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Music Industry to Raise Downloads Price above 99 cents


foogledricks
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http://financialtimes.printthis.clickability.com/pt/cpt?action=cpt&title=FT.com+%2F+Industries+%2F+Media+%26+internet+-+Top+music+labels+try+to+raise+prices+for+downloads&expire=&urlID=13377606&fb=Y&url=http%3A%2F%2Fnews.ft.com%2Fcms%2Fs%2F3d9b6fee-892d-11d9-b7ed-00000e2511c8%2Cft_acl%3D%2Cs01%3D1.html&partnerID=1744

 

Just when downloadable music is becoming legitimate, they want to raise prices. Newsflash greedy music industry. Illegal downloads is huge problem fueled by expensive CDs and the appeal of downloadable music. Most people I know think 99 cents is TOO expensive for a song (I actually disagree). Raising prices would be a bonehead move that would stifle legitimate online music growth, stimulate piracy, and piss your customers off.

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It's boring when everyone agrees. So how about this: Although 99 cents is on par with the current unit costs of songs on CDs, people usually buy CDs for only a few songs. So in a sense, those few songs were subsidizing the rest of the songs. With this new business model, the only way to subsidize the creation of full albums, would be to disproportionally raise the price of the most popular songs, or to uniformly raise the price of all songs. So who can blame them?

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It's boring when everyone agrees. So how about this: Although 99 cents is on par with the current unit costs of songs on CDs, people usually buy CDs for only a few songs. So in a sense, those few songs were subsidizing the rest of the songs. With this new business model, the only way to subsidize the creation of full albums, would be to disproportionally raise the price of the most popular songs, or to uniformly raise the price of all songs. So who can blame them?

 

 

Good point, I don't like it but I have to agree with your logic. Since picking up a new MP3 player at the begining of the year I've stopped using WinMX and the like and started using those $15 Napster cards. I don't have to worry about song quality or DLing some virus much less having the RIAA on my ass, if they raise the prices though I'm going back to the old fashioned way :mad:

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It's boring when everyone agrees. So how about this: Although 99 cents is on par with the current unit costs of songs on CDs, people usually buy CDs for only a few songs. So in a sense, those few songs were subsidizing the rest of the songs. With this new business model, the only way to subsidize the creation of full albums, would be to disproportionally raise the price of the most popular songs, or to uniformly raise the price of all songs. So who can blame them?

 

It is good logic except for the fact that the music you download from iTunes/Napster/insert legal music store here is lossy. If you're going to charge me on par with the current costs of songs on CD then I want lossless perfection.

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It is good logic except for the fact that the music you download from iTunes/Napster/insert legal music store here is lossy. If you're going to charge me on par with the current costs of songs on CD then I want lossless perfection.

I think it is fair to say that the vast majority of their customers can't tell the difference between a 128kb MP3 and DVD-Audio.

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I think it is fair to say that the vast majority of their customers can't tell the difference between a 128kb MP3 and DVD-Audio.

 

That's the easy response.

If that's the best arguement against improving the quality of downloadable music then why does the record industry bother spending cash on million-dollar per week studios? Why go through the expense and trouble of recording on professional gear and recording quality audio tracks to CD? Why not record all albums in a $10,000 home recording studio? The cost savings would be immense!

The vast majority of music customers can't tell if an album was recorded in some guy's bedroom or a mega-million dollar studio. So why do it?

The 'quality' arguement doesn't fly.

 

It all goes back to intellectual property. Any question of music downloading boils down to who owns the IP. You're either on one side of that fence or the other.

 

Disclaimer: At this point I should point out that I do not think the current state of over-produced, distorted recordings indicates my definition of 'quality recordings' -That's just an engineering/marketing trend in recording; the point is that even these albums are being produced in mega-expensive studios on top notch professional equipment.

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The 'quality' arguement doesn't fly.

Guess I struck a campy chord. But you couldn't hear it, because it was compressed too much.

 

I think your response over extended the scope of this thread, as well as my most recent post that you were responding to. I was simply saying that sound quality is not on the mainstream's radar with regard to pricing.

 

Perhaps sound quality, surround sound, and various extras (a la DVDs) might be a lucrative market to explore. "For $20 a month, you can subscribe to ITunes Plus, giving you access to all these extra features!" Maybe that is where you were going.

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I think your response over extended the scope of this thread, as well as my most recent post that you were responding to. I was simply saying that sound quality is not on the mainstream's radar with regard to pricing.

 

Huh? Ok...that's fine. It's alll a perfectly logical flow of thought but Ok...if you can't hang with it I'll move on.

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It's boring when everyone agrees. So how about this: Although 99 cents is on par with the current unit costs of songs on CDs, people usually buy CDs for only a few songs. So in a sense, those few songs were subsidizing the rest of the songs. With this new business model, the only way to subsidize the creation of full albums, would be to disproportionally raise the price of the most popular songs, or to uniformly raise the price of all songs. So who can blame them?

 

It's boring if I agree too. I say with this new business model, the pop stars being shoved down our throats should start making better music across the board and stop making albums with one or two tolerable songs and the remainder as utter and complete dreck.

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I don't see a problem here. If they fail meaning that people don't go paying those prices and the sales decline then the hit in the pocketbook will cause them to drop prices. This is a natural thing with regards to economics.

 

Them raising prices is no excuse/reason for anyone to go stealing music.

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Why go through the expense and trouble of recording on professional gear and recording quality audio tracks to CD? Why not record all albums in a $10' date='000 home recording studio? The cost savings would be immense!

The vast majority of music customers can't tell if an album was recorded in some guy's bedroom or a mega-million dollar studio. So why do it?

The 'quality' arguement doesn't fly.

[/quote']

 

Two things. First, I can't help but wonder that if this in fact does still happen (as the norm), that it's a way for industry executives to justify their salaries...er, I mean the retail cost of music, and nothing to do with quality.

 

Second, and related to the first, the costs of music production have dropped precipitously in the last decade. You might not get a fully 'pro' sound for $10k, but for $50k? Probably. Multi-million dollar studios are a relic of the past.

 

This is one more reason why the cost of music is inflated. Prices over the last decade should be dropping if they followed the production costs (including CD replication and even printing costs for CD artwork).

 

The costs should further decline for online music, if the price accounted for the fact that it's all digital data, with no shipping overhead and a one-time conversion cost (uncompressed->MP3/AAC/WMA).

 

I think all of this points to greed, pure and simple, in the recording industry.

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I agree that the market will generally figure it out. For videogames in particular I think this is true. But for downloadable music, it is a slightly different story. This is an emerging way of purchasing and listening to music. It is tied to law suits, new products, new laws, new business models, etc. So the timing and unique situation are significant factors that complicate things a bit. I don't think it is a simple freemarket scenerio.

 

Videogame prices on the other hand, is a lot more simple. Let God sort it out.

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The costs should further decline for online music, if the price accounted for the fact that it's all digital data, with no shipping overhead and a one-time conversion cost (uncompressed->MP3/AAC/WMA).

 

To be fair, there is still a shipping overhead for online music delivery as bandwidth & server costs need to be factored in.

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I think all of this points to greed, pure and simple, in the recording industry

It's a business. It's really hard for us to put ourselves into the shoes of the company whos assets are being daily stolen from them by people who don't care. Let's face it, we all know its illegal and immoral and yet some do it anyway.. Mostly out of no fear they will be caught and turned in and prosecuted.

 

Any business gets greedy at times but the market will force it to lower prices if its too expensive.

 

I have a feeilng this is a futile debate on my part though.

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To be fair, there is[/b'] still a shipping overhead for online music delivery as bandwidth & server costs need to be factored in.

 

To me, that's akin to rent paid by a retail store. In any event, I don't think the RIAA would even try to suggest that they are raising prices to cover bandwidth costs any more than they would raise CD prices to cover the cost of rent.

 

It's a business. It's really hard for us to put ourselves into the shoes of the company whos assets are being daily stolen from them by people who don't care. Let's face it, we all know its illegal and immoral and yet some do it anyway.. Mostly out of no fear they will be caught and turned in and prosecuted.

 

That's all well and good. But what does that have to do with raising costs on digital music? People have clearly demonstrated the willingness to pay for downloadable music, Apple alone is over 200 million songs downloaded.

 

Aside from that, I don't buy excuses like "it's a business" - it's much more like a monopoly that controls how and what music gets out, sets the price, and decides what the artists will get in compensation, which is very very little.

 

You can see that this model was workable up until the 90s when technology started to undermine that monopoly; before music was easily transmitted digitally, before you could produce a professional recording in your bedroom, and before those 2 things meant that a record label could offer their own music for downloading directly, skirting the industry model.

 

So, yes, it's a business, but I maintain it's a business that is set up on morally questionable ethics. One designed to make music a commodity that shafts the people who create it. One that creates consumer demand by controlling what gets on the radio (when radio mattered). Up until recently, if you wanted to make a living by creating music in the US, you had no choice but to do things their way by their terms. Sorry, but that's not cool to me.

 

So I find it interesting to watch the RIAA run around in circles as their reason for existence slowly erodes. Even without illegal music downloading, which I'm not defending, they are becoming increasingly irrelevant. I look at these moves to boost online music prices as nothing more than an attempt to keep the cash-cow well-milked, to keep CEOs well-paid, and marketing budgets fully fattened. IMO it's doomed to fail eventually because too much of what they do can be replaced by a bedroom studio and an internet connection, and that's only becoming more true as time goes by.

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Aside from that, I don't buy excuses like "it's a business"

Not an excuse, it's a fact. Regardless if they are a monopoly or not really doesn't matter because if people quit buying music and don't justify them downloading music for free by just not buying it and not downloading, the studios will take notice and change prices.

 

They survive because we pay them. If we don't and don't download music, then they will realize we want this and are willing to pay less but not the price they raised it to. This is grade school economics.

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Not an excuse' date=' it's a fact. Regardless if they are a monopoly or not really doesn't matter because if people quit buying music and don't justify them downloading music for free by just not buying it and not downloading, the studios will take notice and change prices.

 

They survive because we pay them. If we don't and don't download music, then they will realize we want this and are willing to pay less but not the price they raised it to. This is grade school economics.[/quote']

 

I'm not sure I'm reading you right, but it looks like you're suggesting that if consumers want to send a message to the RIAA about high prices, they should stop buying music.

 

I've seen this suggestion before, and frankly I think it's outrageous to ask people, in effect, to 'pay up or shut up' - it's a very sad commentary that the only way to protest the price of art is to go without it altogether. You'll notice that very few industries work on this principle. In general if you don't like the price of something, you find it cheaper from somewhere else. Guess what? You can't do that with music from the RIAA because they own it all!

 

Of course, as I mentioned above, this is changing. More and more artists and indie labels are taking advantage of digital technology to allow listeners to buy directly, which is wonderful. I frequently shop at Bleep.com, even though it's more expensive than iTunes or other services, in part because I like supporting a label that is outside the system, but also because they offer music I like.

 

It's not so much that I feel personally victimized by the RIAA, I don't. I don't like much popular music. But I'm still bothered by their monopolistic ways, and their bullying tactics. I'm frankly happy to see their grip on the music industry crumble, and mildly amused to see them struggle to maintain it. They may succeed, but I doubt the new system will support them in the comfort to which they are accustomed. Which is to say they will have to evolve or die in the face of competition from independent labels and eventually artists themselves using technology to eliminate the middleman that is the RIAA. They will have to evolve because their entire system is set up without competition in mind.

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