Friday, April 10, 2009

Variable Pricing Lands at Online Music Retailers

You may have heard the news about Apple's iTunes store moving to a variable pricing model, which means no more fixed 99 cents for individual songs across the board. (iTunes previously had different pricing on its DRM-free "iTunes Plus" offerings, but that looks to be all over, as the retailer is removing all the digital locks from its 10 million-song catalog.)

The major labels have long pushed for variable pricing at iTunes, and they finally got it. According to reports, Apple negotiated a with the labels to remove DRM from their tracks in exchange for a tiered pricing plan with "less popular" songs at 69 cents and up to $1.29 for current chartburners. The new scheme kicked off with little fanfare from Apple on April 7. [UPDATE: Check out this article by Glenn Peoples of Billboard about how the price changes are affecting sales ranking.

FMC asked our Twitter pals if this would affect their purchasing habits; here's a handful of the responses:

summervillain: much less difference to me than removing DRM. But sounds like it could benefit the long tail?

bryanvargas: iTunes is already a bad deal. Emusic & Amazon are much better options.

villageworkscan: I think it will devalue MP3s for unknown indie artists. There should be a minimum scale - > don't like? don't buy

Disasterdisastronaut: iTunes is last port of call if I'm really, really desperate - after hypem, napster, etc amazon move 1st of many!

AngelaOrtiz: Do people still buy music? :-)

We hope that last tweet was tongue-in-cheek.

This informal, completely unscientific survey indicates that some folks aren't big iTunes customers to begin with. This is interesting, because not long after we asked the question of our tweeps, we caught wind that other digital music retailers — namely, Amazon, Lala, and Rhapsody — are moving to a variable pricing scheme, too.

So we might as well ask again: what do you think of variable pricing for digital downloads, and will it influence your purchases?


Calysta Rose said...

It really does influence my buying. Charging extra for popular songs is so transparently greedy that it makes my stomach turn. And I will never pay that, ever. Those songs priced less than 99 cents now look like garbage they're trying to trick you into buying. It sends an ugly message to consumers like me. And I can't see how it can possibly be good for the bands/artists. The labels won't be hurt by this because they can spread the changes across their entire stable of artists.

Robin said...

I will not pay 1.29 for a song. Not even for my top three bands. I feel I've been scammed enough over the years. If the retailers want to offer me songs for under a buck, and they're from bands I'd buy anyway? Sure, I'm all for it. But they can take their 1.29 and stick it. I won't go P2P, either. Better than that, I'd stay away from music period, first. I did it in the 90s, and the industry can't blame P2P for that. They can blame the filler they crammed on the CDs I paid a fortune for. I'll spend money on music, but I won't waste it, ever again.

Joe E said...

I really feel like people should focus more on the ethics of all this. I think the common conception is that music is somehow a commodity meant to be free...that it's unlike any other product out there. For instance, I did an informal survey in one of my classes (18-22 year olds, political science majors), and the majority of people thought that music was meant to be free...that artists deserve to be paid absolutely nothing for a product they slave over.

There doesn't seem to be a distinction between right and wrong being made here...

I feel like iTunes/amazonmp3 could market this issue so much more effectively.

As per this post, specifically, though...I'm not an iTunes fan. Amazon's deal a day (often 2.00 for an entire album) and complete lack of DRM is a beautiful thing.

Calysta Rose said...

I would like to address one of the topics that Joe E brought up in his comment:

"I think the common conception is that music is somehow a commodity meant to be free"

I'm going to have to disagree there. In my own informal discussions with family, friends and (many) on-line acquaintances (ages ranging from 10 to 65, but primarily in the 20-45 range) I have not found that to be true. There are many people that don't seem to care about music. They've bought the record label/radio marketing that says songs are only good until the next Great Thing comes along. And so music is disposable to them. They download it, listen to it a few times and then it just sits there on their computer, forever ignored. As for whether or not artists/bands should get paid? That doesn't even occur to them. If a song is on the radio, a song with a video especially, well obviously the artist/band is wealthy. All the gossip rags/shows and MTV and other such outlets show these bands jetting around, partying and dressed up fancy. So, obviously, they're rich, right?

The point I'm trying to make is this: the labels' marketing scheme to make everyone want the next new thing, to believe that these artists are living a charmed life - it worked. And the labels have gotten just what they deserve for building such a ludicrous house of cards.

Additionally, the only option that I can think of for 'reclaiming' any revenue from people so thoroughly brainwashed into the disposability of art is through a hybrid streaming/download subscription service. Add two bucks a month to their cell phone bill for streaming 'radio' in the style that they like and they'll be set. Give them the option to download 'faves' to their phone to keep as long as they pay the monthly subscription, and you'll make even more of them happy.

Robin said...

That disposable nature of music Calysta Rose mentioned is a great example of how the industry has cannibalized itself. If music is now thought of as ephemeral, it's because the major business interests did that. In the driving effort to cash in on every cent for the now, it has sacrificed the future. I always thought the name Evanescence for a band was sadly ironic.

I do believe variable pricing will serve as yet another example of that short-sightedness. And I believe the consumers and the artists will suffer for it every bit as much as the scrambling major business interests.

Like Joe E, I've also had the opportunity to survey students about their thoughts on music and money and the related topics. I teach IT (at the 100 through 300 levels, and all of my classes have copyright discussion components), and I've yet to have a student say they believe artists shouldn't be paid for their labors. That's pretty much one thing they all agree upon, that the artists have gotten the short end of the stick in all of this. (And no, they weren't just trying to please their professor. They give me plenty of lip, but never lip service).

How they believe artists should realize the monetary rewards of their efforts wasn't so easy to quantify or reach consensus upon. This is generally where discussions devolve, with widely varying opinions on the role of P2P and digital media overall. Unfortunately, I have limited time for this line of discussion, before we have to move on to our other course topics. But at least they leave class thinking about it.