Recording companies ‘getting greedy’ says Apple boss |
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Thu, 22 Sep 2005 00:35
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CALIFORNIA: Apple boss Steve Jobs yesterday, effectively silenced record companies that insisted on raising the download price for iTunes. He said they were “getting a little greedy”.
The co-founder and CEO said some recording companies were demanding that Apple raise the 99-cent a song download price to $1.29. If Apple were to do that, a 12 song album would cost $15.50, almost the same as the price of a CD.
Jobs said it would be a self-defeating attempt as raising the price of downloads would spur piracy: finding no difference between the store price and the download price, people looking for cheaper options would turn towards illegal sources.
Apple’s iTunes are hugely popular because they save about $5 per album which, when multiplied by a number of albums a year, works out to considerable savings; the average young person is said to buy 10 -15 albums a year.
The current price of iTunes has also meant higher profit for recording companies as it involves no manufacturing, distribution or marketing costs. That sort of justifies Jobs’ accusation that recording companies that were pressuring Apple to raise download price were getting greedy.
Recording companies seek to get a bigger piece of the pie from the huge sales of songs online. So far, iTunes has sold over 500 million songs (82 percent of legal downloads) and 22 million iPod digital music players.
Among the recording companies that have raised the issue are Sony BMG and Warner Music Group. Having the upper hand, Apple last month launched its Japanese iTunes site without Sony BMG’s catalogue.
The rising popularity of iTunes also suggests people are gradually moving away from buying music at stores.
When contacted, neither of the recording companies offered any comment on the issue or on Jobs’ statement.
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