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The verdict is out – Apple Computer will continue to sell songs through its iTunes Music Store at 99 cents apiece. The company has confirmed renewing of contracts with four big record companies to arrive at this decision.
The agreements have come after months of bargaining, and are being seen as a defeat of sorts for music companies that have been so far pushing for a variable pricing model.
The bone-of-contention has been on one hand the music industry wanting to put-in-place differential pricing, while Apple on the other insisting that prices remain uniform. At one point the debate looked like Apple would be forced to introduce multiple price points for its iTunes downloads.
However after months of negotiations, Apple has emerged the winner with the declaration that prices of songs on iTunes will remain at 99 cents per track.
The core of these negotiations also remains the same. Record companies continue their reactionary holding tactics — like DRM. They are so accustomed to running their domain like feudal barons they won’t consider a business model that works with today’s technology. Consumers are running lightyears ahead of these slugs and the success of the iPod/iTunes business model continues to prove the point.
Update: Sorry, the link in the post doesn’t match anymore. The post from the publication disappeared and I’ve substituted another similar.
Actually, the saying goes: “the verdict is _in_”.
The comrads strike again!!! I wish someone would tell me how this makes the record companies the bad guys and Apple the knight on the white horse? All it is is two greedy organizations trying to maximize their profits!
Did anyone think that a multiprice model might help consumers, because it will allow tracks to be downloaded for LESS than 99 cents? Or if I were in a new band, I would love to be able to post on itunes for downloads, and charge just what apple needs to make its $ (supposedly 19cents or so a track).
And then, the gall of bringing up DRM! I believe that the itunes/ipod combo is probably the most widespread DRM system in the world. Consumer friendly would minimally allow apples DRM to be licensed to other mp3 players.
Its amazing that a company like Apple, which has had percentage gross profit margins that would make ExxonMobile blush, is considered as consumer’s savior. What a joke!
As some readers here might now, I am very much a libertarian (economically and otherwise), so I completely respect both Apple and the Record companies for at least trying to do what they believe is best for themselves. But I never forget that what’s best for them does not assume any (automatic) connection with what’s best for others.
Too bad the marketplace doesn’t agree with you, Lou. That’s OK. Buy some Sony stock.
re #3, Moss:
The marketplace may agree with apple on this one, but they agree with microsoft on the OS/computer side of things. Marketshare does not imply anything: neither quality, benificence, value to consumer, etc. For every lead market product that has lots of positives, I’ll name you 10 that are only their because of marketing, monopolistic practices, or maybe just luck.
Remember, Apple protects its itunes and ipod sales by not allowing the itunes DRM to run on non-apple portables. Not for the consumer’s benefit, not for the content holders, but completely to maximize their profits. They are no more (or less) righteous than Sony, Microsoft, Exxon, etc. etc. etc.