Why Apple is more expensive than Amazon
weblog.raganwald.com
weblog.raganwald.com
My understanding, from talking with some label people was that they hate iTunes store because it has a fixed price per track. The reason for them not liking this was pretty shocking to me at the time: a price that can be varied allows labels to threaten artists with price signaling. In essence, "do what we tell you, or we'll reduce the price of your tracks far enough that consumers will assume they're crap".
From what these guys said, they couldn't care less about DRM. If iTMS would just allow them to vary the cost per track, they'd love it.
I am so glad I no longer work in that industry.
Variable pricing also sends signals to consumers. A $1.99 single can be positioned to be better than a $1.50 single which can be better than a $0.99 single.
I think Apple probably had to introduce DRM to be able to make a deal with the music industry. At least I remember Steve Jobs proclaiming that DRM is bad later on - he could simply have changed his opinion in alignment with customer wishes, though. But to think that they would love to give us the music for free goes a bit too far.
Also, afaik the "DRM-free" music on iTunes still has DRM: it is signed with your name. So you can copy it freely on your own devices, but you can not sell it on ebay. The ebay factor is something I still don't see factored into the prices for online music (it should be cheaper than CDs, because I can sell a CD once I get tired of it).
Did I write that? I don't remember, and I can't find it int he essay. I wrote that they would love to be able to compete with Amazon on price and that if they could get it from the labels on the same terms as Amazon, they woul doffer it at the same or lower price.
As for free iPods, I don't remember writing that either. That being said, lots of companies work very hard at making their products less expensive in order to occupy mor eof the market. Last time I checked, Apple has offered a variety of iPods over a very broad spread of prices, from shuffle to iPod touch 32GB. Cheap iPods = no oxygen for competitors at the low end.
That's a perfectly normal business strategy, isn't it?
"you can copy it freely on your own devices, but you can not sell it on ebay. The ebay factor is something I still don't see factored into the prices for online music (it should be cheaper than CDs, because I can sell a CD once I get tired of it)."
That is a novel and interesting point. Thank you.
It just seemed to me that it was too much biased in favor of Apple. Unless you have insider information, I am not convinced that your theory is right. It is a possible explanation, but on the other hand, Apple has a nice lock in with iPods and iTunes. Do they care about DRM? Maybe: they might be happy that you bought an iPod. But the thing is, once you consider upgrading to a newer, fancier MP3 Player, you better make it another iPod, or you lose your music. So Apple does benefit from DRM. Not saying that is what they want, but it is an alternative theory.
Possibly they simply charge higher rates because they can (yay for fanboys). Most consumers by now might associate digital music with iTunes and not even check Amazon for prices.
I think Amazon also has the DRM that signs the MP3s with the buyers names, but I am not sure (haven't actually bought any music online yet).
For example, I wrote that essay as if there is one, coördinated strategy with iPod and iTMS. In reality, there may be iTMS managers who are trying to maximize profits for their division while the iPod managers are trying to undermine iTMS and commoditize it for the benefit of their division, just as if they we in coöpitition as independant companies.
So... the truth is probably way more complex than we imagine, or even could imagine.
The actual issue is that the music industry realizes how powerful the iTunes Store has become and they feel threatened, so they'll give anyone a deal who says they'll compete with Apple.
Amazon can't sell DRM'ed mp3s with any degree of success because they won't play on ipods. Apparently they figure if they can break the ITMS stranglehold they'll be able to offer music only in their DRM & hopefully further restrict or shut out the ipod. Classic content owner's mistake of overvaluing the content, and undervaluing the platform.
It's that the Apple fanboys are boring. It's like hearing the same song, over and over. And it's not a good song, it's like hearing "Who Let the Dogs Out" or something.
If the fanboys could admit that Apple stuff isn't totally perfect, and there actually are better alternatives depending on people's needs, that would lend a lot of credibility to their argument.
I was one of the first people to get an iPod and hop onto the ITMS bandwagon. Now I'm happily jumping off to Amazon's store, simply, because they have a better store.
Perhaps, but the iTunes Store helps sell more iPods, and vice versa, as long as iTunes songs can only be played on iPods, and iPods can only play DRM'd music from iTunes (and of course DRM free pirated/ripped/purchased music)
When you are the market leader, when you have the biggest piece of the pie, you have the most to gain from the entire pie growing exponentially. Right now, Apple has the most to gain from music players growing as a market. I suggest that DRM-free music makes the market for music players grow exponentially, and locked-in music holds the market back.
Remember, the vast majority of the music on iPods today is DRM-free MP3s. Apple profits from consumers ripping their CDs to MP3s. The more DRM-free music is out there, the more iPods people will buy, even though they also play on other machines.
Let's say you want to listen to the grunting and humming of an overrated maniac,
http://www.amazon.com/Bach-Goldberg-Variations-Recording-Exp...
Listen to track 6, for instance.