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21 Sep 2005
Apple chief executive Steve Jobs has attacked the demands of large music companies seeking to increase the cost of tracks sold through the iTunes download service.
Speaking in Paris prior to Apple Expo Jobs said that he would resist demands from some of the world's leading music companies to raise prices because he believes that the move will increase piracy.
His comments come amid suggestions that some US labels are seeking a bigger share of the revenue from downloads on iTunes.
Apple's service currently has 82 per cent of the US market and charges 99 cents per download. UK users pay 79p (equating to $1.43) and the rest of Europe €1 (equating to $1.22).
Many music labels are said to be keen to use variable pricing on downloads as they do when selling through other channels. This would mean charging more for current music and less for back catalogue.
One label is said to have increased its wholesale prices but that iTunes has absorbed the cost rather than increased prices.
Steve Brazier, chief executive at analyst firm Canalys, said: "Apple is absolutely right. The industry has been revived and renewed by iTunes and it is far too early to think of price increases.
"I do not think that consumers will have much sympathy after the industry profited so much from the price of CDs in this country.
"Despite having a huge US share iTunes is in no way a monopoly. This is really about who has the power to control pricing. If a label drops off iTunes who does it really hurt?
"There is clearly waste and inefficiency in the industry and it is doing all it can to avoid doing something about it."
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Do you agree?
How about playing nice?
Benefits to pirated music: 1. Faster availability (usually before the CD is released), 2. Lower Price, 3. Compatible with any format, 4. Often comes with complete album art. 5. Available in sample rates >128k. 6. More likely to listen to new bands when there's less risk. 7. If it accidentally gets deleted, you can download it again. 8. Better selection (especially w/imports). Benefits to purchasing music: 1. Legal.
Posted by: Mr Robert 02 May 2006
respect to jobs
Nice move..
Posted by: http://global44.com/ 29 Sep 2005
Pot and Kettle!
If the prices that itunes charges in the UK and to a lesser extent in the euro zone are anything to go by it is jobs who is profiteering.uk prices should be arou 69p and euro ones 82c to get some pric parity
Posted by: J Roberts 23 Sep 2005
Way to go Jobs.
I agree with jobs. It seems that the record companys would like to encorage people to download music illegaly again.
Posted by: Greg Rice 22 Sep 2005
people still pay?
I was unaware that people were actually paying for music enough to warrant a price hike.
Posted by: bob 22 Sep 2005
Steve you should be asking for cuts
My God. It already costs me $10,000 to file my Ipod. I'm already thinking about finding alternative sourses. And it would be really great if somebody could compile say 500 songs of a certain genre and sell it for say $75.
Posted by: Garry Keister 22 Sep 2005
Steve, I'm impressed.
Good for Steve Jobs! I'm very impressed. He's speaking the truth. The record companies are notorious for their misuse of the market. Good for Jobs speaking the truth and challenging the record industrys.
Posted by: Jeremy 22 Sep 2005
Re: what Jeremy said 22 Sep 2005
Ditto. Bravo for Steve.
Posted by: Allen 22 Sep 2005
Too early for price increase
Steve made a business decision to publically criticize record labels to acquire support from the public. Steve sees that the market share of ITunes needs to grow to full potential. A variable pricing scheme would deter potential clients. The record labels do not care which online music company sells their albums. The record industry is a competitive market with costs as high as during the CD days, but profit margins much lower through online sales. Being one of the first labels to increase profits means being one of the first to have sufficient money to reinvest in future contracts.
Posted by: Razvan 22 Sep 2005
Free Market My Ass
99 cents a download is already twice what the price should be It still costs an end consumer $12-$20 dollars to purchase a CD with ~10-20 songs on it, which includes the cost of materials, packaging, shipping, cover art and retail profit. And yet at the same time, it costs 99 cents a song to download just the music in a lossy compression format without any packaging, shipping or retail rent to worry about on the supply side. Once again, the record industry is attempting to engage in a price-fixing scheme.
Posted by: Rabid_Schnauzer 22 Sep 2005