CR83
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Music labels seek higher download prices
What does everyone think? What about sites like soulseek and kazaa?
URL: http://www.msnbc.msn.com/id/7048053/
Music labels seek higher download prices
Success of Apple has some in industry worried
Some leading music labels are in talks with online retailers to raise wholesale prices for digital music downloads, in an attempt to capitalize on
burgeoning demand for legal online music.
The moves, which suggest that the labels want a bigger slice in the fledgling market's spoils, has angered Steve Jobs, the Apple Computer chief
executive who is behind the popular iTunes online music store.
But music executives expressed caution about their ability to push through unilateral price increases. Among the biggest groups, Universal Music and
Sony BMG are known to be particularly reluctant to disrupt the market for downloads. One top label said it would not raise wholesale prices now
because the market was not yet mature enough for a price increase.
The three other music labels which also include EMI and Warner refused to comment.
Analysts, meanwhile, are warning that price rises could exacerbate Internet piracy, which is thought to cost the industry about $2.4 billion a year.
Music industry executives said introductory wholesale prices for digital tracks had been set low to stimulate demand for online music sales but the
success of Apple's music store had prompted concern that they may now be too low. The effort suggests several labels believe demand for online music
is robust enough to withstand higher prices, despite the fact that online sales are estimated to account for about 2 percent of total music sales.
Michael McGuire, analyst at Gartner, said the move could backfire because consumers who buy music over the internet have become accustomed to paying
99 cents or less to download tracks.
Wholesale prices are thought to be about 65 cents. "It seems to me to be singularly bad timing," he said, adding that a price increase now could send
music fans back to underground peer-to-peer services where they could get illegal music tracks for free. The number of illegally downloaded tracks
still far outstrips legal online sales, despite an aggressive industry campaign to sue people who illegally share music.
The efforts to raise prices appear in part to reflect frustration over Apple's wildly successful music strategy. Its online store has sold more than
200 million songs and accounts for about 65 per cent of all legal downloads.
These sales have been instrumental in turning the company's iPod digital music player into the world's hottest consumer product. "Our music is not
something to be given away to sell iPods," said one industry insider.
Many in the music business also expressed concern over Apple's growing clout. This stems from the fact that Apple's music store and player are not
compatible with any others. One fear is that Apple will become too powerful if consumers continue to choose its digital music platform. Apple declined
to comment.
It was not immediately clear by how much the labels hope to raise prices but one executive said rates for mobile phone ringtones are roughly 10-15 per
cent higher than digital downloads.
Others said the labels wanted to introduce variable pricing for downloads so they could charge higher wholesale prices for top hits and other special
tracks.
Copyright The Financial Times Ltd. All rights reserved.
URL: http://www.msnbc.msn.com/id/7048053/
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Discipline
* DRUNKEN MONKEY *
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I don't download music so it doesn't bother me. I have to buy music for 2 reasons, support bands and labels I like, and because I need the whole
package. I like having the booklet and artwork and all that. I don't like downloading.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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Lilith
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if this goes through i think it's going to seriously backfire. one of the reasons people use itunes is that they think of it as almost free, less
than $1 per song, it's legal and great quality. if the price is bumped up people it will encourage more illegal downloading. i use it to download
songs i really like put out by bands i'm not psyched on as a whole. stuff i love i'll buy the whole thing cause i want the art.
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MyOwnWay
Posting Freak
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I dont like the whole concept. Buy the album and support the band. If the album only has one good song, and thats your excuse, you dont really need
that album. I bought a country cd because that track 'I hope you dance' makes me think of my mother. I bought the entire cd for one freaken song that
makes me wanna cry. I did it, so can you...
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ENDERA.x
Posting Freak
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we dont need to worry.
we are the underground!
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crazyfists28
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i still get that anxious feeling when a new album is coming out or is out that i really want....driving to the store to get it, some of my favorite
memories are being a kid having my mom drive me to the mall or whatever and getting that cd u really want...i dont believe in downloading any more
than just getting a snippet off a bands site to hear what they may sound like, so whatever
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BDx13
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the big labels are just bummed cause they don't make as money as they used to. first, they didn't want to offer ANY legal downloads, now, two minutes
into the game, they want to jack prices. sure, legal downloads have definitely caught on, but not to the point where a price increase wouldn't
alienate users.
If I fail math, there goes my chance at a good job and a happy life full of hard work.
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Discipline
* DRUNKEN MONKEY *
Posts: 11900
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I just don't understand downloading music. Nothing beats getting to the store the second it opens on the day one of your favorite bands put out an
album. Plus, not everybody goes in for autographs but there are a few I've wanted and gotten. Somehow getting AF to sign a disc I burned wouldn't
really mean as much as getting a 7" or a cd I bought signed by the band.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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CR83
Moderator
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Maybe it's the comsumer in me but I love buying CD's. I follow releases dates and I want to support things like indy bands, labels and music stores.
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