Apple renews iTunes flat-rate contracts
updated 06:50 pm EDT, Mon May 1, 2006
iTunes flat-rate contracts
Apple on Monday said it had renewed contracts with the four largest record companies to sell songs through its iTunes for 99 cents each, according to The Financial Times. The agreements were signed with Universal, Warner Music, EMI and Sony BMG, following months of public jockeying on song pricing. The music labels wanted to implement variable pricing to charge more for more popular songs, while Steve Jobs, calling the Labels "greedy," wanted keep the flat price structure. The agreement is seen largely as a defeat for music labels, as they struggle to regain control of the online music industry, which is dominated by Apple's iTunes but continues to grow rapidly. The report says that online music sales surged 194 per cent last year to 352 million songs, according to Nielsen Soundscan. Overall album sales fell 3.9 percent. Rival Napster has begun to offer free songs via the Web in a effort to break Apple's stranglehold on digital music, which accounts for about 5 percent of overall album sales.











Ha Ha
05/01, 07:05pm reply
I guess the record labels prefer money. Next, the oil companies and taxes.
tindrum
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Joined: Apr 2004
Follow the money
05/01, 10:06pm reply
Hey does anyone know how much the profit differential is for the labels of on-line vs. disc? I assume the cut for the musician is the same, so the real "problem" for the record companies would be whether Apple's minimal overhead (5-6%?) is greater than the difference between the price of CD's and their overhead (production, transportation, storage, etc.) I can't see that and I can't see that they are losing any money with iTunes.
MacnnGregor
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Joined: Apr 2004
heh
05/01, 10:08pm reply
when the record labels actually accept the offer re-made by Apple shows that Steve was right- they are greedy.
Who in their right mind wants to pay more than a dollar for a song is beyond me, maybe possible I guess, but just not right in the aspect regarding an artist who might get sold for 50cents on the top of the charts next to another artist selling for 2bux...
it's just ethically if not morally wrong
Flat rate music is the only way to go imho.
Raccoon
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Joined: Nov 2005
Just remember
05/02, 01:00am reply
Digital sales only represent about 6% of total annual music sales. I still believe some executive was having a martini one day and said, "You know, it would be funny if we tried..." and this whole thing was blown out of proportion by some over-zealous reporter.
bigpoppa206
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Joined: Jun 2003
smiles...
05/02, 05:30am reply
Just having a big smile cross across my face.
So much for the labels 'taking Apple down'.
Can't even play poker properly - all talk, and no bite.
ZinkDifferent
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Joined: Jan 2005
ha!
05/02, 07:54am reply
It's too bad Apple isn't big enough to go into the music biz; they have a history of appreciation for the arts and the smarts, in glaring contrast to recording interest. As far as the biz is concerned the artist is the absolutely least important part of the equation, unless they hit a cash cow like Michael Jackson or some other such concoction.
brainiac_7
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Real
05/02, 11:15am reply
Just have to love how Real is trying to do things to knock off iTunes. They still don't get it that PEOPLE DON'T WANT TO RENT MUSIC.
typoon
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Joined: Oct 1999
Re: heh
05/02, 11:30am reply
when the record labels actually accept the offer re-made by Apple shows that Steve was right- they are greedy.
Who isn't greedy. You don't think Apple isn't greedy. Why do you think Steve's insistent on the 99 cents pricing? Because he cares about you, the consumer? Please! If that was the case, he'd stop the assembly line of macs and start yelling at his engineers to stop making the c*** they're making and fix the problems with their current crop of computers. But, alas, its the same old same old.
Apple is insising on the 99 cent a song pricing because they think it will keep their sales at their current levels and keep their profits coming. They balk at multi-tier pricing because their overall cut would end up being less. Enough said.
Who in their right mind wants to pay more than a dollar for a song is beyond me, maybe possible I guess, but just not right in the aspect regarding an artist who might get sold for 50cents on the top of the charts next to another artist selling for 2bux...
I don't know. A lot of people used to buy CD-singles. And they were $3+. The younger generation, you know, the ones who just spend their parent's money without care, isn't going to really care if they have to spend $2.50 for some new hit. h***, they used to spend $10 for the CD just to get the song. They apparently are willing to spend more than a dollar to download music to their cell phones. They spend $$ to get ring tones.
And I think if Steve Jobs started selling songs at 89 cents, and they wanted to raise it to 99 cents, you all would be "Who'd want to spend $1 for music???"
it's just ethically if not morally wrong
How is it ethically or morally wrong? And where do these ideals come into play with pricing of music. We're not talking about something sacred! Its a freakin' song.
There's nothing ethically wrong about charging more for high demand items. That's capitalism. Let the market decide a decent price.
Flat rate music is the only way to go imho.
And that's you're opinion. The labels think variable pricing is the way to go. They look at all other media, like CDs, DVDs, books, etc, and see that new and more popular stuff gets sold for more then the c*** in the bargain bin. Why shouldn't they be able to charge more? If no one buys it, they lower the price.
The only reason apple wins here is because the iTMS has the marketshare and clout at this time. If Apple loses their marketshare (I know, I know, apple is god and will always be dominant, but I'm talking theoretically here), the labels will have a lot more leverage to bend the contracts their way.
testudo
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Joined: Aug 2001
re
01/22, 04:35am reply
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