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MDN wrote: "Who would need the labels then? Why wouldn't artists go directly to Apple?"

The record labels aren't needless, but they aren't necessary either. The record labels do provide a valuable function in marketing and promoting music and ensuring that artists get radio airplay.

Then again traditional radio will probably be better off without the record labels dictating playlists to them.

MDN Magic Word: "cent" as in what I'd like to pay for one downloaded track.

as in nothing speaks louder than the greed of the record companies.

for apple's sake, i hope digital whole share prices go up... no no. hear me out. this theory has been introduced last time they thought about raising prices but what the heck, i'll say it anyways...

if the labels raise the wholesale prices, i think apple would keep the .99c/track model. taking the hit internally. They are the only 'complete solution' and are the only company who has hardware to fall back on. if apple takes the hit and either just breaks even with music or even loses money, they will for sure make up for it in player sales. then when the rest of the market has gone to $#!t they can raise their prices to a more profitable level.

brilliance. sheer brilliance... i just hope apple sees it my way.

"There is also mounting worry in the industry over Apple's growing clout in the digital music market," Morrison reports. "Neither Apple's music store nor its iPod player are compatible with other products and services and labels are concerned Apple will become too powerful if consumers continue to buy into its digital platform. 'There is a real fear that Steve Jobs is the only one out there with any real traction,' says one music industry official."

Hmmmm. Works for me.

Tera Patricks
Mac360

They raise the price to over 99 cents and I go back to file swapping networks

Right now I wont download from any service because of the 128 bitrate. Sorry but 128 just isnt good enough for me. I have checked out all the services (web sites) and agree that the iPod iTMS combo is tops (I love my iPod), I just aint willing to pay for something at 128

PS Great site Tera. If you havent, check out the mac360

The first time I read about the fsking cartel wanting to raise prices, I picked up a couple of free tracks in protest. Off I go again.

My MDN MW is family, as in my family will share music before paying more for digital downloads than CD's.

Ok, so the labels raise the prices...Apple doesn't raise its prices and takes a loss on each download...other companies can't compete and go out of business...Apple increases market dominance...labels raise prices...Apple becomes the only download service because of strong iPod sales...labels raise prices...

"history" as in history always goes in cycles

If the music labels raise wholesale prices for Apple, wouldn't they have to raise them for all the services? If they focus strictly on Apple, I'm sure there'd be some sort of anti-trust issue. The entire pay for download model would be crushed.

Even the two or three PC users who actually pay for their digital music would resort to P2P. The music label execs must be on drugs if they believe they could get away with it. I just wonder where they buy their hallucinogens. It must be some good stuff.

"Why wouldn't artists go directly to Apple?"

Careful MDN! You are getting perilously close to invoking the wrath of Apple Legal's trade secret disclosure police!

<<<"There is also mounting worry in the industry over Apple's growing clout in the digital music market,">>>

The industry's worry/fear is that, what, Apple will keep prices down?

It brings a tear to my eyes how the music industry is looking out for us! They should be worried, they won't be able to bully the download industry unless they are scattered and powerless. They should also be worried because the public is getting use to Apple's pricing.

unfortunately there is this thing called Karma
Apple is using its muscle to beat on some journalist and the music industry is about to rain on Apple's parade. There ain't no way around this one: screw someone = you'll get screwed...I know, I've been there.

Ok, this is ridiculous, do any of you know anything about the creator of think-secret, other than he runs a mac rumor site and is in college.

No, didn't think so, I know that he has made allegations against apple employee's before that were completely biased, untrue, and without fact. Trying to make them out to be horrid people, when in fact they were nothing of the sort.

I feel no sympathy for Nick, and hope he gets what's coming to him. Karma, perfect word choice.

He did it to himself.

Well.. the point of a record label should be to go out, find talented artists, sign them and offer them distribution..

Last I checked, Apple wasn't --despite its hippy roots-- qualified to go out and scout bands and sign them..

So the record labels will live on, though their roles may change.. the important stuff (finding great artists) is what they'll continue to do

"Why wouldn't artists go directly to Apple?"

YEAH!! Apple could start their own record company, call it 'Apple Records'...

Um.

Oh.

Well.

Err, I'd better stop there, before Paul and Yoko's lawyers can buy another Mercedes or two with the fees they'd pull in for THAT one!!!

p.s. Nick Ciarelli, a journalist?! HAW HAW HAW HAW HAW!!!! I drive a car; does that make me a Formula 1 champion???

mike:

Great artists? If the role of the record labels is to find talented artists, they haven't been doing a good job. Hype and flash, yes. Talent remains (as always) not very common.

Magicword said it right. The record companies are so greedy you have no choice if you like music to pay the price for it or steal it. Cds go for $18.99 at Fye, $15.99 at Best By and Circuit City, $14.99 at Target. I was pretty shocked when I went to buy the new Kenny Chesney at Target and I saw the $14.99 price tag. I am going to buy it from iTunes tonight. If they raise the prices to let's say $13.99 I will just burn cds from my friends or steal it when I can get it from my friends. I know its wrong but record companies could realistically raise their prices to $22.99 and the consumer would still pay that for Green Day, 50 cent, and Eminem. I call that stealing from me. If you havent noticed the consumer does not set the climate. Sales have been slumping for years now and the prices have not.

bill .. witty as you may be, (and pessimistic and negative), Apple has sold 300 million tracks on iTMS so far.. if those artists suck so bad they why are people picking them up.

Of course, you're going to say that they aren't talented, just marketable.. yawn...and we're all being brainwashed by the dynamic duo of Christina Aguilera and Eminem.. okay.. next cliché, please?

Dobbie...
you must be smoking something to think that the music execs give a crap about Apples search for moles.

If Apple has to cave and raise the cost per track, I am back on Acquisition the same day they announce it. Heck, occasionally the Dude still has to fire up Acquisition to get a track that iTunes does not have.

The Dude abides.

If Apple licenced FairPlay/AAC for music sales now, they could kill WMA-based music players.

Especially if they found a way of importing encrypted WMA files into iTunes.

Just as Word has become the de-facto wordprocesing file format, Apple could really command the market utterly if they opened up a little. Technology is too fickle to stay in your own enclave.

Much as I love Macs, there are times I really get pissed with Apple for their ruthlessness. When Apple need you, they're your best friend. But once they don't really need you anymore, they just dump you aside without a second thought.
One example is when then first started .mac and said its free for life. But after a year or so, users needed to pay a yearly subscription to keep their account.
Can anyone say "retribution"?

I hope that Apple will start to license Fairplay, otherwise U hope that the record-companies will break the unjust monopoly practices by Apple by not extending their contracts.

Looking at how Apple have started to push people around lately I see why record companies would be worried...

Isnt it illegal to fix prices - how do the labels intend to go about raising prices? Surely, in the USA of all places - the land of the free no less - competition alone should decide such matters? Or has all the war abuse now made its way into mainstream culture too?

"Now, the success of Apple's music store has prompted concern that digital download prices may be too low," Morrison reports."

So let's wreck that success by raising the prices? Politicians must now be running the record cos.

To Ed: "One example is when then first started .mac and said its free for life. But after a year or so, users needed to pay a yearly subscription to keep their account."


.mac was never free for life, iTools was. Apple said iTools was free for life and they kept true to that promise. When they renamed iTools to .mac in July 2002, they also introduced the new subscription model we have today. Apple was completely up front about the whole thing

iTools - Free.
.mac - $99/year

Henry,

War abuse?????? What the hell are you talking about ? Are you a terrorist or something? You must be, you commie!

Record companies just continue to look for ways to put themselves out of business. I'm at the point where I hope they do.
Why they think songs are worth more than 99 cents is beyond me. They have provided nothing physical, no distribution, etc - just a digital file and they want more money?
I am a strong believer that iTunes should be spun off into a kind of record label. Bypass these greedy bastards and let the artists connect directly to the listener.

These guys just don't have a clue do they? Greed seems to be their sole motivation in anything. I don't begrudge a company making money, that's what they are supposed to do. But don't keep shooting yourself in the foot.

Apple should buy EMI Group plc!

$4 billion gets you…

EMI, EMI America/Capitol, Parlophone, Harvest, Virgin, Chrysalis, Charisma, and other minority imprints like EG, Food, Hut, Innocent, [B]plus EMI Music Publishing and the related imprints.

So $4 billion gets you a variety of work from Pink Floyd, The Beatles, Sinatra, Beach Boys, Pet Shop Boys, Rolling Stones, Blondie, Genesis, Peter Gabriel, Bryan Ferry, King Crimson, Blur, The Verve not to mention thousands of other artists. And - whilst they're the smallest major - it does give Apple a proxy seat at the record industry's table.

The fact that it also gives them a stick with which to beat The Beatles is merely a happy coincidence.

I agree with MDN's take. As long as Apple gets the same pricing as everyone else any increase in prices will kill all competition and only leave Apple standing if they keep the same 99 cent price anyway. (at least for downloads, subscriptions might be different).

If Apple raises the prices I think you are gonna see a LOT of people who will rebel by stopping buying and starting stealing or going to Allofmp3.com again. I might myself (or at least stop buying to show them it is screwed up). If the record labels raise prices enough and thus force Apple to raise prices too they are gonna kill the goose that lays the golden eggs.

I would have thought that there will be some anti-competitive problems is the labels raise prices for no apparent reason.

If they are worried about the strength of Apple's position in the market, making moves against them may be illegal. The record labels already act as cartels - this could make them open to investgation if they try to oust Apple.

"...rates paid for mobile phone ringtones are roughly 10-15 per cent higher than digital downloads."

Which is why I don't download ringtones. Wow, talk about gouging your customers, and that's only for a portion of a piece of music. Besides, other than musical notes being involved, what has downloading ringtones got to do with music download services like the iTunes or their competitors. They aren't really the same thing.

"The music label execs must be on drugs....."

That would explain a lot. And, I'm not referring to the artists.

"If the record labels raise prices enough and thus force Apple to raise prices too they are gonna kill the goose that lays the golden eggs."

Finally...someone else who gets the music industry's attitude about price increases. Since legal music downloads account for only a single digit percentage of total music sales, it would be more like killing the gosling before it had a chance to grow into the goose. Or better yet, making an omelet of the egg that will hatch the gosling that will become the goose that lays the golden eggs.

Shortsightedness rules, I guess.

BTW, who comes up with the "MDN magic word" for each article? They seem to be hysterically appropriate.

The record labels have no justification for raising wholesale prices because they are doing very little as it is NOW to deserve the 65-70 cents per song.

Apple's doing all the work here, guys. It should be angry....

... unless king_alvarez's POV is actually the scenario which plays out in the end.

That the record labels don't get it. They didn't get it for the longest time regarding downloads (their intial services were so donkey it was as if someone sat down to intentionally make them as consumer-repellant as possible). Now that someone has finally shown them a simple model works, they are afraid. They're also trying to cash in way too early. Damn - at least let downloads account for 5-10% of sales before you start jacking up the prices, the fools. People are still way too willing to go back to P2P. Instead of raising prices on existing tracks, they should start thinking how to add value to their media, such as offering 190 kbps or better versions for more. Give people more reasons to use downloads - not less. What a bunch of muppets.

"Neither Apple's music store nor its iPod player are compatible with other products and services". And what services are compatible with Apples iPod. None. So what are they whining about? If Apple is so limited why is it the number one store and music player? If Apple is so closed format why can Windows users use the same software exactly like Mac users and buy and download music? Why can't I go to Microsoft or Napster to buy music as a Mac user? You know why? As a Mac user I can't get there from here.
Because they don't allow Mac users to even visit there stores. So how is it that the industry sees Apples music store and player so incompatible? Try the other guys people!

Just Another Sign sez:

"that someone has finally shown them a simple model works, they are afraid. They're also trying to cash in way too early. Damn - at least let downloads account for 5-10% of sales before you start jacking up the prices, the fools. People are still way too willing to go back to P2P"

And you took the words right out of my keyboard. After Jobs and Apple FINALLY unravel, and make successful, the legal download music market, the record companies jump to boost prices and hurt this still fragile market.

I am very disapppointed at this rush to the cash register.

As far as Apple joing the roster of record companies, remember that the record companies risk vast amounts of money and time discovering and promoting acts, with only a 10% chance of seeing the money come back. For every artist you see on ITMS there are HUNDREDS of acts trying to break into the business. It's not easy looking for the next big thing, so don't sell it short.

That being said, I think that it is a foolish move on the part of the record companies to do this, unless it happens slowly over a longer period of time. They have a right to control the price of their product. But if they move too fast and alienate the consumer, well, they will reap the wind.

david vesey

That time Apple was reportedly considering buying Universal seems to make sense these days

Apple will lisence Fairplay, when they decide it's needed...

They've said this already..

In other words.. don't hold your breath.. Apple would have to have less than a 60 percent marketshare before they got worried about lisencing (in terms of downloads) and their download share is looking better and better.. as more companies back out of the market (napster)

This isn't about price, format, openess, etc. It is about the threat to the big five labels' monopoly on the music business.

The big labels got where they are today because technology of the time made it impractical for indie artists to make and distribute music on their own. Records couldn't be pressed in their basement, they had no contacts to promote their work, and no access to distributors or sellers. All an aspiring artist could do was hope some record exec would "discover" them, give them a contract that amounted to slavery, with potential financial ruin if they weren't among the most lucky superstars.

Along came the internet. The potential for online distribution and promotion threatened the labels, far more than the much ballyhooed internet "pirates". But the internet was an untapped source of easy money as well, and a clever Steve Jobs talked them into participating in the iTunes music store, with as little DRM as he could talk them into (Steve Jobs is not a DRM fan - quite the opposite.)

iTunes was also opened to the indie artists. In fact, it actually "made" the careers of a couple of unknown, but very talented, bands. The store's browsing and search features put unknown indie artists with talent on equal footing with big label superstars that can't sing on key. Result: end of the big five label cartel's monopoly, and free artists profiting from their own work. To artists, Apple is one of the best friends they ever had.

By becoming extremely popular and powerful in the music world, Apple has turned into an extreme threat to the big five labels. This is but their first attempts to deal with that threat.

I wouldn't worry about them much though. The five old sharks are a bit toothless these days. How, for instance, is Sony going to get tough with Steve Jobs when their president is getting all choked up and teary eyed about working with him on video? And what are they going to do if Steve says "Okay, I'll raise the prices on your music, but that doesn't affect my deals with the indies."? Having more indie music sell because it is a better deal was hardly their intention.

MDN is assuming that the music industry will raise prices for ALL vendors, and equally, not just Apple.

Anyway, 99 cents is pretty high for an inferior-sounding AAC/MP3 to begin with. If it were offered in a lossless format, it wouldn't be so bad (assuming the original wasn't recorded with a clipped-out super-loud intent to begin with).

the record labels are only going to raise the price for apple nobody else!