Apple to Raise iTunes Prices?...
EMI chief says Apple will change to a flexible pricing structure.
November 17, 2005
Apple Computer may blink after all on its dogged determination to keep its price per download for iTunes songs at an across-the-board $0.99.
The company that created the portable digital device sensation, the iPod, and the iTunes Music Store that drives it, may be about to give in to pressure from music publishers such as Warner Music Group and EMI Music.
In a story in Thursday’s Wall Street Journal, Alain Levy, chief executive of EMI, is quoted as saying that he discussed the issue with Apple CEO Steve Jobs and he believes that Apple plans to change its one-price policy. Apple wouldn't comment to RedHerring.com about the report.
According to the paper, Mr. Levy said the issue is not really whether Apple will introduce flexible pricing, but when it will do it.
Shares of Apple were down $0.28 to $64.67 in recent trading.
Back in September, Mr. Jobs blasted music industry executives, calling them greedy for pushing for an increase in the price of downloaded music, saying their demands, if met, would serve to encourage piracy.
Warner Music Group CEO Edgar Bronfman Jr. rose to the challenge, saying the single-price strategy was unfair to the music industry, the artists, and the consumer (see Bronfman Fires Back at Apple). He said the market should decide what music downloads should cost, not a single retailer like Cupertino, California-based Apple.
“Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past,” he said.
Mr. Bronfman said the digital music industry had become the only one that did not have flexible pricing. He could have pointed to the movie industry as a glaring exception to that rule. No matter which movie one attends at the multiplex, whether it’s a hit or a dog, it costs the same.
Sharing iPod Revenue
“We are selling our songs through iPod, but we don’t have a share of iPod’s revenue,” he said. “We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.”
At the time Mr. Bronfman called for flexible pricing, Apple refused to respond to questions about the notion that superior or more popular music could be priced higher than $0.99. But according to Mr. Levy, Apple will relent in the next 12 months.
Sales of digital music have been growing in the last couple of years and now account for more than 5 percent of the global recorded music market. That is about three times the level of a year ago.
“There are some reports showing that single-track downloads in the U.S. are slowing, but we are also seeing full album downloads in the U.S. accelerating in growth,” said Eric Nicoli, chairman of EMI Group. “We are interested in digital distribution of every kind all over the world. We are interested in downloads, in subscription models, in legalized peer-to-peer, in every aspect of mobile distribution.”
EMI, which posted its six-month performance on Wednesday, said its digital sales grew by 142.4 percent to $76.5 million, representing 4.9 percent of total group revenues, up from 2.1 percent of the firm’s revenues in the prior year’s first half (see A Sour Note on File Sharing).
EMI wants a premium for star downloads
By Dominic White (Filed: 17/11/2005)
The price of downloading singles by hit artists such as Robbie Williams and Gorillaz is set to rise after EMI said it expected Apple's market-leading website iTunes to offer "differential pricing" within the next 12 months.
Alan Levy, chairman of EMI Music, said Apple's chief executive Steve Jobs had indicated in "intensive discussions" that he would be prepared to drop iTunes' flat-price model. Apple, which has 85pc of the global music market in legal downloads, charges a flat rate of 79p for a single in the UK, 79c in the US and €0.79 in Europe.
Robbie: worth more than 79p?
However, EMI and other music majors want it to charge more for big name acts and less for up-and-coming artists to reflect demand and maximise revenues from the fast-growing sector.
"First of all we would like to reduce pricing on new and developing artists and charge a premium for our superstars," said Mr Levy.
Eric Nicoli, the chairman of EMI Group, added: "This is not about raising prices. It's about getting the most effective charging structure."
Apple, which sells more than 1.8m songs a day on iTunes, refused to comment. Japan is the only market where iTunes charges more than one price for a single track.
EMI's comments came as it posted better-than-expected, first-half profits helped by albums from Coldplay, Gorillaz and the Rolling Stones. Underlying pre-tax profits rose 9pc to £41m from £37.6m, although reported pre-tax profits dropped to £32.6m from £54.8m, hit by lower financial exceptional net income. Turnover rose 5.8pc to £925m.
Mr Nicoli predicted a bumper Christmas, helped by Robbie Williams' new album Intensive Care. It has sold 3.5m units in its first three weeks, his fastest selling album since signing with EMI in 1996.
EMI's digital music sales grew 142pc year-on-year to represent almost 5pc of total revenue, compared with 2.5pc for the 2005 financial year.
The shares closed up 10 at 226p. The interim dividend, payable on April 3, is unchanged at 2p.
dont you just want to hate those music industry executives? should boycott EMI and Warner Music...
November 17, 2005
Apple Computer may blink after all on its dogged determination to keep its price per download for iTunes songs at an across-the-board $0.99.
The company that created the portable digital device sensation, the iPod, and the iTunes Music Store that drives it, may be about to give in to pressure from music publishers such as Warner Music Group and EMI Music.
In a story in Thursday’s Wall Street Journal, Alain Levy, chief executive of EMI, is quoted as saying that he discussed the issue with Apple CEO Steve Jobs and he believes that Apple plans to change its one-price policy. Apple wouldn't comment to RedHerring.com about the report.
According to the paper, Mr. Levy said the issue is not really whether Apple will introduce flexible pricing, but when it will do it.
Shares of Apple were down $0.28 to $64.67 in recent trading.
Back in September, Mr. Jobs blasted music industry executives, calling them greedy for pushing for an increase in the price of downloaded music, saying their demands, if met, would serve to encourage piracy.
Warner Music Group CEO Edgar Bronfman Jr. rose to the challenge, saying the single-price strategy was unfair to the music industry, the artists, and the consumer (see Bronfman Fires Back at Apple). He said the market should decide what music downloads should cost, not a single retailer like Cupertino, California-based Apple.
“Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past,” he said.
Mr. Bronfman said the digital music industry had become the only one that did not have flexible pricing. He could have pointed to the movie industry as a glaring exception to that rule. No matter which movie one attends at the multiplex, whether it’s a hit or a dog, it costs the same.
Sharing iPod Revenue
“We are selling our songs through iPod, but we don’t have a share of iPod’s revenue,” he said. “We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only.”
At the time Mr. Bronfman called for flexible pricing, Apple refused to respond to questions about the notion that superior or more popular music could be priced higher than $0.99. But according to Mr. Levy, Apple will relent in the next 12 months.
Sales of digital music have been growing in the last couple of years and now account for more than 5 percent of the global recorded music market. That is about three times the level of a year ago.
“There are some reports showing that single-track downloads in the U.S. are slowing, but we are also seeing full album downloads in the U.S. accelerating in growth,” said Eric Nicoli, chairman of EMI Group. “We are interested in digital distribution of every kind all over the world. We are interested in downloads, in subscription models, in legalized peer-to-peer, in every aspect of mobile distribution.”
EMI, which posted its six-month performance on Wednesday, said its digital sales grew by 142.4 percent to $76.5 million, representing 4.9 percent of total group revenues, up from 2.1 percent of the firm’s revenues in the prior year’s first half (see A Sour Note on File Sharing).
EMI wants a premium for star downloads
By Dominic White (Filed: 17/11/2005)
The price of downloading singles by hit artists such as Robbie Williams and Gorillaz is set to rise after EMI said it expected Apple's market-leading website iTunes to offer "differential pricing" within the next 12 months.
Alan Levy, chairman of EMI Music, said Apple's chief executive Steve Jobs had indicated in "intensive discussions" that he would be prepared to drop iTunes' flat-price model. Apple, which has 85pc of the global music market in legal downloads, charges a flat rate of 79p for a single in the UK, 79c in the US and €0.79 in Europe.
Robbie: worth more than 79p?
However, EMI and other music majors want it to charge more for big name acts and less for up-and-coming artists to reflect demand and maximise revenues from the fast-growing sector.
"First of all we would like to reduce pricing on new and developing artists and charge a premium for our superstars," said Mr Levy.
Eric Nicoli, the chairman of EMI Group, added: "This is not about raising prices. It's about getting the most effective charging structure."
Apple, which sells more than 1.8m songs a day on iTunes, refused to comment. Japan is the only market where iTunes charges more than one price for a single track.
EMI's comments came as it posted better-than-expected, first-half profits helped by albums from Coldplay, Gorillaz and the Rolling Stones. Underlying pre-tax profits rose 9pc to £41m from £37.6m, although reported pre-tax profits dropped to £32.6m from £54.8m, hit by lower financial exceptional net income. Turnover rose 5.8pc to £925m.
Mr Nicoli predicted a bumper Christmas, helped by Robbie Williams' new album Intensive Care. It has sold 3.5m units in its first three weeks, his fastest selling album since signing with EMI in 1996.
EMI's digital music sales grew 142pc year-on-year to represent almost 5pc of total revenue, compared with 2.5pc for the 2005 financial year.
The shares closed up 10 at 226p. The interim dividend, payable on April 3, is unchanged at 2p.
dont you just want to hate those music industry executives? should boycott EMI and Warner Music...