Music Industry Folks Worried About iTunes Variable Pricing

from the it's-going-to-annoy-people dept

Aaron Martin-Colby alerts us to an LA Times report saying that Apple's variable pricing for iTunes is set to launch on April 7th (a week later than initially planned). More interesting, however, are the reports that many music industry veterans are quite worried about this, and believe that Apple and the major record labels are making a big mistake in that it's going to piss off and annoy fans, just at a time when they should be embracing fans and giving them more of a reason to buy. The fear is that adding that extra $0.30 to many tracks will add in enough of a mental transaction cost ("is this song really worth that extra $0.30?") that it may harm sales. Some, like Ted Cohen (former EMI exec, who's now been pushing his former colleagues to finally enter the 21st century) worries that it's going to backfire in a big way:

"This will be a PR nightmare. It is for the music industry what the AIG bonuses are for the insurance industry."

And the manager of Nine Inch Nails noted something similar:

"Wouldn't it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?"

Oddly, the LA Times article claims that the new pricing scheme is "true to supply-and-demand economics," but, as Gizmodo notes, that's not true at all. The supply is infinite. So if it were true to supply-and-demand economics, the price would be free. The actual price is based on an artificially limited supply and a made up demand.

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Recording Industry, Once Again, Stomps Out Optimism

from the it's-what-they-do-best dept

My initial summary of my trip to the Midem music industry event in January was that it was about turning "optimism into denial." There was a tremendous sense of optimism from all sorts of upstarts: musicians and companies who were really innovating and creating wonderful success stories over and over again. And then... the old school industry guys showed up. They spoke about the optimism and the success stories... and said a few things that made it sound like the got it. They talked about ending this "war" with consumers, and focusing on solutions that worked. But, then the clouds would descend, and they'd immediately start angrily saying that even with these great new business models and innovations, "we need to stomp out piracy." In doing so, they demonstrated how severely they missed the point -- and it's now showing in their actions. We've been seeing more braindead maneuvers over the last month with highly questionable lawsuits, and licensing decisions that only serve to piss off users.

It seems that my initial read is (unfortunately) the same conclusion others are coming to as well. Two of the "industry insiders" I got to meet at the event -- who both came down on the "optimistic" side at the event have each written up blog posts for the MidemNet blog, complaining about the very same thing. That initial sense of optimism that was seen at the event has pretty much gone away -- crushed by dumb moves within the industry. Ted Cohen, who helped moderate much of the event, diplomatically points out that for all the talk of collaboration at the event, the chaos isn't over, and he wonders when we'll actually get down to business. Meanwhile, Bruce Houghton (of the excellent Hypebot blog) more specifically fears that all the talk of a more collaborative approach was nothing more than talk -- and there is no intention to really collaborate.

This is a pretty big problem -- and I obviously won't speak for either Bruce or Ted, who I'm pretty sure would disagree with this assessment -- but, it won't change until the old system and the old structures and the "old guard" are finally pushed out. There are tons of success stories -- but those are in spite of the industry, not because of it. It's time to wipe out the house of cards that the industry has built in terms of Rube Goldbergian copyright licensing schemes, and start fresh. There are business models that work great for everyone -- but the current system is designed to allow bystanders and middlemen to profit at the expense of the musicians and the public. Get rid of the old system, and everyone but those middlemen will benefit.

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