It was working so well, it was about time the music industry decided to screw things up. Yep, it looks like the big recording labels aren’t happy with the way Apple’s iTunes does business. Instead of the current 99 cents per song, they want variable pricing (read more expensive) - in some cases raising the price of a song by 50%. The New York Times has a great article on the coming pricing battle between Apple and the recording companies. An overpriced crappy product is what spawned the original Napster. It was the sensible pricing and good business sense of Apple CEO Steve Jobs that has started to stem the tide of music swapping on the net. The music industry had better think long and hard before they start trying to squeeze a few extra cents per song out of their customers. The iTunes music store has gone a long way in fixing the piracy situation, but at the end of the day, the bigger problem of the music industry churning out a crappy product remains. While people may tolerate paying 99 cents for a song by the likes of Ashley Simpson right now, a 50% price hike might just make them think twice about that purchase. Or even worse for the music industry, it might make folks think about firing up their now dormant copy of whatever file swapping program it was that they used to use. Either way, the music industry loses. Apple... not so much. By all accounts they don’t make a whole lot off of the iTunes music store anyway, but they are going to keep selling a crap-load of iPods, regardless of whether people are acquiring music via iTunes or some file swapping program. And no, I don’t believe most people will ever switch over to the iPod incompatible Widows Media based music stores. So big music loses, and Steve Jobs and the boys at Apple will keep watching their bank accounts grow. The big music companies also appear to be a tad bit unhappy with Apple’s dominance in the MP3 player business. Given what just happened to one of Apple’s better known competitors in the MP3 player market, Rio, big music would be well advised to not rock the boat. I doubt Rio will be the last to exit this market, and I think some of the online music stores will likely go a similar route. Companies like music label Sony BMG should just sit on the sidelines and keep their mouths shut; especially given that the consumer electronics division of Sony has had such a noticeable lack of success trying to take on Apple in the MP3 player market. Every time I hear about a new copy protected CD from Sony BMG I have to wonder if they would be churning out such items if the Walkman was the best-selling MP3 player. I guess we’ll never know since the days of Sony being the dominant leader in the portable music industry are long gone. Unless of course their new “Bean” suddenly turns the MP3 player industry on its head. I’m guessing that is about as likely as an ice sculpture contest in Hell. (By the way Sony, maybe you might want to hire people to spell check your ecommerce site. I’m pretty sure the color of that Bean is supposed to read “Cotton Candy Pink”, not “Cotton Candy Pin”. No doubt your keen attention to detail has contributed to your success in the MP3 player market.) Nothing big music does is going to hurt iPod sales, or turn people away from iTunes towards rival online music stores. If anything, any damage that big music inflicts on iTunes as it looks to inflate its own bottom line will turn people back towards rampant piracy again. They certainly aren’t going to turn to the music subscription (read rental) services. And as with the original rise of Napster, the only ones to blame will be the big music companies. So to big music industry executives I say, please listen to Steve Jobs, he’s smarter than all of you. In the end both you and your customers will win if you stick with current iTunes pricing scheme. To customers, if they do raise the prices, don’t steal the music. Instead spend your money on used CDs. That way you get the music you want without being a thief, and the music industry doesn’t get a red cent from you. (Although some other poor schlub has already contributed to their bank accounts.) Truly a win- win situation if you ask me. On the other hand, if the recording industry does come to its senses, you really should keep supporting iTunes, it’s a pretty darn good deal the way it is right now.

¶ 8/27/2005 03:48:00 PM

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