Jobs vs Record Labels

What's up with the major labels anyway? Are they that short-sighted? Of course, we already know the answer to that, but still. They make 70% of each iTunes store sold song. Why is it that I can purchase a DVD, containing sometimes over 9 Gigs of data, containing the efforts of hundreds of well-paid Hollywood professionals, containing a film that cost $100,000,000 or more to create for less money than I can purchase a re-issued music CD, containing usually about 600 Megs of data, containing the efforts of a few dozen moderately paid musicians and engineers (sometimes even artists who died many years ago with really crappy royalty arrangements), containing an hour or so of music, and probably costing the record label, at most $100,000, and that's probably being generous? Do 40 songs recorded by Sonny Boy Williamson in 1955 really cost more to produce than Star Wars 3? Not even making any argument about quality (because of course, Sonny Boy Williamson is an American genius, and Star Wars 3 is utter dreck), but the Sonny Boy Williamson CD is currently $35.49 and the Star Wars DVD is $15. Sonny Boy Williamson probably got a couple thousand dollars, tops from the Chess brothers, while George Lucas can sleep in an entire room full of $1,000 dollar bills, ala Scrooge McDuck, if he chose to.

So, the Record labels can kiss my ass.

Apple, Digital Music's Angel, Earns Record Industry's Scorn
Steven P. Jobs is girding for a showdown with at least two of the four major record companies over the price of iTunes songs. Mr. Jobs is now girding for a showdown with at least two of the four major record companies over the price of songs on the iTunes service. If he loses, the one-price model that iTunes has adopted - 99 cents to download any song - could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for $1.49....

Apple has long allowed different prices for full albums sold on the service, though it believes that maintaining the 99-cent price for each song on an album acts as a natural cap. The service, which is available to consumers who download iTunes software to their computers, allows users to choose from roughly 1.5 million songs from major and independent labels. The songs, once paid for and downloaded, can be transferred to an iPod device, burned to blank discs, or played on the computer. At the price of 99 cents a song, the share of the major labels is about 70 cents.
Some analysts suggest that the willingness of the music companies to gamble on a new pricing structure reflects a short memory.

“As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them,” said Mike McGuire, an analyst at Gartner G2. “It'd be rather silly to try to destabilize him because iTunes is one of the few bright spots in the industry right now. He's got something that's working.”


Tags: , /

About this Entry

This page contains a single entry by Seth A. published on August 27, 2005 8:38 AM.

Canadian frustration with the US was the previous entry in this blog.

Reviews X - W, part 1 is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

Pages

Powered by Movable Type 4.37