The iTunes
99-cent pricing on iTunes in the US will likely come to an end if the record
companies gets its way, especially since the contracts for several big record companies Apple
has deals with are due for renewal. For example, Apple's Japanese iTunes store does not contain any music from Sony BMG simply because Sony BMG wanted to charge more for its music.
Apple's chief executive Steve Jobs mentioned that the record companies are already making more profit from its iTunes service than from CD sales. This is mainly due to the fact that music sold online does not incur any transport or manufacturing costs such as those involved in mass-producing and shipping CDs, not to mention the costs of running high street shops. As a result, Jobs claims that the record companies are getting a little greedy by trying to push up the pricing on downloadable tracks.
While
iTunes is currently
doing very well, this is also a very bad time to try and push up pricing, since there are still a lot of people sharing copyrighted tracks over file sharing networks, thus pushing up prices will simply start making people think twice using legal services. So far, iTunes accounts for 82% of the market for legal music downloads. Thanks to both DamnedIfIknow and Quakester2000 for using our news submit to let us know about the following news:
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Mr Jobs vowed to resist such pressure, after revealing that music firms were pushing for higher prices on Apple's iTunes internet music store. He said companies already made a bigger profit through iTunes than in CD sales. Apple's co-founder was speaking ahead of the Apple Expo showcase in Paris. Record companies did not comment.
Mr Jobs said that by cutting out manufacturing jobs, selling through iTunes was already proving lucrative for record companies. "So if they want to raise the prices it just means they're getting a little greedy," he said. |
In my opinion, the 99c pricing on downloadable tracks is high enough. If the record companies do indeed make more from iTunes than from CD sales, they should really consider cutting the prices instead, even if it means doing so on a trial basis. For example, if they drop prices by half and the usage more than doubles, then they will make more than as it stands at present.
Feel free to discuss about iTunes and other music services on our Music Download, Peer to Peer (P2P) & Legal Issues forum.
Source: BBC News - Entertainment
