The average classical CD has fewer tracks than a standard album, so, conceivably, you could really make out if you just ordered the individual tracks from any particular CD. Obviously, there will be compilations of shorter tracks that will scotch this idea. But here's an example: Naxos' Rachmaninov CD conducted by Idil Biret: it has only three tracks: Piano Sonata No. 2, Op. 36; Variations on a Theme of Corelli, Op. 42; and Moments Musicaux, Op. 16. Total price of the three individual tracks = $2.97, which is actually much less than Naxos' suggested retail.

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11/20, 12:38am | report spam | close Reply |
yep

good point

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11/20, 07:18am | report spam | close Reply |
s'ok

Naxos generally records with orchestra of mediocre quality, and uninspired directors. I would not even spend $6 on a Naxos CD.

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11/20, 12:34pm | report spam | close Reply |
Per song different price

One thing to note: Apple charges $.99 per song. Apple states a CD may cost any price, but no more than it would cost to buy each song individually at $.99 apiece...

Apple recomends they charge $9.99 a CD. But again they stated they could charge any price for full CD's, as long as (again) the total is the same or less than it would cost to buy each song individually at $.99 a song...

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02/22, 06:24pm | report spam | close Reply |
Apple vs. Naxos.

Apple has to lover the prize. Period.
I love Naxos ! more that the "Bid Apple"

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Naxos: Apple overcharging for iTunes albums

updated 06:05 pm EST, Wed November 19, 2003

Apple overcharging on ITMS

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It's Apple's service

No they can't

six 'million' dollars

Hmm

professionalism?

re:professionalism?

re:professionalism?

Details

Good question!

agreement

not professional

They have problems.

So Wrong

Sales tax

Nope...

Re: Sales tax

Re: They have problems

tax

Sales Tax

tax.

Re: tax.

naxos is by not small

re: Sales tax

Regarding Naxos

Album Prices

So, don't buy the "albu

yep

s'ok

Per song different price

Apple vs. Naxos.

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