Music Industry Aims At Foot -- Again
It's amazing that an industry this large and this profitable can be this dumb. But then I think back to the Napster days and realize that not only should I not be amazed, I should have expected them to try and screw up the huge success of iTunes.
Now, I'm not a big fan of the "industry" in general, but I tend to be even less of a fan of the "analysts" around the computer and music industry. Which does leave me truly shocked to see an analyst utter something so plain and simple.
Some analysts suggest that the willingness of the music companies to gamble on a new pricing structure reflects a short memory.
"As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them," said Mike McGuire, an analyst at Gartner G2. "It'd be rather silly to try to destabilize [Jobs] because iTunes is one of the few bright spots in the industry right now. He's got something that's working."
Ya think? These clowns get the tiniest whiff of potentially larger short-term profits and they are already scheming how to destroy long term plans for another shiny penny today. Can some group of people who depend on these executives to protect the value of their investment in these companies please fire them?
Although, to be fair, it isn't all of them marching off the shiny penny cliff.
"I don't think it's time yet," said Jimmy Iovine, the chairman of Interscope Records, Universal's biggest division. "We need to convert a lot more people to the habit of buying music online. I don't think a way to convert more people is to raise the price. (emphasis mine)
Keep prices low to get more buyers? Brilliant!
Oh...but it gets better.
A sore point for some music executives is the fact that Apple generates much more money selling iPod players than it does as a digital music retailer, leading to complaints that Mr. Jobs is profiting more from tracks downloaded to fill the 21 million iPods sold so far than are the labels that produced the recordings.
Wow. What utter stupidity is this? That was Apple's plan from the beginning.
Apple Chief Financial Officer Fred Anderson said in July (2003) that the music store could be a "trojan horse" for getting more people to buy iPods.
I can't find the exact numbers, as I don't think they are actually published, but quite a large percentage of each $0.99 goes to the label. Apple is keeping pennies and paying for the infrastructure with iPod sales basically. Apple creates the store, makes it easy, and sells the most popular music player on the planet. What more do they want? Ah yes, more shiny pennies. They don't think they are getting what they should be.
I just wonder how many feet they have left.
