[puggsly]

1) Competition is great but when dealing with such a controlled industry there are times where you want a player large enough to keep the industry in check. Apple has already shown that it is willing to hold the line on pricing even though it caused at least a short term negative impact. NBC's pulling of TV shows from iTunes is a prime example as is the current $.99 price celling that Apple has held on to. (don't get me wrong here Apple is doing it because it makes their other products more attractive, but still I like the result). So, if iTunes becomes just 1 of 5 music strong services and the labels want to put out a new track for $2.99, it is likely that a couple of the smaller distributers will accept it, and the labels will not offer the track to Apple. The idea here is it takes a monopoly to fight a monopoly.

2) Yes! Because Apple has given the same distribution terms to independents as they have to big labels, many labels are giving larger cuts to the artists. Where the big labels might give 3-10 cents per track some indies are paying as much as $.50 per track. This puts pressure on the big labels, and should eventually help everyone.

3) It is true that MP3 are more common that AAC, the same could be said about VHS vs DVD but I still recommend that my friends stop purchasing VHS tapes many years ago. I would say the same thing about MP3 and AAC. Don't buy a music playing device that will not support current formats and start phasing out older media usage. Just my thoughts.

[natmusak]

Totally agree. :D Just trying to figure out ibeetle's thought process.

[puggsly]

Just to follow up on some people's examples of how iTunes needs competition.

1) Amazon only started offering tracks after Apple had convinced EMI to deliver DRM free tracks and actively stated that they wanted all music to move DRM free. Some times concessions need to be made to break down walls, and Apple's willingness to charge $1.29/track is more of a statement of how important moving to DRM was to them then evidence of a money grab (as it is unlikely Apple saw any of that extra money).

2) The lag you might have seen in Indies getting their music available in the plus format probably had more to do with the logistics of getting updated files than a delayed response to Amazon.

3) For those who don't think Apple offers discounts, you just don't pay enough attention. Now they don't give away music at a loss, but they have negotiated some good deals for iTunes users. I just looked at some of the indies on the iTunes front page:

"Hercules And Love Affair" $7.99 for 13 songs(iTunes) $8.99 for 12 songs (Amazon)
"Lost Together" $9.99 iTunes......Not Yet available Amazon no price
"Feel the Same" $4.95 Both
"Mingle" $9.99 iTunes $8.99 Amazon

To be fair, looking at the under $5.00 section on Amazon, I found:

"Brothers & Sisters" $2.97 iTunes $2.67 Amazon
"Musique Vol 1" $9.99 iTunes $8.99 Amazon --- Odd for a under $5.00 title?
"We Sing. We Dance. We Steal Things" $9.99 iTunes (not plus) $3.99 amazon.

Bottom line, competition is good for consumers and bad for distributers, so why do the labels want to encourage competition so much that they would manipulate the market by giving DRM free license to all but one company? Apple has more to loose if music prices go up so I trust them to work harder to keep them down.

[natmusak]

Some good points puggsly, which reminded me iTunes also has a free music section (I think they have one for every kind of media - movies, tv shows, etc.), iTunes has a $0.99 movie rental every week, and best of all, they really have an outstanding podcast database. There are tons of music podcasts, some of which are put up by the artists themselves.

[George76]

[quote name='natmusak']
> [quote name='George76']
> >

natmusak said:

> > Amazon sells some of its music at $0.89, some of it at $0.99. Why? So the big music labels could charge more for the big name sellers and sideline the less popular artists.
>
> Except the flaw in your argument is that it is the top-selling tracks that go for the $0.89 price and the top selling albums drop to the $8.99 price. It doesn't matter whether it's a big name artist or not.

I'm not horribly familiar with Amazon's MP3 store, but looking through their Top MP3 Songs and Top MP3 Albums categories, I found many $0.99 songs in the former and many $9.99, $10.99, and some $12.99 albums in the latter. So from what I can tell, your statement isn't very accurate. Not calling you a liar, but where are you getting your information?

Actually, the $0.89 and $8.99 information was from early reports on the Amazon mp3 store, like this quote from an earlier Macworld article: "Amazon MP3 offers the top 100 songs for 89 cents each and the top 100 albums for $8.99, with most albums priced from $5.99 to $9.99."

Maybe Amazon has changed that policy. Or maybe they can't keep up changing the prices fast enough so the Top 100 ends up with songs on it at $0.99 instead of the lower price.

Quote

> And to Amazon's credit, they have these wonderful things called "sale prices" that are pretty much a foreign concept to Apple. Every day, Amazon has an album going for a considerably cheaper price than normal. The other week when the new Coldplay album was released, I was able to pick up their earlier albums "Parachutes" and "A Rush of Blood to the Head" for $1.99 each. Over the weekend, I picked up a Ramones album for $1.99. Every Friday, Amazon has 5 albums on sale for $5 each. I guess someone will say it's a desperate attempt to gain customers. Guess what? It's working on me. How many others is it working for as well?

Those "sale prices" are interesting, but they're also, as you note, temporary. You miss them, you'll be paying the normal amount. I do question if these deals are Amazon's idea considering the labels really have the final say. Also, while Apple initiated the $0.99/song ideal, I question if they are the ones holding back deals like these. Remember, the labels are very much colluding against Apple in an attempt to regain some control. Who knows?

Yes, it's like any sale. It doesn't last forever; It's very much like they're "Gold Box" deals where one offer lasts all day or until sold out and then other offers change every 4 hours. But it's also not much effort to hit Amazon.com once a day to see if you're interested in today's deal or not.

I'm not really sure if the labels could stop Apple from charging lower prices. Most of the time, retailers pay a set price to the product supplier and are then free to charge what they want. I'm guessing Amazon might be losing money on their discounted items, but from my point of view that possibility is irrelevant.

Quote

> > I don't even want to think what percentage the artists actually get from Amazon after their label takes their share.
>
> I'm sure it's just as bad as the percentage they get from iTunes or CD sales.

Oh, so your assumptions are better than my assumptions? :D

Touche...but again without some form of proof, I think it's nonsense to assume that iTunes is being more fair to the artists than any other retailer.

I also really don't get your comments about how artists should be treated equally and everything charged the same price. Sorry, but some artist's music IS worth more than others. The consumer sets their worth. If 50 million copies of the latest Britney Spears albums are sold and some indie artist only sells 5,000 copies, the market has stated that Britney's album is worth more. Whether you like that or not, that's the way it goes. You're also ignoring how much went into making that album. 100+ people may have worked on that Britney album, where there were only 10 on the indie album. Thus production costs were higher and things that cost more to produce generally garner higher prices. To me, an analogy would be why is it okay for a car from Lexus to cost more than a Volvo?

[Zooot]

After welcoming me to the service, the Rhapsody server gets hung up and will not allow download to my Mac. Canceled service.

[natmusak]

>{quote:title=natmusak wrote:}{quote}
>Those "sale prices" are interesting, but they're also, as you note, temporary. You miss them, you'll be paying the normal amount. I do question if these deals are Amazon's idea considering the labels really have the final say. Also, while Apple initiated the $0.99/song ideal, I question if they are the ones holding back deals like these. Remember, the labels are very much colluding against Apple in an attempt to regain some control. Who knows?
>

George76 said:

> Yes, it's like any sale. It doesn't last forever; It's very much like they're "Gold Box" deals where one offer lasts all day or until sold out and then other offers change every 4 hours. But it's also not much effort to hit Amazon.com once a day to see if you're interested in today's deal or not.
> I'm not really sure if the labels could stop Apple from charging lower prices. Most of the time, retailers pay a set price to the product supplier and are then free to charge what they want. I'm guessing Amazon might be losing money on their discounted items, but from my point of view that possibility is irrelevant.

True. I posted some examples of iTunes discounts, some of which are exclusive, in the post above your response.

>

George76 said:

> ...without some form of proof, I think it's nonsense to assume that iTunes is being more fair to the artists than any other retailer.

I'm enjoying this discussion as it's actually requiring me to really back up what I'm saying. :D Searching for some answers, I came across a couple articles on the subject.

The first, written two years ago, actually sounded like it was going to make your argument correct as it describes Weird Al Yankovic's assertion that he actually made more money in the end through CD sales than iTunes. The truth, as I expected, was the label took more off those digital tracks when he renegotiated his contract. What I was really looking for and found was an idea of what iTunes pays. Apparently it ranges from $0.65 to as much as $0.80 per song, which comes out to 66%-81%. I have a very hard time believing CDs, which require packaging, retail shelf space, and shipping charges end up making the artist more than digitally downloadable tracks, especially considering iTunes is now the number one music store in the U.S. above Wal-Mart and Best Buy.

Link: http://digitalmusic....r-some-artists/
Note: Amazon is mentioned, but they're discussed pre-Amazon MP3 Store.

The second article, written at the end of that same year, 2006, appears to agree with me. It states:
"Although you might think iTunes is a licensing-type deal - because unlike sales to traditional retailers such as Wal-Mart, the labels do not sell individual units to iTunes - they license the catalog. Yet the labels treat income from iTunes as sales. The significance of this is that instead of a fifty per cent spilt, they only pay artists the 10 to 15 per cent royalty. Plus they take standard deductions from this amount including packaging deductions of up to 35 per cent, even though iTunes does not sell packaging with downloads."

The labels are treating digital downloads as if they're physical CDs! Big surprise. :D I know, these artists sign their souls away by their own power, but what these companies are doing simply doesn't seem legal. Oh, and from the article, Microsoft's Zune Marketplace is even crueler to the artists than I thought possible.

Link: http://www.theregist...006/11/29/stevegordonzune_royalties/

>

George76 said:

> I also really don't get your comments about how artists should be treated equally and everything charged the same price. Sorry, but some artist's music IS worth more than others. The consumer sets their worth.

EXACTLY! :D You just made my point! The worth of a piece of music is different for everyone. That's why all music should be equal in price. Let the market decide what is worth more BASED ON THE MUSIC, NOT THE PRICE! :D I'm a musician myself. I want people to buy my music BECAUSE THEY LIKE IT, not because it's less expensive to buy than Britney Spears' music. Whoop de doo if a few more people might buy some of my songs if they were ten cents less, that means I'd have to sell more. It's really the principle of the thing. Many independent artists put out better music than those working with a major label, so they shouldn't be delegated to the music bargain bin simply because they don't have a face pretty enough or "connections." Also, you can compare cars to art, but generally, you won't get anywhere.

Now, with all that said, I can see a few caveats.

First, I want to say my beliefs pretty much exclusively apply to online digital music distributors like iTunes, Amazon, eMusic, the new Rhapsody, etc. If artists, independent or otherwise, decide to release their music on their own websites, they should obviously be allowed to charge whatever they like, including nothing, kind of like what Radiohead did with their In Rainbows album; if you're not aware, they let each fan choose what they wanted to pay for the album. Second, if the music is...ultra-rare - like a recording of some undiscovered tribe - I could see charging a little more for that on iTunes, if each song was like thirty minutes long. Finally, temporary promotions/deals like Amazon's once a week album sales or on iTunes, large albums costing less as a whole than buying each track individually, seem fair as long as they're motivated by either the distributor (iTunes, Amazon, etc.) or the artist, but not the label unless the artist has a deal with them that agrees to a few "digital promotions" or whatever they call them.

And now I'll shut up. I look forward to your thoughts, if I haven't worn out the discussion. :D

[natmusak]

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