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September 20, 2005 8:43 AM PDT
Jobs: Record labels 'getting greedy'
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The music industry is considering higher prices for downloads, and that would be a big mistake, says Apple's chief.
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This means you are paying more money for an inferior product that is compressed with no liner notes, photos or lyrics. Also don't forget to figure in the cost of your CD that you might use to burn your download. That's an additional $0.15 to $0.20 you have to add, and don't forget about ink and paper if you plan on making a booklet. Oh and then the cost of a jewel case to put the booklet in. Even more overpriced now.
Also, if you read the user community Real provided Rhapsody support board, you'll read horror story after horror story of people's purchases not downloading properly and the user having to waste one of three restore credits. Once all three are used up, that's it. Backing up the license is also problematic if you re-format and move to an entirely different computer and try to restore the license for your downloads.
The perfect price point would be $0.25 per track the way the system is now. Maybe upt to $0.49 but no higher. Unless the prices actually drop, I'll never purchase music online.
They were all busted for price gouging before. I guess they didn't learn their lesson.
Keep being greedy, keep having your product stolen. I don't personally use P2P, but I understand why people do.
I myself buy a CD, rip it, put it on my Zen Micro and put the CD away. That way my CDs only get played once and there isn't any DRM on my tracks. I can do whatever I want with them after that.
The industry needs to go back and take economics 101. They seem to have the crazy idea that since the distribution of music has moved to a non-physical product with "higher perceived usage value" (whatever that's supposed to mean) that they should charge a higher price for the product, nevermind that it's an inferior product. In most industries, as technology makes it cheaper to manufacture and deliver a product the price to the consumer goes down... this encourages more users to adopt the product and purchase more. (For an example, look at the prices of DVD players and DVD movies.)
If the labels raise prices, everybody loses. Consumers pay more. Sales go down as piracy increases. Apple sells far fewer iPods.
But there's even a better way than maintaining the $0.99 price level. There's been some duscussion (by Leo Laporte of TWIT among others) of a study that concluded that the best price level is $0.05 per song. Some would initially laugh at such an idea, but it makes sense for everybody. Consumers can buy any amount of music for very little. The labels would end up making more because sales would skyrocket (without any increase in production costs) and piracy would pretty much go away. And Apple would sell boatloads more iPods, especially the 60GB versions.
Maybe $0.05 per song as not realistic, but what do you think would be the right price to make piracy almost nonexistent and for everybody to win big?
They've alread won the new-release battle vs. Apple: Jobs wanted $9.99 album prices, but the labels refused to make that a standard, and now many albums are as expensive as a sale-priced CD version! If the RIAA had agreed to hold to 9.99, online sales would be even higher now.
Yeah, trust the labels to make music cheaper for us - that'll work...