iTunes Downloads Keep Flat Rate
Apple has renewed contracts with the four largest music companies to continue offering songs via iTunes at the same flat rate.
Why is this blog worthy? Because the music companies were trying to end Apple's flat rate pricing scheme and charge more money for their various artists of the moment.
Steve Jobs says the flat rate is essential in weaning end users of illegal downloading or filesharing. He is right and I am mad.
No sooner does a workable business model for delivering online content appear than the ineptitude of the record companies threatens to kill it. It is truly appalling for them to be crying poor over internet piracy while sneaking in the back door to jack up the price of those of us that are doing the right thing.
Only Universal had not pushed for a variable pricing model that would maximise revenue from the more popular artists.
This is a further example of old companies brining their outdated business models into an environment where they won't work. The record companies are seeking to have iTunes look like any given record store: Two dollar recordings of dead artists like Louis Armstrong at the door and forty dollar 'special edition' new release albums by the counter.
At the moment, legal downloads constitute about 5 per cent of industry revenue. If you want to grow that you do not go about it by price gouging. You drop the price of portable media players and you offer added value content for free via iTunes and other sites (acoustic versions of chart topping songs, video of the artist in the studio, etc). Growing the business means making end users aware of the value of using your services to access your artists.
And as for Steve Jobs: well aren't you an interesting fellow? Here is someone using their monopoly powers for good. Now if we can just do something about the price of iPod accessories then maybe I won't be tempted to boo you off the stage whenever you show up with your jeans and headset. (Yes, we get it. You wear jeans. You are very casual.)
This is a concerning development. How long do these contracts last? Will Apple be able to brow beat them down next time? Hopefully, because otherwise I am going to run up my jolly roger and set sail for the nearest P2P safe haven.
Why is this blog worthy? Because the music companies were trying to end Apple's flat rate pricing scheme and charge more money for their various artists of the moment.
Steve Jobs says the flat rate is essential in weaning end users of illegal downloading or filesharing. He is right and I am mad.
No sooner does a workable business model for delivering online content appear than the ineptitude of the record companies threatens to kill it. It is truly appalling for them to be crying poor over internet piracy while sneaking in the back door to jack up the price of those of us that are doing the right thing.
Only Universal had not pushed for a variable pricing model that would maximise revenue from the more popular artists.
This is a further example of old companies brining their outdated business models into an environment where they won't work. The record companies are seeking to have iTunes look like any given record store: Two dollar recordings of dead artists like Louis Armstrong at the door and forty dollar 'special edition' new release albums by the counter.
At the moment, legal downloads constitute about 5 per cent of industry revenue. If you want to grow that you do not go about it by price gouging. You drop the price of portable media players and you offer added value content for free via iTunes and other sites (acoustic versions of chart topping songs, video of the artist in the studio, etc). Growing the business means making end users aware of the value of using your services to access your artists.
And as for Steve Jobs: well aren't you an interesting fellow? Here is someone using their monopoly powers for good. Now if we can just do something about the price of iPod accessories then maybe I won't be tempted to boo you off the stage whenever you show up with your jeans and headset. (Yes, we get it. You wear jeans. You are very casual.)
This is a concerning development. How long do these contracts last? Will Apple be able to brow beat them down next time? Hopefully, because otherwise I am going to run up my jolly roger and set sail for the nearest P2P safe haven.
posted by Gordon White at 6:48 am
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