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Online music prices on the rise

Written by Jari Ketola @ 07 Apr 2004 14:44 User comments (12)

Online music prices on the rise While Apple iTunes, Roxio's Napster and other online music stores are still offering a lot of single track downloads at 99 cents a piece, and full albums at $9.99, the prices on new releases have already went above the prices of new CDs.
For instance N.E.R.D.'s new album Fly or Die costs $16.99 at iTunes, and $13.99 at Napster. For comparison you can purchase the album on CD for $13.49 at Amazon.com.

The driving force behind the changes to the price structure are the five major record labels that provide the licenses to online music stores. The single track download prices on hot new releases might be boosted to anywhere from $1.25 to $2.49 per song. Some labels are very eager to lift prices, while the others realize that at the current stage raising prices would make little difference in revenues, but would definitely drive customers away rather than lure them in to explore new technologies.

One has to hope that the record industry has the patience to let the industry grow, and maybe even try and find ways to offer discounts and great deals to loyal customers. It doesn't take an analyst to predict that a 150 per cent increase to prices would deal a huge blow on the sales. And it doesn't take a legal expert to see the blame eventually being cast on peer-to-peer networks and Internet music piracy.

Source: NJ.com

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12 user comments

17.4.2004 15:35

$0.99 per song is already pushing it. do they expect people to pay more to download the songs than it is to buy the cd?

27.4.2004 15:50

And the artists will get an increase in profit too? Yeah right. Lossless codec and no DRM I might pay 50 cents.

37.4.2004 16:24
nonent1ty
Inactive

I love the "all MP3s are evile" attitude of the record companies. You'd think that they'd realise that this will just drive people to go for illegal tracks from P2P rather than buy CDs (not that I understand their preference for people buying CDs rather than MP3s anyway).

47.4.2004 16:43
Golem1
Inactive

At 99 cents per song, the music industry is already making more money from selling them through downloading because their costs are much much lower than producing and marketing a CD. I think musicians should form their own production and marketing cooperative and cut out the record production and marketing companies. The co-op would be able to produce and sell individual songs and albums for less and more money would go directly to the recording artists. One of the P2P sofware companies could be the means of distribution and collect money for direct payment into the bank accounts of the recording artists. The P2P company would take a small percentage of each transaction or could be paid through advertisers. I could accept a brief, eraseable audio commercial with each download if it meant the end of the big greedy media companies, a reasonable cost for music, and a gauranteed payment of most of the payment to the recording artists. What about it?

57.4.2004 21:28
aXidburn
Inactive

thats just fucking stupid, they are already pushing it by selling music, now they wanna raise the price? didnt they do a study that p2p music downloading didnt even effect their profit, as they compared it to years before?

67.4.2004 21:43

Obviously they didn't learn anything in business school. Let's see, we want to beat free music so we're going to charge way too much for a lossy format, DRM the hell out of it and then jack up the price even more. Wow! I'm a constuction electrician, never been to business school and even I could come up with something better than that. I'm actually glad to see this for the simple reason that it's going to hasten their demise. More and more people are getting tired of their ridiculousness.




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78.4.2004 6:50

It is my sincere hope that at some point the music industry will realize that MP3 shareing actualy stimulates the purchace of CD's and that it would behoove them to openly distribute high quailty MP3s like Amason does now. I know I buy more CDs as a result of haivng downloaded the songs first, however, I don't listen to any that pop artist of the month crap that "the man" dresses up and puts on MTV.

88.4.2004 8:53

I'm sure the Music industry will say that the reason they are raising prices is they are losing money and of course they will blame the P2P for that. I'm sure they real reason is that people aren't buying the crap tracks they usually get when they purchase the entire CD so the profits are down in comparison to years ago when people had no choice. Now we have choice and they don't like it so they will raise prices so people (so they think) will buy the whole CD to get cheaper music (slight of hand tactic) and they are thinking this will keep the marketing chain intact, because I'm sure they are bitching about the drop in sales.

98.4.2004 12:02

So, the label's cost to manufacture and distribute music has dropped to zero. Artist's & songwriter's royalties are still a tiny fraction of what the labels get per cut. The files are DRM restricted and lossy compressed. And they think we should pay MORE for this? I have nothing further to say.

108.4.2004 12:14

Exactly, at best single track MP3's should be considers fragmented second rate demos.

1115.4.2004 6:37

THe problem is they want to sell the CD's so they raise the prices of the electronic versions. THey are trying to keep the old business model alive still. There is probably several contributing factors, one being the distribution channel is crying foul now so this is the solution, raise the prices of the on-line materials. The second is that the Artists are re-nogotiating their contracts to get a bigger piece of the pie since the costs for getting the music out to the masses has dropped considerably as GreyArea indicated in his post. They (the RIAA and the big 5) need to stop trying to keep the old businsess model alive and move on already!

121.6.2004 18:35

Sounds like on-line music stores are trying to get people to go back to P2P file sharing.

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