I write the software for Geneffects and tend bar at the Cat's Cradle in Carrboro, NC.

Thursday, November 17, 2005

ITMS Price Hike: WTF?

It sounds like our $0.99 a song, $9.99 an album pricing at the iTunes Music Store is going to be going up, and the reasoning seriously makes no sense. Here's a quote from this MacWorld article:
Record labels have been grumbling at Apple's refusal to change its current price structure. They have wanted more flexibility on price, claiming that digital music sales aren't sufficiently compensating for loss of sales at retail.
Loss at retail? Are you kidding? I don't get it and there are three main reasons that are keeping me from getting it:

1) It was my understanding that when you factor in production, distribution and retail markup a $20 CD nets record companies nowhere near $10 profit. Sales at iTMS are essentially pure profit as you cut out the parts of the process dealing with the physical creation and distribution of a CD.

2) Are record companies factoring in the customers, like me, who never go to record stores? last week I bought a (laugh if you will) M.I.A. album. That purchase would never have happned had it not been for the iTMS. I love the ease and instant gratification of buying music online. I do not have to bike downtown then be judged by the insufferable hipsters to the point where I feel compelled to say, "oh, this album's for my sister."

3) Are record companies factoring in the sales they are not losing to illegal downloads? Heck, it's a no-brainer to take your laptop to a public WiFi area (so the record companies can't trace you by your IP) and download whatever you want.

So record companies I beg of you, please pull your heads out of your - um - butts. You will be killing yourself with this new pricing structure.


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