p2pnet.net News:- On Amazon, N.E.R.D.’s Fly or Die will set you back $13.49. Thirty-nine ‘used and new’ from $8.98 (April 8). List Price:$18.98

Apparently, iTunes Music Store wants $16.99 for for FoD, and Roxio’s Napster II is trying to knock it out for $13.99.

Or you can get Fly or Die from your friendly, local p2p network, gratis, no problem.

So what’s special about FoD?

Not much – it’s just the example the Wall Street Journal’s Ethan Smith chose to illustrate several interesting points he makes in his report Downloading music gets more expensive.

“The same pricing shifts are showing up on albums by a growing slate of artists, from Shakira to Bob Dylan,” says Smith, going on:

“Unburdened by manufacturing and distribution costs, online music was supposed to usher in a new era of inexpensive, easy-to-access music for consumers. In many cases, buying music online is still cheaper than shopping for CDs at retail outlets. But just a year after iTunes debuted with its 99-cent songs and mostly $9.99 albums, that affordable and straightforward pricing structure is already under pressure.

“All five of the major music companies are discussing ways to boost the price of single-song downloads on hot releases – to anywhere from $1.25 to as much as $2.49. It isn’t clear how or when such a price hike would take place, and it could still be months away. Sales of such singles – prices have remained at 99 cents – still account for the majority of online music sales.

“The industry is also mulling other ways to charge more for online singles. One option under consideration is bundling hit songs with less-desirable tracks. Another possibility is charging more for a single track if it is available online before the broader release of the entire album from which it is taken. There is also talk of lowering the price on some individual tracks from older albums. Several record-company executives acknowledged that pricing changes are being discussed at all five major companies.”

Oh really?

Well, you know how the labels are bragging that online sales are hot, even though they’re not?

When Apple sales hit 50 million, the mainstream media went nuts. FIFTY MILLION!

wow

And, says the report, “The new pricing developments come as digital-music sales are growing steadily. Some 25 million digital tracks were sold in the first three months of this year, versus 19.2 million for all of the second half of last year, according to Nielsen SoundScan.”

In the real online world, at any given moment, four million (4,000,000) simultaneous users are logged on to p2p networks and as many as one BILLION (1,000,000,000) files are shared every month.

But instead of trying to decide the most effective way to tap this amazing potential market, “Most music-company executives believe that the download market is still in a critical early-growth stage, which could be disrupted by raising prices.

“For us right now the issue is not, ‘Do we make another $300,000 by raising the price five cents?”‘ a music company executive is quoted as saying. “It’s making sure the market grows.”

Making sure it grows? What planet are these guys on?

“Revenues in the music industry have been dragging in recent years, in part because of the rise of illegal downloading services,” says Smith. “Prices could spur additional illicit downloading. Weaning people off those illegal services by giving them an alternative that they consider viable is critical to the industry’s future profitability.”

One of the reasons most often cited for downloading is: you can find rare items on a network that you’ll find nowhere else.

So, adds Smith, “The issue of online music prices raises philosophical debates for music executives …

“… Some executives, for example, believe they should be charging a premium for the online versions of older tracks because consumers may be willing to pay more for harder-to-find material.”

This entry was posted on Friday, April 9th, 2004 at 5:32 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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