Music industry hits bottom. Starts digging.

So now the music industry wants a slice of the iPod sales because they say Apple should be giving variable pricing on the songs, rather than the flat 99 cents.

At an investors’ conference in New York, Warner Music Group CEO Edgar Bronfman Jr. said the price of downloaded songs should vary depending on the popularity of the songs and the artists. He called Apple’s across-the-board $0.99-per-song charge unfair.


"There’s no content that I know of that does not have variable pricing," said Mr. Bronfman at the Goldman Sachs Communacopia investor conference. "Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing."


Mr. Bronfman’s remarks came in response to Mr. Jobs’ statement on Tuesday blasting the music industry for pushing for an increase in the price of downloaded music, saying their demands, if met, would serve to encourage piracy, which has eaten into the industry’s profits.

Jobs is absolutely correct. This is recording industry greed, pure and simple. The idea that the "base" price for a song’s creation comes in at a list price of 99 cents is bullshit. I’m no expert, but I’d be willing to bet that if you calculated the real price a song creates to produce (including all related costs), you’d come out at something much lower than 99 cents.

Bronfman said:

"To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer,” said Mr. Bronfman. “Some songs should be $0.99 and some songs should be more. I don’t want to give anyone the impression that $0.99 is a thing of the past."


How in the world is it "appropriate" for me to pay more for a song? And oh! – the market IS deciding! Just because you’re not listening doesn’t mean the market (i.e. those pesky consumers) isn’t voicing its desires.

"We have to keep thinking how we are going to monetize our product for our shareholders," added Mr. Bronfman. "We are the arms supplier in the device wars between Samsung, Sony, Apple, and others."

Arms suppliers – nice analogy, considering the arms suppliers are usually heartless, greedy bastards who would sell their grandmother for a dollar and supply the highest bidder. Funny he says something like this while Lord of War is in theaters. But you know who suffers the most from a "war"? The non-combatants.

Here’s the best part though – Bronfman isn’t just upset that he’s not getting enough off of sales via Apple.

The satellite radio industry also came in for some rough treatment from Mr. Bronfman, who believes the old contracts the music industry signed with the two major satellite radio outlets have run their course and should be taken before an arbitrator.


"It’s now time for satellite radio to pay. We gave them a seven-year license at vastly below-market rate to allow that business model to occur," he said. "There is no reason for their content cost to be one-tenth of what everyone else is paying and have this done on the backs of the music industry while they pay market rate to the NFL, Howard Stern, and Major League Baseball."


Sirius Satellite Radio has paid a reported $500 million to secure the services of the self-styled "king of all media," Howard Stern. And both XM and Sirius have announced a number of multimillion-dollar sports broadcast contracts.

So now that the satellite radio channels are making money, he’s upset that his original contract wasn’t greedy enough. He wants to break his contract because he underestimated their success and overestimated the contract terms. You think if XM and Sirius had not done well, he would have been happy to renegotiate their contracts? Yeah, I don’t think so either.


For information about my Community Consulting, Training and Speaker services, or to find out more about Dinner5, my unique community for community builders, contact me today.

By submitting this form, you are consenting to receive marketing emails from: Jake McKee Consulting, 9908 China Garden Cove, Austin, TX, 78730, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe┬« link, found at the bottom of every email. Emails are serviced by Constant Contact