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UMG decides to vent its frustrations in public.

In August, Apple Inc. publicly denounced NBC Universal's request for a "dramatic price increase" in its TV content which it attributed to the company's split from iTunes.

Now Vivendi's Universal Music Group (UMG), which holds a 20 percent interest in NBC Universal, has some harsh words of its own for Apple.

Vivendi Chief Executive Jean-Bernard Levy spoke to reporters at a gathering of French media journalists. "The split between Apple and (music) producers is indecent ... Our contracts give too good a share to Apple," said Levy.

UMG, the world's largest record company, gets approximately 70 cents out of iTunes 99 cent download price, or €0.70 of the €0.99 download price in Europe.

Vivendi's Levy also stated that he would like to see a differentiated pricing system, which would give record companies flexibility to make hot releases have a higher premium in costs, with older classic content being available at lower prices.

Vivendi currently has a month-to-month contract with iTunes, after it declined to renew its former year-long contract. Vivendi has not publicly stated whether it will ditch iTunes entirely, but it is in talks with other distributors.

The company has moved a large amount of its music library onto the ad-sponsored free download service, SpiralFrog, however.  SpiralFrog, which just officially launched this month, offers DRM protected tracks at no price, possibly undercutting the sales of iTunes tracks which carry Apple's proprietary DRM format.

Apple has not publicly responded to Vivendi UMG's comments.  UMG's content is currently still available for download at iTunes.



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Love this article.
By gochichi on 9/25/2007 8:43:17 AM , Rating: 4
I love it when a huge company makes a jerk-arse move like this and I get to read about it. They've fully earned the negative publicity. How the heck is .70 for a copy of a massively popular song not enough?

I like that Apple has the dollar-song idea. If a song is really popular, they'll make more money b/c they'll sell it more times. If a song is obscure, I can still afford it because it's a flat rate.

Thugging Apple around is not a good move at all here. I have no interest for new music, but iTunes has is down just right... it's so simple and easy to blow a little bit of cash and compliment and fill in the gaps in your music collection with them. It's entirely too expensive as it is, but at least it's super simple. Vivendi needs to go fry monkeys.

It's magic 70 cents (many many times over)... you give me nothing, I give you 70 cents... who other than corporate brats would complain about this?

It would be damn cool for Apple to start producing some of its own records... 50 cents to Apple, 50 cents to the artists. Just cut the money grubbing middle man right out of the equation. It's not like there's not room for a different kind of record label... would actually be nice to listen to something new that doesn't blow.




RE: Love this article.
By TomZ on 9/25/2007 9:03:12 AM , Rating: 4
The problem with flat-rate pricing is that it nowhere optimizes revenue and profit. The fact of the matter is that many consumers will pay more for certain songs than others. With flat-rate pricing, not as much money is made from popular songs as there should be since they are underpriced, and not as many downloads of less popular songs are sold because they are overpriced.

Think about other industries. Should books be flat-rate priced? How about cars? Movies? CDs? Businesses in those industries understand the benefits, and consumers have no problems with it either.

Flat-rate pricing is only beneficial for companies like Apple who want to keep their store software simple and not have to deal with complex pricing.


RE: Love this article.
By Proteusza on 9/25/2007 9:06:43 AM , Rating: 3
The problem is that less popular songs wont drop in price.

More popular songs will simply raise in price, creating the tiered system you so badly want.


RE: Love this article.
By TomZ on 9/25/2007 9:37:37 AM , Rating: 2
How do you know that? If less-popular song prices are not reduced, the situation would just be like today - fewer people will purchase them than otherwise would if the price was dropped. Why would a record company do that?

Look, in the end, record companies are going to find the sweet spot on the price-vs-quantity curve where total profits are maximized. iTunes doesn't allow them to optimize pricing in this way, and is thus needlessly restrictive.

Jobs presents himself as a folk hero bravely fighting record company attempts to raise prices. But that is pure PR spin. Jobs is optimizing Apple's profit at the expense of the record companies. The consumer is no more important to him as they are to other companies.


RE: Love this article.
By mdogs444 on 9/25/2007 9:39:15 AM , Rating: 1
They wouldnt need to drop the prices.

The point is that when they release non popular cd's, there is a production and shipping cost with them. Therefore they need to sell to recoup their losses on that product.

In the digital world, they are losing nothing if someone doesnt purchase it because there are no costs associated with producing the single mp3 file that is just being copied.


RE: Love this article.
By TomZ on 9/25/2007 9:43:15 AM , Rating: 2
But the record company makes zero on a non-purchase, right? Therefore, if they lower the price to the point where people will start purchasing it, then they make more money than they would have if they didn't lower the price, right?


RE: Love this article.
By mdogs444 on 9/25/2007 9:47:39 AM , Rating: 3
Whether the song was .99 or .50, would you really pay for it if it was something that you didnt really like that much?

Same goes for...

If it was something you really really wanted, are you going to seriously complain that you have to pay $2 instead of $1.

After all, its only music for god sake...a form of entertainment. Its not like were in a depression and they are doubling the price of a gallon of milk.


RE: Love this article.
By TomZ on 9/25/2007 10:01:53 AM , Rating: 2
There is no doubt in my mind that standard price-vs-quantity applies to music downloads, like it does to nearly everything else sold in our economy. More people will buy a song if it were priced at $0.50 compared to $1.00 compared to $2.00.


RE: Love this article.
By mdogs444 on 9/25/2007 10:05:28 AM , Rating: 2
In some cases yes - but when you go into a best buy, do you browse through the budget CD items in hopes that you may find what you want? I dont because chances are there is nothing.

I guess to me its a glass half full/half empty deal.

I would rather use the old method of $.99/song because most things i would download would be on the more expensive side.


RE: Love this article.
By acer905 on 9/25/2007 10:28:50 AM , Rating: 2
The bargain bin is the only place i look. But then thats usually the bargain movie bin, unless i am getting a cd for someone else. But the point is, i won't buy some things when they are new because i feel that they aren't worth the "new" item price, however once they get marked down i would get it because the price fits the value i feel it has. Thus, the bargain bin is the place to shop.


RE: Love this article.
By mdogs444 on 9/25/2007 10:34:22 AM , Rating: 1
I can appreciate a person who values looking for bargains before paying full retail.

However, not everyone is like that - me for example. I pay $200 - $350 for a single pair of designer jeans because those are what i like, and what i feel i want to spend money on. So when comparing an $8 cd to a $13 cd just doesnt make a difference to me.


RE: Love this article.
By TomZ on 9/25/2007 10:42:47 AM , Rating: 1
quote:
I pay $200 - $350 for a single pair of designer jeans because those are what i like

Please tell us you are kidding about that... :o)


RE: Love this article.
By mdogs444 on 9/25/2007 10:48:04 AM , Rating: 1
Nope. Love my True Religions, Diesels, Rock & Republics, William Rast.

Sorry, Im a fashion freak i guess.


RE: Love this article.
By Vanilla Thunder on 9/25/2007 11:11:40 AM , Rating: 4
quote:
Nope. Love my True Religions, Diesels, Rock & Republics, William Rast.

Sorry, Im a fashion freak i guess.


Is it because these ridiculously priced jeans successfully accentuate your thunder?

Vanilla


RE: Love this article.
By acer905 on 9/25/2007 10:45:54 AM , Rating: 2
... not to sound mean but... What the hell? Now that i got that exclamation out, i can actually speak rationally. I honestly can't understand how someone can actually allow themselves to spend that much on pants... May i ask what is special about them? (i don't know if i've ever seen any so this is pure curiousity) Is it a special fabric? color? or what?

But back to your point, if you are the type who is spending that much on pants then i will agree that the difference in cost between different cd's obviously isn't a big deal.

Oh, can i ask what type of car you drive? again just curious.


RE: Love this article.
By mdogs444 on 9/25/2007 10:49:58 AM , Rating: 2
I drive an 02 Audi A4 for winter and a bmw 328i coupe in summer.

I 27, dont come from alot of money, but did well in college and worked my way into a directors role in IT for a large non profit hospital system.


RE: Love this article.
By acer905 on 9/25/2007 11:04:22 AM , Rating: 2
Okay, well you can spend your money however ya want, but if i had the ability to spend that much on pants i'd be wearin em in the cadillac xlr i'd be driving


RE: Love this article.
By mdogs444 on 9/25/2007 11:09:06 AM , Rating: 4
I dont like american cars - bad experiences with them. besides, spending $300 here and there isnt like spending $80k on a car.

But heres what i find funny....people here scrutinize me for spending $300 on jeans that i wear once or twice a week for how long.....but its okay for you to spend $300, $400, $500 on a computer video card, overpay by purchasing a $600 PS3, etc.

None of these items, including my overprice clothing, are necessities in life, but material things that we enjoy. SO im not sure where people get off on accusing me of being a worse person because i spend money on things i dont necessarily NEED...when you do the same.


RE: Love this article.
By acer905 on 9/25/2007 11:19:03 AM , Rating: 2
I just think you are insane for spending that much on pants, because its... pants. I think its because i can buy a pair of pants that is comfortable, and lasts me years for under $20. So paying $300 to me seems insane. My point to the cadillac thing was that in order for me to be able to allow myself to spend that much on pants i'd have to be rich enough to own that car (and most likely have paid cash for it) But as i said, its just me.

(oh, and the latest game system i have (besides my computer which i actually use a lot for work using Autodesk Inventor and thus it needs to be rather powerful) is a gamecube that i got for christmas.)

You're not a bad person. You're just insane lol.


RE: Love this article.
By omnicronx on 9/25/2007 2:50:21 PM , Rating: 2
hell for that much money i would expect the pants to fit the caddy too =P.. but to defend mdogs here a bit, my GF has to buy designer jeans because they are the only ones that fit her body. Any 50$ jean she buys, she ends up having to pay a bunch of extra money to have them altered anyways.


RE: Love this article.
By Lord 666 on 9/25/2007 12:35:26 PM , Rating: 2
What area within the US?

From this post and your previous posts, there is a certain amount of smugness. While it shows your drive that you worked your way up the ladder, don't let that smugness stop you from becoming CIO.


RE: Love this article.
By mdogs444 on 9/25/2007 1:06:39 PM , Rating: 2
Im originally from Cleveland, OH....but just moved to Columbus, OH from Chicago, IL.

Yes i guess i do have some "smugness" right now. I just find it irritating how people claim that someone is an idiot or whatever for spending their money on something they like when its overpriced compared to competitor items. Especially when those same people here on tech forums do the same thing....spending $400 on a 8800 video card vs $100 on a 8600 video card. Is it a necessity? No. Do you absolutely need it? No. Will the cheaper one work good enough? Yes. Do computer people buy expensive parts for bragging rights? Absolutely.

So what im saying is that my situation is the same....its just based around a different type of product.


RE: Love this article.
By Polynikes on 9/25/2007 11:01:17 AM , Rating: 2
quote:
I pay $200 - $350 for a single pair of designer jeans because those are what i like

I pity you. I'm not trying to be mean, but that's just ridiculous. I wonder if your definition of "not coming from a lot of money" is the same as mine.

Also, your argument, if it had any steam in the first place, just lost it all. Clearly you are not anything like the people you're trying to convince.


RE: Love this article.
By mdogs444 on 9/25/2007 11:04:38 AM , Rating: 3
What I prefer to spend my money is doesnt judge the type of person that I am.

I was brought up in normal middle class white suburbia in NE Ohio. A town of about 6,000...a high school of about 1000 total for grades 9-12.

now as far as my argument in the music industry, i just dont think that a tiered group is going to do anything more than what is currently out there now.


RE: Love this article.
By TomZ on 9/25/2007 11:14:36 AM , Rating: 2
quote:
What I prefer to spend my money is doesnt judge the type of person that I am.

Polynikes is right - your spending habits are atypical - most people making purchases are facing limited economic resources and will consider more the value of a purchase. You give off the impression that you will pay whatever price is asked. I realize there are some people like that, but most people aren't. Therefore it is not surprising that you don't agree with price-vs-quantity.


RE: Love this article.
By mdogs444 on 9/25/2007 11:19:17 AM , Rating: 2
quote:
Polynikes is right - your spending habits are atypical - most people making purchases are facing limited economic resources and will consider more the value of a purchase. You give off the impression that you will pay whatever price is asked. I realize there are some people like that, but most people aren't. Therefore it is not surprising that you don't agree with price-vs-quantity.


No, that is completely incorrect. Everyone has hobbies, or interests, in which they pay what the going market rate on things are.

It doesnt mean that I wont buy the clothing that I like if it is on sale...because i would. But its just one of the things that if i like it, ill buy it regardless.

BUt its no different than alot of people on here. They'll pay $60 for the Halo 3 game because thats what the market is. Or pay $300+ for an 8800 series video card, or $600 for a ps3, etc. Its all relevant to what material items out there you want to spend your money on.

Doesnt make you any better or worse of a person.


RE: Love this article.
By AlphaVirus on 9/25/2007 11:22:59 AM , Rating: 3
I have to agree with Polynikes, your agrument is not what the general public thinks.
On a side note I do not see the point in buying "designer pants" that cost $300. But usually the ignorant rich like to buy expensive things to set themselves apart from the people who just cant afford those things. Its more of a status thing. Notice I say rich and not wealthy, know the difference before you flame me.

I think apple should use the tier system just like everything else in the economy, if something has high demand then raise the price. I dont think it would you would be crying the same song if you had to pay $30 for a DVD of today and for a DVD from the 80's. Or how about cars, would you like to pay $50,000 across the board, no because its not proper supply/demand.


RE: Love this article.
By mdogs444 on 9/25/2007 11:27:59 AM , Rating: 2
But the tiered system of much of todays offerings are based on quality - not just demand.

Like the cars example you listed. Each car has different attributes.

What different attributes do each of 10 songs on a single album have - besides the fact that people enjoy listening to one song more than the other.


RE: Love this article.
By acer905 on 9/25/2007 11:36:20 AM , Rating: 2
Length? Ratio of music to lyrics? Range between highest tone and lowest tone? Number of instuments used? Okay, mostly i was gonna go with just the first one, but it didn't seem like i had said enough. But back to length. Should a 2 minute song really cost the same as a 5 minute song?


RE: Love this article.
By mdogs444 on 9/25/2007 1:02:39 PM , Rating: 2
Personally, 2 minutes is hardly considered a song to begin with...

Are you saying you would gladly pay more for a 5 minute song?


RE: Love this article.
By acer905 on 9/25/2007 2:12:22 PM , Rating: 2
Remember, i refuse to buy music in the first place. I was just trying to point out that like movies not all songs are of equal value


RE: Love this article.
By mdogs444 on 9/25/2007 11:31:34 AM , Rating: 2
Also, make sure you realize that when it comes to digital age - there is no such thing as supply and demand.

The demand for a music song is based solely on opinions & preferences. The supply of a digital piece of music is infinite...so the supply and demand laws cease to exist.

If there is nothing to limit your supply, then you cannot base the price on demand.


RE: Love this article.
By acer905 on 9/25/2007 11:39:50 AM , Rating: 2
This is actually a tricky subject. One could argue that the demand would be the same regardless, and that you could still maintain a demand driven price where more popular songs cost more. The only difference being that the songs would then earn more, possibly pushing artists to make more hits.


RE: Love this article.
By TomZ on 9/25/2007 11:43:37 AM , Rating: 2
quote:
Also, make sure you realize that when it comes to digital age - there is no such thing as supply and demand.

All you are managing to prove on this thread (besides your clothing preferences) is that you have zero understanding of economics. I don't mean to be insulting, but you don't know what you're talking about.

Of course supply and demand still exist. Supply exists in terms of how many bands/songs/albums get produced (and how many CDs get pressed). Demand exists because people want it and will be willing to pay a certain price for it. And the normal supply-demand interactions work, too. More demand for a particular band indicates more potential profit and thus companies invest in producing more music from that band, for example.


RE: Love this article.
By mdogs444 on 9/25/2007 12:59:59 PM , Rating: 2
I see your point when saying the supply is an album or band, but when supply is a specific song, then its different.

What im saying is that the supply of one song is no greater than the supply of another song. The demand is just like anything else in which people wnat to buy something. So everyone wants to buy a song - which there will never be shortage of, which it cost not more to make the other songs - therefore it deserves a higher cost?

Its suprising than people on here are agreeing with that - especially how much of you guys complain about things being over priced - ipods, iphone, ps3, etc. Those things may all be overpriced.

But in this case, it would similar to saying that the 360 and PS3 cost the same amount to make - but since most people like the 360 more, it deserves to cost twice as much.


RE: Love this article.
By acer905 on 9/25/2007 2:19:51 PM , Rating: 2
Even with a song, demand should still drive the prices. Its a simple concept, in a free market everything sells for the highest price that people will buy it. Even if they complain about it and still buy it, it won't change. It doesn't really matter if something actually costs more to make or not. If people are constantly buying a product, the company producing it will test them by raising the prices slightly. And if sales drop, it will go back. Otherwise, it will stay at the new price. Things in a free market find the right balance point and sit there. Yes, people will complain all day long about it, but still buy the things they are complaining about. Its just how the market works. When supply is no longer a problem is when the market is able to balance itself the best.


RE: Love this article.
By Spuke on 9/25/2007 3:49:26 PM , Rating: 2
On your pants point, I'm a car guy. There is an "canned" ECU tune that costs $995 and another that costs $600. The $995 is easier to use in that its a portable unit that directly connects to your car and the $600 dollar version requires a laptop (or at least a computer near your garage). In other markets, $995 is too much for a "canned" tune and $600 is the norm. Although I see the ease of use in the $995 version, it's not worth nearly $1000. At first I really wanted that unit but was unwilling to pay that much for it. Now I've learned that it can't be customized and updates will cost extra. $1000 for a canned tune and you STILL have to pay for updates. LOL! No thanks. The $600 version allows you to update and customize your own cars tune. MUCH better value even if you don't own a laptop.


RE: Love this article.
By jtesoro on 9/26/2007 9:17:40 AM , Rating: 2
Let's lay off mdogs here. After all, I'm sure a lot of people on this forum have bought 8800GTXs (maybe in SLI) near release date even though it will make no noticeable difference in their gameplay experiences until something comes out to tax their systems considerably. Others may typically buy limited edition copies of their games (wow, it's got a tin box!). Outside of IT, people here may have paid hundreds or more for new rims or leather seats for their cars. Like mdogs said, each of us has something different to make us happy. As long as you aren't harming anyone, it doesn't mean you're any better or worse as a person.


RE: Love this article.
By Chernobyl68 on 9/25/2007 5:49:37 PM , Rating: 2
"...$350?"
"Yeah."
"...and they're pants?"
"Yeah."
"...and you wear them?"
"Yep."
"They don't, like, have a TV in them or something?"

paraphrased from "the last boy scout" :)


RE: Love this article.
By Polynikes on 9/25/2007 10:54:56 AM , Rating: 2
$2 for a single song? Get outta town. I love music but I'd NEVER pay that much for a single song, no matter how good.


RE: Love this article.
By Vanilla Thunder on 9/25/2007 10:59:46 AM , Rating: 3
quote:
Jobs presents himself as a folk hero bravely fighting record company attempts to raise prices. But that is pure PR spin. Jobs is optimizing Apple's profit at the expense of the record companies. The consumer is no more important to him as they are to other companies.


Don't you think if all Jobs was out to do was optimize Apple's profit he would have no problem raising the cost of tracks, thus increasing Apple's profit? More of the usual Apple hating from the usual suspect.

I've got a novel idea that can help you all avoid this arguement. Buy CD's. No DRM, you can burn it, loan it, sell it, and load it on any digital media player you want. And you know what? Apple won't see a red cent of it.

Instead of wasting all this energy bitching about Jobs and Apple, you should turn your eyes where the true evil is. ANY MAJOR RECORD COMPANY. These people care less about music than anything. They, as most corporations, care about one thing....the bottom line. And that's why they are trying to move away from iTunes, to increase their bottom line. Not to help the artist, not to do you a favor, but to dig deeper into your pockets and pump out more contrived bullshit to flood the airwaves.

Vanilla


RE: Love this article.
By acer905 on 9/25/2007 11:10:40 AM , Rating: 2
Steve Jobs is the CEO of a major corporation. His job is to optimize profits. The same goes for the CEO of any major corporation. A free market is a delicate balance of pricing. It will always be as high as people are willing to pay. Right now if Apple were to raise prices, then most likely they would sell less. This is not Apple hating, its simple economics. Why would a CEO not want his company to have the best profits it can? Aside from the cult like following (that statement is probably gonna get some flak) that Apple has it is no different than any other large company. It wants you to buy from them so they get more money. It will do anything to make the most money it can, and to lower the cost of production.


RE: Love this article.
By Vanilla Thunder on 9/25/2007 11:21:06 AM , Rating: 2
Thank you for missing my point completely.

Vanilla


RE: Love this article.
By TomZ on 9/25/2007 11:20:31 AM , Rating: 2
acer905 is right - it Jobs' job to optimize profit. If he is holding down iTunes pricing at the expense of more profit for Apple, then shareholders should take him to task for that. But I doubt that is the case. Instead, I think you've bought into Apple's PR spin / reality distortion field.

I also find it incredible that you separate "evil" major record companies and yet see Apple as not in the same "evil" category of trying to optimize profits. That's pretty naive.

For the record, I do purchase CDs, and I try to purchase them directly from indie record labels so they and the artists get as much of the revenue as possible, instead of middlemen like Apple. I also hate DRM restrictions on music I pay for.


RE: Love this article.
By Vanilla Thunder on 9/25/2007 11:28:37 AM , Rating: 2
quote:
I think you've bought into Apple's PR spin / reality distortion field.


I haven't bought into anything. I don't own a single Apple product. However, I think some people have a little too much to say about Jobs/Apple everytime there is some PR spin done by the Apple haters on this site.

Vanilla


RE: Love this article.
By TomZ on 9/25/2007 12:02:51 PM , Rating: 2
Look, you're missing the point. Apple is all about increasing the quantity of iTunes songs sold. And to do that, they are trying their best to hold prices down. They do this in order to drive sales of their music players. And this is done at the expense of content providers since it deprives content providers of additional revenue they would receive if the songs were priced "at market." This is why you see content providers defecting from Apple.


RE: Love this article.
By Oregonian2 on 9/25/2007 1:57:27 PM , Rating: 2
Exactly, it's in Apple's interest for the price to be as low as possible as to drive that which gets them their profits: iPod sales. And the cheaper it is, the bigger the iPod is needed to hold it such that one needs to go and buy another one...


RE: Love this article.
By TimTheEnchanter25 on 9/25/2007 9:39:48 AM , Rating: 3
There is basically flat rate pricing for cds, so why should it be different for tracks? I've always thought that it's stupid that you pay the same for a cd with 8 songs as one with 17.

As for the part about charging extra for popular tracks; Best Buy sells these cds for a lower price when they first come out, then they raise them the prices up to the same as all the other cds. Why should itunes charge extra if stores don't?


RE: Love this article.
By TomZ on 9/25/2007 10:04:17 AM , Rating: 2
quote:
There is basically flat rate pricing for cds, so why should it be different for tracks?

Huh? CD prices range from $5-20 and beyond - how is that flat rate?

Stores charge less for new releases in order to generate foot traffic in the store with the hopes that you'll buy something else. Same reason grocery stores put certain items on sale for cheap.


RE: Love this article.
By elgoliath on 9/25/2007 5:04:30 PM , Rating: 2
I agree with you, but aren't CD's generally the same price ($18.99 here), with other disc's that aren't close to the same price more of the exception (usually the ones with more than usual number of songs on them- live albums, greatest hits, etc.)? I see both sides of the story here, Job's isn't some folk hero as he wants to be, but I have even less sympathy for universal- Unless I am wrong above, they have been doing this flat rate charge for quite a while now with CD's.

To elaborate on what I am thinking above, usually there is about a dollar difference either way (again, around here where I live). At $19 for a 12 track album, that's about $1.58 per song. A dollar more an album and said song costs $1.66, or for a dollar less an album that would be $1.50. That would be a swing of 16 cents either way. My question for universal would have to be what range are they thinking of using? 15 to 30 cents ($.60 to $1.30) I think most consumers would live with and be perfectly happy with, but if they are wanting to essentially double/triple/quadruple the price (as Apple said- up to $4.99 each, but I think that was just Steve Job's presenting the worse case facts to support his angle) then I will have a serious issue with that.

I don' have an issue with tiered pricing (I PREFER the flat rate pricing) as long as they keep it reasonable, but I have this feeling that that is not where universal is/was going with it.


RE: Love this article.
By TedStriker on 9/25/2007 10:50:46 AM , Rating: 2
In comparing to movies, you pay a flat rate to rent any movie in blockbuster. Transformers will cost the same amount as Blazing Saddles does to rent it. Obviously they could make more money by jacking up the rental cost of the new released blockbusters, but for some reason they don't consider it a good business model.


RE: Love this article.
By TomZ on 9/25/2007 10:57:33 AM , Rating: 2
That's a good point - I wonder why they use flat-rate pricing in that business? Anybody know?


RE: Love this article.
By michael2k on 9/25/2007 12:40:44 PM , Rating: 2
Probably because people are price sensitive and there are multiple movies to choose from. Instead of seeing $6 from a new rental the renter will spend $4 on a 2 month old movie they haven't seen.

In other words, they save $2 by waiting. In that way there is no market for more expensive rentals. Especially when you consider that a DVD comes out months after the movie anyway. If a person was willing to wait 4 months to rent, what is another 2 months if it makes the rental cheaper?


RE: Love this article.
By theapparition on 9/25/2007 3:59:06 PM , Rating: 1
Because Blazing Saddles could be watched over and over, where as the normal person could only stand to watch Transformers once.

Sorry, couldn't resist. :-)


RE: Love this article.
By acer905 on 9/25/2007 9:34:03 AM , Rating: 2
quote:
It would be damn cool for Apple to start producing some of its own records... 50 cents to Apple, 50 cents to the artists. Just cut the money grubbing middle man right out of the equation


That is actually a really good idea. Apple already has a mass system of distribution, they have a mass following, and most likely more than enough capital to easily get started. And if they didn't jack up the amount they kept too much, keeping it at or below 50% of the pricing, then more and more artists would wanna jump on to them, because the artists would get more money.

And to promote they could have some random Apple vs (insert big record label here) commercials that would most likely make many people laugh and be wildly popular.

I may hate apple, but i do admit they seem to have a good loyal following, and they make some amusing commercials.


RE: Love this article.
By mm2587 on 9/25/2007 10:39:12 AM , Rating: 2
I'm not sure apple could enter the music industry even if it wanted to, at least not at an extreme cost. Isn't part of apples agreement with apple records(or whatever the name of the Beatles label is) that apple computer can not enter into the music production industry?


RE: Love this article.
By acer905 on 9/25/2007 10:49:06 AM , Rating: 2
Oh, thats right. I had forgotten about that... Well then scrap that idea. Unless they can get themselves a ton of lawyers to find some loophole.


RE: Love this article.
By on 9/25/2007 11:10:59 AM , Rating: 2
quote:
Isn't part of apples agreement with apple records that apple computer can not enter into the music production industry?

Actually the Apple vs. Apple suit was settled just a few months ago, this year. It mainly had to do with corporate trademarks. As of February of 2007, Apple Computer officially owns the Apple corporate trademark, and sublicenses it out to Apple Records. Alas, still no Beatles songs on iTunes.


RE: Love this article.
By Icelight on 9/27/2007 12:05:48 PM , Rating: 2
quote:
And to promote they could have some random Apple vs (insert big record label here) commercials that would most likely make many people laugh and be wildly popular.


*Man dresses in an expensive suit on screen*
"Hi, I'm an iTunes artist"
*Disheveled man sitting in a cardboard box on screen*
"And I'm an artist under a big recording label"

"Hey, what's wrong recording industry guy?"
"Oh, it rained last night and my home got soaked"
"That's too bad. If you'd like you could stay in my guest house for a while"
"Your guest house?"
"Sure, I mean, it's a little small, and you'd have to split the five bathrooms with 2 other recording industry artists, but it's got to be better than living in a soggy refrigerator box...Tell you what, I'll even let you sell your music on my property and let you have some of the proceeds!"
"A-all right...can I take my box?"

*cue music*


RE: Love this article.
By TomZ on 9/25/2007 9:41:23 AM , Rating: 2
quote:
It would be damn cool for Apple to start producing some of its own records... 50 cents to Apple, 50 cents to the artists. Just cut the money grubbing middle man right out of the equation.

How about cutting out that money-grubbing middle man Steve Jobs / Apple out of the equation?

I can see the future - ad-sponsored web sites that provide the same services as Apple, but basically for free. In other words, 100% of the money from your music purchase flows through back to the artist or record company. Individual artists could sell their songs directly, or if they choose, via record companies. What unique value is Apple adding to the picture?


RE: Love this article.
By acer905 on 9/25/2007 10:40:55 AM , Rating: 2
Yes, that is a good idea for the future, but ya gotta make changes slowly. If artists were able to ditch the current record companies right now, and just record through apple, as long as apple didn't increase their piece of the pie by much the artists would get more. And then after a while an ad based distribution site would catch on as well as itunes has, and the artits could ditch apple and just record their stuff themselves and distribute it via the add based site. In the end thats how it should be, but as i said, don't rush things. Go one step at a time


RE: Love this article.
By roastmules on 9/25/2007 11:01:21 AM , Rating: 2
quote:
ad-sponsored web sites that provide the same services as Apple, but basically for free. In other words, 100% of the money from your music purchase


That's a great business model. 100% of free goes to the artist...

I don't see how anyone can get rich off of ad revenue, rather than a dollar per download.
DailyTech has a lot of readers, and ad revenue, but they don't make the kind of money as a pop star, I think most of the writers and staff have a day job.


RE: Love this article.
By TomZ on 9/25/2007 11:05:46 AM , Rating: 2
quote:
I don't see how anyone can get rich off of ad revenue, rather than a dollar per download.

Ever heard of google?

Think about it - the amount of web traffic that Apple gets at its web store - that traffic is worth a lot of money. And even better, it's not "random" users like google, but users who are there to fork out cash for songs. That's pretty focused, and a great opportunity to show ads for products and services that are music-related. On top of that, sites like that are "sticky" in that you tend to visit them often, rather than just once. These are all positive attributes.


RE: Love this article.
By acer905 on 9/25/2007 11:31:21 AM , Rating: 2
lol, gotta love google... Simple online search engine becomes multi-billion dollar corporation.... Who would have thought that would happen...


NBC... something is fishy.
By gochichi on 9/25/2007 10:11:40 AM , Rating: 2
I think this is a bid to hurt iTunes sales one way or another. By making prices high on iTunes, it would lead to people looking for alternatives... where even piracy would be better than to help Apple. (Connection with Microsoft, NBC = MSNBC? , simply to spite Apple, who knows).

If they had agreed to up the price for these folks, Apple's other partners may follow suit and thereby decrease the popularity of iTunes and iPods even further.

It doesn't seem logical or legitimate to want to make less money on iTunes sales. I'm pretty sure that people that shop on iTunes are simply not going to buy their products b/c of the way iTunes shopping works. You search, you preview, you buy. If it's not there to find, you search or browse for something else.

I don't like the sound of this. Apple was out of the game for so long when it comes to PCs... Jobs is using iPods/iTunes etc. to fund Mac OS X and have a come back and it's absolutely the only competitor to Microsoft in terms of quality proprietary software. (Adobe has a good relationship with both, and they are very clearly all about their niche products).

These guys are huge, they can better afford to loose the sales than to see Apple grow stronger.

That's my conspiracy theory after seeing that NBC was throwing a hissy fit earlier about wanting to charge $5.00 for their their shows on iTunes. They were the cause of 30% of Apple's TV show business and they are connected to Microsoft. I don't like the sound of it. It makes no sense, to want to charge $5.00 for a public show that I can record from over-the-air HD, view online for free, not-watch, download illegally. If this was HBO or something, I might believe it, but these are public "free" shows... so why the $5.00 price tag except to make iTunes less popular?

iTunes is in a loose loose situation here. They can either say yes to these outrageous (and confusing) price increases, which would destabilize Apple's relationships to their consumers and the other content providers... or say no and loose this profitable and popular content.

This sounds extremely fishy to me. I think a lot of us can agree that given that there is piracy, and other factors, that their price increases on iTunes would not be a good business move for Vivendi. Also, iTunes users are a unique crowd that have grown accustomed to the practicality of iTunes and they'll straight up loose those sales. I smell something really fishy about this. The kind of thing a monopoly does... hurt themselves temporarily so that they can screw the consumer later on and not deal with competition.

Apple is in the limelight right now, gouging their eyes out like this has to be motivated by a dislike (or fear) of Apple and nothing more.

Not only does it sound like this is about hurting Apple, I think they succeeded.




RE: NBC... something is fishy.
By TomZ on 9/25/2007 10:33:11 AM , Rating: 2
I don't think content providers are out to hurt Apple; instead, they are focused on optimizing their own profitability. What is probably going on is that content providers are starting to reject flat-rate pricing because they realize that, by not being able to offer consumers more flexible, they are not making as much money as they could of the content was offered at "market" prices.

Also, I don't think NBC is going to charge $5/episode for their TV shows. I think they realize practically nobody will pay that much. That's just Apple PR spin.

iTunes is going to have to become more flexible and more amenable to the needs of content providers, because they are quickly realizing that they have alternatives. Apple is not the only game in town.


RE: NBC... something is fishy.
By on 9/25/2007 11:43:14 AM , Rating: 4
quote:
iTunes is going to have to become more flexible and more amenable


Why?
iTunes is like the Wal-Mart of the digital music world. Steve's got the biggest bazaar around, and if you want to play on his playground you gotta follow his pricing rules. Jobs knows that music tracks (and likewise TV shows) are mostly going to be impulse buys. iTunes is designed around consumer habits, and is amazingly simple. You always know a track is $0.99, and videos are $1.99. Simple. Customers like simple.

The "content suppliers" are upset that they missed the digital boat leaving shore, and are obnoxiously loud about their own missed opportunities. They continually rant about how 'unfair' Apple is to them, without regard to the end-customer experience. The hubris is especially bad when one considers that they get 70% of each sale for sitting back and doing nothing, while Apple works hard to supply the infrastructure, bandwidth costs, servers, and credit-card billing. Apple does all the work and gets less than one-third of the revenue.

Its really about loss of control. The studios don't like the fact that they have no idea how to sell in a digital world, and have to rely on a company like Apple.

Selling content is hard work, subject to fickle market demands, and Apple seems to be the only place to do it right. Already we've seen several other digital stores close up shop: Sony Connect, Google Videos, and now Virgin Digital. And those are not small companies. Which makes it even more ridiculous that in the face of all this NBC/Universal is willing to kill the golden goose and go forth setting up their own ill-fated SpiralDeath service.

Greed and control. There's no other explanation for the studio reaction. Instead of relying on Apple's proven expertise, sitting back and collecting money for nothing, instead they are doing everything possible to shoot off their own hands and feet.


RE: NBC... something is fishy.
By TomZ on 9/25/2007 11:52:48 AM , Rating: 2
Why? Because the services that Apple is providing are not unique and there is no substantial barrier to entry for other companies to do the same.

It also amazes me that you go on and on about the "greed and control" of the evil content providers, but then turn a blind eye to the same greed and control exhibited by Apple. Why are the actions of one company acceptable to you, but not the other? That's a double standard.

In the end, if they fail to adapt, iTunes will be marginalized because it is all too easy for other companies (e.g., Amazon) to effectively deliver content, new companies based on new business models (e.g., the "free" provider I theorize), or for content providers to directly sell their content to end users.

The latter is most interesting to me - I mean, why not eliminate the middle-man entirely? I think a lot of business (though not all) will go in this direction.


RE: NBC... something is fishy.
By TomZ on 9/25/2007 7:34:24 PM , Rating: 2
Ironically, today there is a DT article about Amazon starting a service.


f#$k UMG and F%&K itunes
By drunkenmastermind on 9/25/07, Rating: 0
RE: f#$k UMG and F%&K itunes
By mdogs444 on 9/25/2007 8:37:23 AM , Rating: 2
As the old saying goes: "If you are not part of the solution, you are part of the problem."


RE: f#$k UMG and F%&K itunes
By drunkenmastermind on 9/25/2007 8:42:34 AM , Rating: 3
The record companies have been exploiting artist's since the beginning, now you ad in Apple and the artist cut gets even slimmer.


RE: f#$k UMG and F%&K itunes
By michael2k on 9/25/2007 12:32:16 PM , Rating: 2
Why do you blame Apple?

CD Baby, with Apple, gives artists something like 59% of the take.

Apple doesn't decide what the artist gets, it is the contract the artist has with the record label.


Double edged sword
By Proteusza on 9/25/2007 9:04:33 AM , Rating: 3
Really, these record company execs are stupid. Not misguided. No, they lack the common sense, decency, morals and intellectual capacity that most people take for granted.

Look at this guy. He's getting 70% of the profits from an iTunes sale, and he wants more, and he wants to charge more. Then, he' surprised when people pirate the music he gets on to the market (he's probably especially surprised when the music pirated isnt that which his company has selected to promote).

Hello? High prices, lack of trust in record companies, lack of perceived value in our purchases are all driving up piracy. And you want to raise prices further? What brand of idiocy are you on?

Increase your target market, lower your expenses by stopping promoting useless human beings (I wont name any here), drop your expensive and useless DRM (it hasnt stopped piracy has it?). People will gain faith in the record companies once more.

but oh no, apparently the execs know better. lets leave it to them to ruin their own businesses, I wont be sad to see them gone.




Piracy is the last hope.
By gochichi on 9/25/2007 9:09:24 AM , Rating: 2
This idea that piracy increases prices is absolutely marketing hype and blatant lies. Nothing could be further from the truth. If piracy increased prices, then Bluray disks would be $5.00, HD DVDs would be $6.00 and DVDs would be $30.00. VHS tapes would be $50.00 and so on down the line.

The fact is, that piracy (though i really don’t engage in it) prevents price coercion by these monopoly-like conglomerate of ultra-huge media companies. Which is obviously what these unscrupulous companies are most interested in.

Truly, I tell you, they had their chance to prove that piracy drives prices up with HD DVD and Bluray. These should be the same price of DVDs at most, because they are completely secure from piracy still. It’s crystal clear to me that they lied about the effects of piracy on price. It’s very clear to me, that piracy lowers the cost (simple supply and demand, piracy increases supply). In effect piracy is largely due to prices gone crazy. Piracy, is the only leveraging there is...

Don’t believe it? The software industry is catching up to this fact. They offer free 30-day evaluations, student licensing, and so forth. This lowers piracy, and if they marketed their software at prices that were appropriate for other countries, they would lower piracy abroad as well. Lower piracy delivers value to the professionals that purchase the software, because it’s an investment that they can then leverage for their services.

I’m afraid of what the media companies will do when they fully curtail piracy. They mass produce and mass market but they want to charge as if they were selling you some sort of unique copy. Mass production works just fine, it allows us to collectively afford to watch really expensive to create movies and such... but they’re taking what would be a great system for everyone, and being entirely too greedy.

Just think about it? If Bluray players are super expensive to begin with, and piracy doesn’t affect these disks. Why would we need to pay $30.00 for the same copyright when the costs of the disk is negligible?

If piracy increased price, I’d gladly jump from safe format to format.

In essence, the very technology that makes it possible for these thugs to generate revenue from other's talents is the only technology that can keep them in check. It's amazing technology, and by in large they didn't create it, and it's public domain technology that we all funded and discovered together. It's not right for them to squat on it and abuse their legal position the way they do.




Ugh...
By SirLucius on 9/25/2007 10:56:21 AM , Rating: 2
Ugh...that picture of Britney in the headline is what's really indecent.

At this point the record companies are gonna have a hard time trying to get the general public to adopt a flex-rate plan, and an even harder time getting the audio geeks to adopt if they keep offering 128kbps DRM'd music. People are so used to paying $0.99 or less for digital music that I don't see them taking to price increases too kindly, even if only by a few pennies.




Well heres my view...
By mdogs444 on 9/25/07, Rating: -1
RE: Well heres my view...
By cgrecu77 on 9/25/2007 8:53:10 AM , Rating: 2
right ... because before piracy, prices were a lot lower than they are now .... wait, it's actually the other way around ... :)

The music business used to be a consumer-ripping monopoly, and therefore it was illegal. It's an irony of sorts that file-sharing, an illegal practice itself, will prove to be the downfall of the music industry. How many times did you see the price of an album decrease as a result of "competition" in the movie industry? They thought they can screw us anyway they like it - well, they can't do that anymore.

I'm not saying that piracy is a good practice - but I'm not going to cry for the music industry either (nor will I buy their argument that piracy is actually driving music costs higher for the rest of us ... if anything it's the other way around)

Fight all they want, the future is bleak for the old model - I see more and more voices supporting the idea of subscription based music. After all, we do that for books, and it's a lot simpler for music where everything is digital. Good artists will always make their money form concerts and advertising, and the crappy majority will have to bite the dust for once. Hopefully in a few years we'll be able to do that for movies as well - pay 30-40 dollars a month and have access to ANY movie ever published (maybe save for the releases in the last year or so) and ANY song ever played.


RE: Well heres my view...
By TomZ on 9/25/2007 9:05:17 AM , Rating: 2
The problem with the music industry is that, in the long-term, they are needed less and less. Bands are finding they can record and distribute their music directly to end-users, and then use free sites to promote themselves. You see that a lot now with indie bands, and I think that will become more and more common. The value that the record companies used to provide is becoming less and less valuable.


RE: Well heres my view...
By acer905 on 9/25/2007 9:27:36 AM , Rating: 1
quote:
You can make the case that they aren't losing money because you wouldn't have bought it anyway 7 ways to sunday...but the fact is, you stole potential profits


I don't get it... If person A would never, for any reason, purchase a song, no matter how inexpensive it was, they are losing said "potential profits" but nobody complains. Yet if that same person, who would never for any reason purchase a song, goes to a file sharing network and downloads a copy of it, they are stealing potential profits. It just seems to me that no matter what, that person would have never given the company any money. So really they aren't losing anything or gaining anything either way. Would it be different if the person had recorded off the radio as so many people did 20 years ago? (and some people probably still do today)

Simply put, by your statement, anyone who doesn't buy a cd or download is actually stealing from the record company.


RE: Well heres my view...
By mdogs444 on 9/25/2007 9:37:42 AM , Rating: 1
quote:
Simply put, by your statement, anyone who doesn't buy a cd or download is actually stealing from the record company.


No, thats not what I said. Concentrate on the word "POTENTIAL". Potential profits are moneys that the company possibly could have made if the person did not obtain the copy for free. Its called potential profits because you cannot prove that every person who downloaded would have or would not have bought the item.

Same as if someone goes to a department store and steals a shirt. Who is to say that the person would actually buy the shirt if they had the money? Who is to say that they didnt ahve the money and just wanted to steal it becuase it was there already anyway.

The point is that that I dont condone record companies doing whatever they please to the consumer, and I dont agree with the consumer doing something illegal to get back at the record companies. We are not in a depression where you are forced to steal these things to live. These are just material items for entertainment purposes.

I just think we should do things the legal way - If you are not going to pay for it because its too expensive, or some other reason, or you cannot afford it, then just dont buy. No reason to steal it.

What people need to realize is that most people do not pirate movies and music because they dont feel they are worth the price or cannot afford it. They do it because its easily accessible and they can do with good chances of getting away with it.

So lets stop with the cry baby attitude of "we only pirate because its a monopoly" or "because we hate the record companies" or some other lame excuse. Thats a load of bullshit and everyone who says that is full of it - and they know it.


RE: Well heres my view...
By acer905 on 9/25/2007 11:01:15 AM , Rating: 2
I think i see your reasoning, but it still doesn't seem right to me. its only potential if there was any chance that the person was going to ever purchase it. With a person like me, who will not purhcase music for my own use (i will buy a cd for other people, but not for me) because they don't see why they should (you can listen to any song for free on the radio, you just might need to call in a request for a specific one), there is no potential income. It doesn't matter if they end up with a copy of it or not. They still would have never given any money to the company.

And can people please stop comparing downloading music to stealing a cd or a shirt or any other tangable good. They are very different. Stealing a cd takes away the ability for someone else to buy it. downloading a song doesn't take away that ability.


RE: Well heres my view...
By mdogs444 on 9/25/2007 11:15:04 AM , Rating: 2
digital music is not considered a tangible good, you are correct.

However, they are both still "products" that require payment for obtaining them.

The bottom line is that if you do not pay for it, you do have any "rights" to be able to have possession of that good.


RE: Well heres my view...
By acer905 on 9/25/2007 11:23:18 AM , Rating: 2
And alas, thats what the radio is for.


RE: Well heres my view...
By Vanilla Thunder on 9/25/2007 11:40:07 AM , Rating: 2
Because the radio is just packed full of songs I'd love to listen to. </sarcasm >

Vanilla


RE: Well heres my view...
By TomZ on 9/25/2007 12:04:18 PM , Rating: 2
I agree with that - I would consider a radio station "good" if I like 1 out of 4 songs. Most are much worse in my experience.


RE: Well heres my view...
By acer905 on 9/25/2007 12:15:32 PM , Rating: 2
Weird, i have 4 stations that i love to listen to because they rarely even play a song i'm not in the mood for, let alone something i don't like.


RE: Well heres my view...
By acer905 on 9/25/2007 12:17:47 PM , Rating: 2
Might i ask what type of music you are looking for?


RE: Well heres my view...
By Vanilla Thunder on 9/25/2007 1:24:29 PM , Rating: 2
My taste in music is so varied that it would be hard to touch on it all. But I'll try to give you a general idea by throwing out some band names I have on the current playlist of my MP3 player.
The Beatles
Beastie Boys (Paul's Boutique)
Blind Melon (Soup)
Bob Marley (Exodus)
De La Soul (De La Soul is Dead)
Dinosaur Jr. (Where you Been?)
Handsome Boy Modeling School
Jane's Addiction (Ritual de la Habitual)
Keller Williams (Breathe)
Kyuss (Welcome to Sky Valley)
Medeski, Martin, and Wood
Michael Jackson (Thriller)
moe. (The Conch)
Phish (Rift)
Prince (Musicology)
The Code Talkers (Now)
The Flaming Lips (At War with the Mystics)
The Mars Volta
The Talking Heads (Remain in Light)
Tool (10,000 Days)
Umprhey's McGee (live)

This is just a small sampling of my ecclectic tastes. Needless to say, radio comes nowhere near satisfying them.
Sure, you might occassionally hear one of these bands on the radio, but not often, and never deep cuts.

I'd also like to say that I would never buy an album for a single song. I look at albums like books. There might be a weak chapter or two, but the overall story better grab me and make me want to hold on for the whole ride.

Vanilla


RE: Well heres my view...
By werepossum on 9/25/2007 6:14:39 PM , Rating: 2
quote:
I think i see your reasoning, but it still doesn't seem right to me. its only potential if there was any chance that the person was going to ever purchase it. With a person like me, who will not purhcase music for my own use (i will buy a cd for other people, but not for me) because they don't see why they should (you can listen to any song for free on the radio, you just might need to call in a request for a specific one), there is no potential income. It doesn't matter if they end up with a copy of it or not. They still would have never given any money to the company.


That makes the assumption that people who would steal music would otherwise own no music. Personally, I don't believe that. I do believe people who steal music would own much less of it. Like anything else, people consume more of a product when it's free, a concept seemingly beyond most politicians. I don't buy the industry line that a fifteen year old kid with 2,000 ripped albums would otherwise have spent $30,000 on music - but he would have spent something, or had someone spend something on him.

Very few people willingly spend time downloading something of no value to them, even for free. Conversely, when birthdays or Christmas roll around few people ask for something they are currently getting for free.

Unless of course you have some weird idea that stealing is wrong...

Music on the radio is not free. Nothing that requires materials or labor to produce is free. Like government health care, the cost is simply shifted to someone else, in this case advertisers who believe that by subsidizing your entertainment they can sell you more of their goods or services.

And while I'm up on my soapbox anyway, I should point out that the free market largely sets prices. Every company is out for profits, unless it is a charity or run by idiots. Each product has an associated base cost, which can be increased (say be spending money on advertising, or stamping CDs as opposed to electronic distribution.) Below that cost there's no point in making and selling the product, unless of course you use it as advertising for another product or you have an inventory and need money now more than potential future products. A certain number of people will purchase that product (goods or or service) at that price. As you raise the price, either to fund advertising or to provide profit, fewer people are willing to pay the increased price. The purpose of every company's marketing, whether it is a vague notion in a hot dog stand operator or a thousand suits in dedicated buildings across every continent, is to find the intersection between increasing price and decreasing sales. That holds true for your corner music store and the largest music producer, and it holds true for the internet service you use to steal your music.

So please spare us the rhetoric about the evil corporations.

Jumping down off my soapbox now. Whee!


"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home














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