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August 28, 2008

itunes_store

Some major bands shun iTunes

Posted Aug. 28, ’08, 10:29 AM PT by Cyrus Farivar
Category | iTunes » iTunes Store

albumsales.jpgWhile iTunes is still on top of the music retail market, there remain some major bands that seem to believe that by not being on iTunes, they can make more money than they otherwise would. Huh?

Here’s the “logic”, from the WSJ:

Apple isn’t willing to sell songs for more than 99 cents. Most record labels see higher prices as critical to increasing revenue. But no other online music store has been able to mount a serious challenge to iTunes. Apple keeps about 30% of the price of each music sale, whether it’s a 99-cent track or a $10 album, according to people in the music industry. Apple has said it makes little profit from iTunes because of the costs of running the online store.

Irving Azoff, the manager of numerous high-profile acts including the Eagles, says that a few years ago he presented the band with a financial analysis showing that their royalties to date from iTunes sales were far lower than anyone expected.

Now I’m no music executive, but my guess is that bands make the bulk of their money not from album sales, but rather from merchandise and especially concerts. If you already have an album that’s out in CD format, it would seem that it can only help you to have it available on iTunes as well. After all, it costs nothing to sell 10,000 more digital versions, right? So isn’t that then just pure profit?

Frankly, the album is dead, as the WSJ succinctly (and dryly) puts it:

Shunning iTunes carries risks for the labels. Not only is it the biggest force in music sales, but keeping songs off the service could prompt listeners to look for illegal downloads instead. In addition, customers have demonstrated a clear preference for buying singles instead of entire albums. Only in a few cases have record labels been able to boost album sales over those of individual songs.

“This is a last gasp for the album format,” says Aram Sinnreich, a media professor at New York University, who says most albums have only one or two good songs surrounded by little more than “filler material.”

Music execs? Bands? Get over it.


6 Comments

DJ Ren said:

How about increasing quantity of sales as a way to increase revenue rather than increasing price to increase revenue? I don't have an MBA, but this seems more logical to me. How much more music would you buy if songs were only $0.49? Double is my answer.

August 28, 2008 11:10 AM
The Gabe said:

It appears that the scum in the music industry better figure out a new scam.

August 28, 2008 11:21 AM
hardonyou said:

I don't download music from itunes, tons of other stuff but I'm one of THOSE people who can't stand to the quality of downloaded AAC or MP3's. That being said I use itunes to discover music, then I buy the CD. I know I'm not alone. Also wouldn't it behoove the music industry to have as many legal ways to obtain their content as possible to mitigate their slumping sales?

August 28, 2008 12:39 PM
Mark Eagleton said:

I am an artist with music for sale in the iTunes store, Amazon, Napster, eMusic, etc.. The 70% I get from iTunes sales is substantially more than any other digital distribution service. $7 of $10 is much less than $15 of $20 dollars, which is what record companies make from CD sales. Artists with record contracts usually average $1/CD sale.

Don't sell your soul to a record company and iTunes is a gold mine.

August 28, 2008 4:56 PM
Wondercow Author Profile Page said:

Under what name Mark? I did a search for "Mark Eagleton" but it came up empty.

August 29, 2008 2:01 AM
Dave-O said:

@Wondercow, follow the link. His band would be the Bottom Dwellers.

August 30, 2008 11:20 AM

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