How much is an iTunes download worth?
Posted May 19th 2008 3:00PM by Erica Sadun
Filed under: iPod Family, iTS, iPhone
How much is an iTunes download worth? About 70 cents, if conventional wisdom is correct. That's the commonly quoted number for the iTunes money that gets passed back to the record labels. And according to the New York Times today, the record labels are
angling for more. They argue that broadband music sales through the mobile iTunes store somehow should bring them a greater profit than sales through the standard iTS, pointing to industry practice for ringtone and ringback sales.
I don't quite understand their reasoning. I think most phone-based ringtone sales are outrageously overpriced. Increased sales volumes will benefit the labels even at the current wholesale prices. Ah well, another example of Underwear Gnome economics in action.
Tags: Economics, Profit, Record Labels, RecordLabels, RIAA, Underwear Gnomes, UnderwearGnomes, Wholesale
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Reader Comments (Page 1 of 2)
5-19-2008 @ 3:04PM
shaun said...
americans get it cheaper than we do in the UK. I know it's all relative with tax and stuff but still
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6-09-2008 @ 3:28PM
tony Raso said...
I say it's worth nothing, as you cannot sell your digital rights to music to another individual. At least I don't think you can)
5-19-2008 @ 3:18PM
totoro said...
1) I too, think ringtones are outrageously overpriced.
2) Obviously, not everyone does, since the market seems to have thrived at those price points. If people are willing to pay, I don't see the problem. (Since ringtones are completely frivolous/unnecessary/etc., letting the free market decide on the price seems totally fair, despite #1, above.)
3) I'm happy the ringtones for the iPhone are free :)
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5-19-2008 @ 3:22PM
Aron T said...
I have never and will never pay for a ringtone. If I purchased the song I should be able to do whatever I want to it as long as I don't distribute the song or the derivative work.
RIAA et. al can bite my shiny metal hind-quarters if they think they can treat me like a criminal and then cry for money for the pleasure.
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5-19-2008 @ 3:27PM
Fernando said...
RIAA = Racketeering Innocent Americans All the time.
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5-19-2008 @ 3:31PM
murph said...
oh yeah, that argument makes lots of sense. Apple has to code another application, suck up a bunch of bandwidth from their partner ATT, all while the music industry sits on it's large rear-end and collects bigger checks. riiiiiiiiiiight.
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5-19-2008 @ 3:31PM
Nay said...
I remember working for a cell service provider and i showed my boss how easy it was for me to make a custom ringtone and put it on almost any phone. The bastard wanted me to charge 5 bucks for it. Hey, I believe in making money but I felt it was just downright ripping pple off. I never did charge pple for the ringtones. Explains why I'm not working there today either ^_^ The cellphone industry is corrupt.
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5-19-2008 @ 5:13PM
Ed said...
Ha, I read pple as Apple the first two times I read your comment.
And, Cell providers will always be corrupt. Four companies control a market which nearly everyone uses, and they do what they want. People accept the corruption because they need their cells. Apple's got them by the balls, though, because everybody wants the iPhone and every carrier will bend over backwards to get it if given the opportunity. (See visual voicemail, etc.)
5-21-2008 @ 9:58PM
mabhatter said...
Add to that corruption the near 100% lock on the market for buying things via cell phone and the RIAA just wants Apple to play "fair" like everybody else.
One side note was on /. a while ago was that the RIAA got ringtones declared "not" a new work... so they don't have to pay an artist royalty per tune sold... Ringbacks/ringtones/etc are 100% cash to those companies and there's no way they'll let Apple pee in their pool on this one.
5-19-2008 @ 3:35PM
Niklas said...
I will never pay for a ringtone, however, I do not experience the iTunes prices as high. Paying less than $1 per song is well worth it when it comes to good music. The people complaining about that price being too high might want to reconsider their own taste in music as the music the listen to is worth essentially nothing to their ears.
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5-19-2008 @ 3:42PM
Fernando said...
I agree 100% and not only is that true but also these so called "musicians" that complain are the one's putting out garbage music in the first place. They'll have one "hit" single on the album and these suckers go out and buy the whole thing for $12-$15 and they laugh all the way to the bank.
5-19-2008 @ 3:52PM
Blaktornado said...
I dunno but I'm for the increase in price on iTunes... mainly because my album is on there through tunecore, so if prices go up then hopefully I'll get some more moneys ;) lol.
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5-19-2008 @ 4:09PM
artifex said...
I can understand why they want to charge, because they're working from the model where public performance rights cost more money than private rights. Eventually it's the model that will have to change, because we keep finding new uses for this content that blur all those old lines.
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5-19-2008 @ 4:18PM
Tiim said...
In Germany we pay 0.99€. This is 1,54$. :(
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5-19-2008 @ 4:29PM
coasterjob said...
"They argue that broadband music sales through the mobile iTunes store somehow should bring them a greater profit than sales through the standard iTS, pointing to industry practice for ringtone and ringback sales." Well then good for Apple for telling them no. So IF I use my iPhone to buy an album using the built-in app, I should pay a premium? riiight.
So Amazon should charge more for me buying through AmazonMobile??
Shame on us as consumers for allowing this shite to get this far. A song is a song, if it's worth $0.99 from my home computer, then it's worth $0.99 from my iPhone or whatever....
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5-19-2008 @ 4:31PM
Jamus said...
Cell phone carrier greed will try to push iPhone purchase tracks to at least $1.50 is my guess.
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5-19-2008 @ 4:34PM
What the Frack?! said...
This web site is getting fun.
Gnomes...
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5-19-2008 @ 4:36PM
Scott said...
If they're gonna cost more it should be because they're using up additional AT&T bandwith...not because somehow the music is worth more because it's being downloaded via cellphone. You'd think they'd want as many venues for people to download their product... but instead they want to charge a premium for something that will, for the most part, be an impulse buy... they should be happy for any impulsing buying you can get!
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5-19-2008 @ 4:47PM
Josh said...
This is the reason Reznor is god. He's realized what the consumers all did years ago and is putting all of our thoughts into action. The RIAA should be glad it is getting what it is when the economy is so bad. They're idiots.
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5-19-2008 @ 5:09PM
Ethan said...
They're getting a way better deal than in stores. And if I've bought the right to play it, I should be able to do so on my phone, it's not like I'm broadcasting. And that right isn't worth any more if all that changes if the networking (3G).
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