| Subject: I-tunes downloads exceed in-store CD prices |
Author:
Betty
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Date Posted: 13:46:32 04/18/04 Sun
In reply to:
Betty
's message, "RIAA seeks end to .$99 per song download" on 11:24:17 04/14/04 Wed
A year ago this month, the music-downloading business came to life with the debut of Apple's iTunes Music Store. By the numbers, the store has done outrageously well. More than 50 million songs have been downloaded off the service to both Windows and Mac OS X machines and the store is on track to hit 130 million songs a year, Apple brags.
A flock of competitors, including stores from Roxio, RealNetworks and Wal-Mart, have followed Apple without catching up -- not in ease, not in elegance and not in numbers of downloads.
But the iTunes Music Store's success hides a couple of unsettling trends. One is pricing -- a lot of albums now exceed the store's customary $9.99 price, and a few even exceed their cost as CDs in a store. The other is compatibility -- though a variety of consumer-electronics devices could be made compatible with iTunes music files, the only one Apple permits is its own iPod digital-music player.
As the store approaches its first birthday on April 28, current and potential iTunes customers would be wise to note how Apple and the record labels address these concerns.
Album prices have gotten the most attention lately, thanks to a few egregious examples. For instance, Janet Jackson's "Damita Jo" goes for $16.99 on iTunes, while the CD will run you $9.99 at Best Buy. Indie-rockers Modest Mouse's "Good News for People Who Love Bad News" carries a $13.99 price tag at iTunes, while Barnes & Noble's Web site lists it at $9.73.
Other cases of iTunes inflation are more subtle. Bob Dylan's "Highway 61 Revisited," at $13.99, costs the same on iTunes as on Amazon.com -- but the disc the Web retailer sells is a hybrid SACD (Super Audio Compact Disc) that offers better-than-CD sound on new players while still working in older stereos.
"The Essential Bruce Springsteen," a three-disc compilation released last year, costs less on iTunes than in most stores. But while the first two-thirds of the set -- previously released tracks that Springsteen fans already own many times over -- can be bought individually, the live versions and other rarities on the third CD aren't sold a la carte. People who already have multiple CD shelves devoted to the Boss (i.e., me) are effectively being asked to pay $19.98 for 12 songs.
This doesn't seem to be a widespread trend, yet. Of the almost 120 albums released on iTunes over the past three weeks, I would describe only 13 as instances of price gouging.
Apple says that any higher prices are influenced by what the record labels charge the company for each release. The labels, meanwhile, insist that they don't control stores' price tags. The wholesale prices they set leave room for retailers to choose their own profit margin -- which can be less than zero, in the case of CDs sold as loss leaders.
A representative for EMI Music North America (which owns Virgin Music, Jackson's label) added that its digital downloads cost less at wholesale "across the board" than its CDs.
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