Tag Archives: iTunes

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Apple Music and the end of ownership

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I’ve been using Apple Music for a couple weeks now, just like everybody else. And I’m starting to think this might be the thing that finally pushes me over the edge away from the purchasing/owning/collecting mentality that has been a part of my life and identity since I joined the Columbia House tape club and got thirteen 8-tracks for a dollar. In high school I would take my dishwasher paycheck and buy a new imported Smiths 12-inch every week. I’ve got boxes and shelves full of CDs. I like physical media.

But the truth is I listen to 90% of my music via iTunes on my computer in my office through decent Klipsch speakers. I have a real stereo and the remaining 10% of my at-home music listening is divided between vinyl and SACDs through a vintage Project One amp and Advent Prodigy Towers. I listen to CDs in my car.

With new music my process has been to buy the CD and rip it to MP3 or ALAC and then add the songs to my iTunes library. I then throw the CD in my car or in a box or on a shelf. Or I’ll buy the record and use the download card. I have an elaborate series of smart playlists that help me make sure I give all new music at least four spins before falling out of heavy rotation. Higher ranked songs get played more frequently. Everything with three stars gets played at least once every four years or so. I’m anal. And this system works for me.

I rarely buy downloads, and almost never from iTunes. I think downloads are grossly overpriced for what you get: lossy files with no liner notes. I’ll happily spend $20 on a record, but I won’t pay more than $2.99 for an album download. Especially when you can usually get the CD for $9.99. CDs are not very glamorous but they’re lossless and they’re permanent.

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British DJs Busted in iTunes Scam

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iTunesThis story is a bit old but it’s so wacky I had to post something about it. Nine people were arrested last month in London for conspiracy to commit fraud and money laundering. Their scam was so brilliantly simple I can’t believe it’s not done more often. They stole credit cards to then buy downloads of their own songs on iTunes, thus earning them returns on the sales and bumping their chart position. You have to admire the ingenuity.

According to The Mirror, the DJs recorded 19 compilations featuring their songs and put them on iTunes. The scam netted them almost a half a million British Pounds from over 65,000 downloads!

Scotland Yard was apparently tipped off by Apple last December.

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Poll: 75% of Students Prefer Downloads to Streams

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iPhone A recent University of Reading study finds that 75% of students polled prefer downloading music to buying hard copies or even streaming, which may speak to a sort of splitting of the difference for how younger audiences view digital music. If there was ever any debate on whether people still want to “own” music, this bit of information sheds a little bit more light.

The popularity of streaming sites like LastFM, Pandora and Spotify had a lot of nobs who think about these things wondering if we’d eventually hit a point wher nobody owns and keeps any form of music—be that physical CDs and records or digital files. The idea was that as broadband and wireless technology improved and the masses moved to smart phones we’d eventually just have all music available on demand via streaming tools. But is that what anyone wants?

According to the survey of 10,000 university students, “75 percent said they wouldn’t pay for a music-streaming service but would rather use sites such as iTunes to download and keep tracks on hard drives or MP3 players.”

The survey is cited in a press release apparently issued on behalf of TunesPro.com, a new download site hoping to compete with iTunes. Their angle seems to be to undercut on price. The press release quotes a spokesman for TunesPro:

We keep our prices low and concentrate of making money through volume sales. Currently we charge 19c per song and offer a further 10% when a whole album is purchased. We believe this will attract the younger users away from iTunes, which charge almost 6 times more than we do.

So for now it appears many younger audiences still want to possess something for their money. Will that hold as the ease and cost for bandwidth decreases and becomes more widespread? Will you still want to “hold” your music?

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iTunes Shocker, Round 2: Raising Price Decreases Sales

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iTunesBack in April, we looked at some early analysis from Billboard that suggested that raising the price of songs from 99 cents to $1.29 was hurting sales but increasing revenue. In the comments, everyone pointed out that no conclusions could really be drawn from a policy that had only been in place for a matter of days. Well, it’s been a few months now, and the data is in:

Since February, weekly sales of tracks has dropped from the 25 million-per-week range to 21-22 million in July and 20-21 million in August. […] It must be noted, however, that the cause of the drop in track sales – variable pricing and $1.29 at iTunes for most hit songs – has resulted in an increase in wholesale revenue to labels.

So there are about 4 or 5 million fewer songs being sold on iTunes now, but who cares because the labels are making more money! This is exactly the kind of shortsighted bullshit that got the record companies into the mess they’re in. Sure, revenue might be up a little, but there are fewer people buying music. Fewer customers. Labels should be doing everything they can to nurture every single fan who’s willing to fork over cash for digital files. This is a classic example of the major labels shooting themselves in the foot.

When sales decrease 20-30% every two years, how long can this industry even hope to stay afloat?

Previously: iTunes Shocker: Raising Price Decreases Sales; iTunes: Why Pay More!

Via Lefsetz.

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iTunes Beats All with 69% Digital Market Share

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Two things: One, Digital sales of music is up 15% over last year; Two, iTunes is killing everyone out there, including Walmart, Target, Best Buy and Amazon.

According to The NPD Group, “Apple iTunes leads in the U.S. with 25 percent of music units (digital or otherwise) sold, which is up from 21 percent in 2008 and 14 percent in 2007.” Walmart comes in second with 14%. CDs are still the dominate medium and account for 65% of all music sold in the first half of the year but digital is gaining fast.

It’s that gaining market that is so interesting and show just how dominate iTunes is in that arena. According to the report iTunes comprised a whopping 69% of the digital sales market, followed by AmazonMP3 with just 8%. Shazam!

Previously: iTunes is #1 (2008); iTunes is #2 (2008); iTunes is #3 (2007).

Via MacNewsDaily.

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iTunes Shocker: Raising Price Decreases Sales

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Billboard takes a look at the iTunes sales charts and determines that “the increases have hurt the sales rankings of songs given the higher $1.29 price.” Once sales fall more than 23.3%, the label starts losing more money than they would’ve made had they left the price at 99 cents. The average $1.29 song dropped “about three positions” since the price increase. A drop from #3 to #6 equals a 30% drop in unit sales, which means the label is losing money on that. Billboard has a handy graph to explain this:

$0.99 to $1.29: Impact on Unit Sales, Revenue

Further down the chart, with lower unit sales differences between chart positions, it can work out better for the labels. A drop from #42 to #45 represents a difference in sales of “about 300 units per day,” but ends up earning almost $1,100 per day more for the label.

So who knows? I’m not an economist and I hate math, so if somebody can tell me whether or not this was a smart financial move by the labels, I’d appreciate it. Thanks.

Previously: iTunes: Why Pay More!

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iTunes: Why Pay More!

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We first mentioned this back in January, but now the L.A. Times puts a date on it: Hottest tracks to cost $1.29 at iTunes starting April 7.

The world’s largest music store, Apple’s iTunes, plans to boost the price of many hit singles and selected classic tracks to $1.29 on April 7, breaking the psychological barrier of 99 cents in what could be the first big test of how much consumers are willing to pay to download individual songs.

Although the date for higher prices has not been publicly announced, Apple has been notifying record labels it will go into effect on that date, industry executives said.

So what do you think? You willing to spend thirty cents more for that new Flo Rida jam?

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Apple ditches DRM, adds tiered pricing

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Apple, labels both win with DRM-free iTunes, tiered pricing:

Today, Apple promised that by the end of this quarter, all 10 million iTunes songs will be DRM-free, and released at the higher-quality 256 kbps iTunes Plus bitrate. This policy change applies across the board to all four major music labels (Universal Music Group, Sony BMG, Warner Music Group, and EMI) as well as thousands of independent labels.

In addition to that, Apple gave in and will finally allow labels to set the price of tracks to 69¢, 99¢, or $1.29 based on a “demand-based pricing system.” This is something the labels have been asking for since the beginning of iTunes.

Everyone’s a winner. Except, of course, for people who have MP3 players that cannot play AAC files…

Articles

Apple Genius? Not So Much

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Albert Einstein - Think DifferentWas a time when my friends and I made mixes for each other. It was as much a creative outlet where we, like film directors or music supervisors, created moods and told stories through the song selection and pacing of a finely tuned mix tape (or CD, as the technology evolved). We strove to outdo each other and slip in the most obscure, but fitting, references we could find and thread a common theme or musical palette. It was fun, and it was time consuming.

Last month Apple released a new version of its ubiquitous digital media player iTunes and with it is a feature they’ve dubbed Genius that they claim “creates the perfect playlist.” By combing through your iTunes library and analyzing your listening habits and those of others in their vast universe of iTunes users, Apple aspires to be your new mix disk friend.

So, how does it rate? Well…

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A Rotten Core: RIAA vs. Apple

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The company that introduced Ellen Feiss to the world, Apple, became, within one week’s time, the largest on-line music retailer. Just days after the introduction of the 99-cent iTunes Music Store, Apple has had a reported one million purchases. What is all the more remarkable about this is that Apple represents only about 5% of the PC market and is perennially considered to be on the brink of corporate oblivion. But sticking with the method that the company started with—providing innovative products for people who care about innovative products—it has proven, once again, that better really is better and that people—some people—do care about quality, whether it is in product or process (which the iTunes store arguably is: the music is the same as that which can be otherwise obtained, but it is the whole interface and downloading process that Apple software developers have devised that make the difference).

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