Steve Jobs Wasn't Lying When He Said $1 Per Song Price Would Stay

from the don't-mess-with-Jobs dept

It's the story that just won't die. Two years ago, the record labels started making noises about how they wanted variable pricing for songs on iTunes. Steve Jobs immediately made it clear that Apple wasn't interested. A year ago, the same story popped up and again, Apple said it was news to them. Last summer, the labels started saying it again, leading to Steve Jobs to flat out call them "greedy." Meanwhile, many of us were wondering how these statements weren't the equivalent of price fixing. Just a few years ago, the labels all got in trouble for telling retailers how much CDs should cost -- which is illegal price fixing. It appears the labels (even post-fine) don't seem to get this. They also don't seem to get that Steve Jobs is serious about keeping the price at a dollar. Just as the original iTunes contracts are set to expire, the labels who were all confident that Jobs would back down and allow variable pricing are suddenly discovering he's not budging at all. In fact, they're finally starting to recognize that for all their bluster, Steve Jobs is the one who has the power in this relationship -- as none seem willing to actually pull their songs off of iTunes. Of course, some of the execs continue to be totally clueless. The article quotes one unnamed music exec who is upset that the labels didn't "stand up to Jobs." He then says: "Where in life does the retailer set the price of the content?" Isn't that exactly what the lawsuit and the fine in 2002 were all about? The labels can wholesale their music at whatever price they want -- and then Apple (the retailer) can do whatever it wants in response -- just as record stores get to set the retail price for the CDs they sell. If the labels are so upset, then why don't they set their own variable pricing and see what Apple does in response?

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  1. identicon
    Posterlogo, 20 Apr 2006 @ 6:45pm

    I'd love to see what Apple does in response...

    I think the day is coming when, instead of flat out backing out of the iTMS, labels will increase their wholesale prices. I would love to see what happens then. Personally, I think Apple would hang in there, take the loss, and keep making money off the iPods and even more foray into videos. Eventually, Apples position could be strong enough to discontinue their deals with certain labels without significant loss in revenue. Hopefully, people will wonder where their favorite music went and find it elsewhere, like P2P. Thus, sticking it to the labels. Which is what I really would love to see. Man, I wish I could walk up to the musicians I love and hand them $5 and say thanks for the music, let's keep this between us and screw the middle man.

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