Apple threatens to dump iTunes if music prices rise

September 30, 2008

Apple threatens to dump iTunes if music prices rise Apple has earned a reputation for dramatics and bold moves with its approach to introducing new technology and marketing slick new products. Those dramatics are now serving well as it threatens to destroy it’s own brainchild, iTunes, if proposed hikes in the prices to download music become a reality.

With over 80% market share in the legal music downloads industry, iTunes has a huge footprint that would impact the lives of many people who rely on the software to find new content for their iPods. Of course, that probably doesn’t bother Apple terribly because it’s more interested in selling iPods than music. iTunes may be a major hub of activity for digital downloaders, but they would probably find other sources for entertainment.

The key problem is that companies haven’t found a way to add significantly more value to consumers who download music legally. It’s much easier to motivate people by rewarding good choices rather than punish and condemn undesirable habits. That could be a lesson the RIAA and music industry will never learn.

iTunes Vice President Eddy Cue says,

If the [iTunes music store] was forced to absorb any increase in the … royalty rate, the result would be to significantly increase the likelihood of the store operating at a financial loss – which is no alternative at all," Cue wrote. "Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [the iTunes music store] if it were no longer possible to do so profitably. According to CNN Money.

This battle has been a consistent sore spot between the music industry and Apple especially as CD sales continue to spiral. Record companies and copyright holders are looking to replace that revenue and digital downloads is the most likely candidate.

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7 Responses to “Apple threatens to dump iTunes if music prices rise”

  1. Ryuu:

    Good to see that apple is fighting the RIAA… At least Indie musik stays relatively low in price…

  2. John:

    And what do we end up gettting?
    Way to stick it to the man Apple. You really showed em!

  3. Mar:

    And most internet users will remain completely unaffected either way as they are still pirating away despite all efforts to stop them.

  4. rich:

    The reason why prices are low, is so that people who pirate because they don’t think it is worth £14 for 12 songs will pay £3 for the same 12 so by increasing price of downloads, won’t that just push more people back into pirating?

  5. Dragod:

    I can see it now; Piracy rises and the search “Free MP3s” rises on Google.

    iTunes, Zune, and other digital distributors need to learn from Valve’s Steam… Offer deal weekends for artists or albums, don’t make the DRM intrusive and alienating, don’t treat potential customers as potential pirates (Zune paying a “Piracy tax” comes to mind), Make the idea of owning the product attractive rather than saying “take it or leave it.”, offer GOOD service.

    I had a fraudulent charge on my CC from someone using it to buy a $100 pack on Steam; I emailed them and had the whole thing resolved in about 2 days.

    Also, this may be just me, but I don’t understand why iTunes, Zune, Amazon MP3, etc, don’t offer different bitrates (free of charge, not Apple’s DRM-free solution). Educate the consumer (or just make it brain-dead simple; “Click the capacity of your device”) about bitrates and how they affect sound quality vs. space used. 128kbps is just unacceptable, especially at $1/song.

    The value factor just isn’t there when it comes to purchasing the music legally.

  6. Dee:

    At least SOMEONE is growing a sack and rebelling against ridiculous price increases “just because”.

    I don’t see any music artists going broke on their YACHTS on the gossip websites…maybe they shouldn’t be so greedy, or people might be inclined to not purchase as much music, and they would have to rely on *GASP!*…actually working!!! i.e. Live concerts!!

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