Instead, the majority of songs will drop to 69 cents beginning in
April, while the biggest hits and newest songs will go for $1.29.
Others that are moderately popular will remain at 99 cents.
DRM will change too, here is much more information. This is first a way to raise prices, yet without the consumer seeing nothing in return. But it’s also a sign of the maturing of the market. The most popular songs will be less of a loss leader for the hardware. Relaxation of DRM suggests that Apple fears long-run competition from less regulated sources, including CD burning from friends. Most of all this is a sign that the music business continues to experience economic troubles. You could call it the "do anything to increase revenue now" strategy. For 30 cents a song you can make your entire current collection DRM-free.
By the way, on DRM and related issues, I recommend the new James Boyle book Public Domain. The book is free and on-line here. You can buy it from Amazon here.
This is something Apple have been pushing for and which the music companies have held back while allowing other distributors, notably Amazon, to do for some time and without higher costs. Recording from CDs is not a new threat and is a feature of iTunes.
Apple’s largest fear might actually be the claims of a lack of interoperability and a resulting monopoly that went with its DRM which was initally introduced at the demand of the record labels. Removal of DRM was an Apple proposal to address the issue.
Apple has been fighting, ostensibly, for DRM-free licensing for a while.
http://www.apple.com/hotnews/thoughtsonmusic/
The only thing that keeps iTunes going it the lack of understanding of how BitTorrent works in the general population. I don’t know anyone who uses iTunes to get music when it can be obtained for free elsewhere. The only time I’ve ever seen my son use it is when he gets an iTunes gift certificate from an unaware relative or something.
The same thing goes for “ad blocking” software. It blows my mind that anybody would run a browser without installing some form of ad blocker. I’ve always thought that the easiest way for Microsoft to eliminate Google as a competitor would be to include an ad blocking service in their browser.
Perhaps they couldn’t do it themselves directly without the Justice Department getting involved, but they would certainly make it simple to install and promote it’s use.
@Tyler, do you think that giving a the pdf version, but selling the e-version which comes with automatic updates, and can be transformed into a hardcover, is the business model we will see for books, especially textbooks, in the future? Typically, textbooks are revised so as to lessen the value of their previous editions. Many of these revisions are not worth the money, but are needed to prevent a crash in the new text book market.
@Winslow, your reasoning seems incomplete. The mix between free/paid is unlikely to have an equilibrium point with a dominant strategy. You might want to re-think why people don’t use BiTorrent, and what signals of quality, reputation are available from iTunes. You might also consider the white space you would encounter surfing the net if publishers had to develop a counter to ad blockers. You might wonder about the strategic aspects of this game also, and if and when it called for regulation.
@M. Webster
“the business model we will see for books, especially textbooks, in the future”
I have never understood why college bookstores don’t lease textbooks. With print-on-demand technology now available, college bookstores should just print out the latest, revised versions as customers wait & lease ‘em, no?
@Winslow
“BitTorrent”
Torrentz are a PITA. Connections are slow and uncertain among peers – you often have to connect a couple of time to finish getting an album and it can take 20 mins. Rather than put up with the frustration, most consumers just pay the 99 cents. What will keep Apple in the lead even as the download market changes is its awesome interface, ease of use, and speed. Apple has made it easy to stay legal; this should be a fine example for Cass Sunstein, I’d think.
Apparently Apple is very good at implementing Geek Tax
@streetwalker
Wrt to leasing or renting textbooks, Brandenburger and Nalebuff made this suggestion over 10 years ago in their book, which was not leased, called Co-opetition.
I remain as puzzled as you why digital books are not sold like software.
“What will keep Apple in the lead even as the download market changes is its awesome interface, ease of use, and speed.”
Pretty much. I used to torrent everything, but now I restrict that mostly to things I just want to try out (new music, TV, etc.) When I know I want it, it’s an easy purchase from iTunes, and it’s especially great for singles. Yes, I know certain torrent applications can tease out a single MP3 but searching for that album and waiting for peers, etc is well worth avoiding for 99 cents, in my opinion.
The record companies will die as musicians, who made a living for millennia without recordable music, will realize that giving their recorded music away for free increases demand for other tangible products such as concert tickets and t-shirts. Fat useless record executives will need to find a new line of work, consumers will have more variety at cheaper prices and more musicians will make a living off their talents while fewer make millions.
StreetWalker: It’s not really efficient, in terms of time or cost, for a bookstore to print out a few hundred copies of a multi-hundred-page four-color-printed book “while customers wait” (or even “before each term starts”), even if we bracket the issues of binding the books.
Back on DRM, to amplify what Franklin Harris said, plenty of post-college adults are willing to pay $10 for a previewed album of songs in very high guaranteed quality, which is what the iTunes Plus 256kbit AAC files are.
I, like Greg Sanders and countless others, do buy music – even music that I’ve already downloaded for free, because I want to support the producer, and because then what I have is the highest possible quality available – and I, like others, have no problem at all using P2P software to acquire it illicitly.
(Another advantage of retail is that you can trivially acquire things that are not very popular – amplifying Josh’s comment – and thus very hard or impossible to get from a P2P source easily.
It costs a record label almost nothing to let you buy songs from iTMS, so there’s no reason not to for things that would otherwise be a limited edition of a few hundred CDRs, that would then vanish effectively forever from the legitimate market, and be very hard to acquire even illicitly.)
I have never understood why college bookstores don’t lease textbooks. With print-on-demand technology now available, college bookstores should just print out the latest, revised versions as customers wait & lease ‘em, no?
They do this already — it takes a couple of forms. One is textbooks that are ‘customized’ for a particular university/professor/class. They delete unused chapters from the PDF and maybe add some custom content (sometime even a paper written by the prof for which they pay
kickbacksroyalties. And then print POD (though not while the student waits). The book can’t be resold because it’s a little different every time. Another approach is to include in each copy of the textbook a code to access online tests. The book can’t be resold because the code won’t work again the next semester.What I don’t understand is why universities allow textbook publishers to capture so much of the total tuition. Universities could charge more if they crammed down the text costs — and universities are certainly in a position to do this. If I were a university president, I’d institute a ban on ‘customized’ texts and institute a policy that a prof could assign any text he/she liked but was required to teach the course to accommodate owners of the last TWO editions, not only the most current. Students would love being able to buy cheap used texts (the U could portray itself as battling against outrageous books costs) and the students wouldn’t realize this made it possible for the U to jack tuition by an equivalent amount
Amazon.com has digital downloads for 99cents. The same hot tracks that are on itunes. When I saw that a song I wanted was $1.29, I said I aint paying that much for a song. This will hurt them in the long run as piracy will rise, or in my case I will download from amazon and upload them to my itunes library to store on my ipod. In the middle of an economic crisis this was a stupid move for itunes.
Comments on this entry are closed.