EMI, Apple, And The Premium Cost Conundrum
by
on April 03, 2007,
What is the agreed-upon value of a digital download by nearly all involved with music distribution? Ninety-nine cents. So what is EMI’s reasoning in asking the consumers of their digital downloads to pay a 30% premium for 256kbps, DRM-free tracks on iTunes?
I think I can sum it up in three words. Because. They’re. Afraid. The majority of the music industry’s controllers are averse to change. They hate it. They want to keep things the way they are, and they just want consumers to want those things (and more of it) every successive financial quarter. Except consumers don’t like the way things are. Who wants to buy something they don’t like?
99-cents per track isn’t a bad idea. It’s a fine idea. A buck per single. It works. $1.30? That’s not so hot. That reminds lots of people to check their wallets or their available credit before going to the checkout counter. It makes people hesitate. Usually sellers don’t want buyers to hesitate. They don’t want buyers to think. They want buyers to buy.
Premium pricing, which this clearly is, should be affixed to a premium product. But the tracks to be presented with the approval of EMI by Apple’s iTunes store (and similar services) aren’t worth $1.30. Count an average of ten tracks per album at that cost, and you’re in CD territory. What the buyer of the premium tracks receives is not equivalent to what one receives with a CD, however.
CDs hold digital music of much greater quality than AAC-encoded tunes each with a 256kb bit rate. To explain why that is is a complicated matter. But to get to the nuts and bolts about it, files present on a CD are far larger than those of iTunes AAC encoding, 128kb or 256kb. AAC files are highly compressed, and thus, the quality present in the original recording degenerates with compression. The way in which files are compressed can mean a good-sounding track or a bad-sounding track, but nothing that is offered by the major digital download stores is great. Therefore, less-than-CD-quality music should cost less than CDs.
But that’s not the biggest problem with the $1.30 price point. The main issue raised by EMI’s decision has to do with DRM. If EMI asks more of the consumer for DRM-free music, they only emphasize the point the music industry as a whole has been making: We (the consumers) are crooks, and because we intend to steal the unprotected stuff more so than we do DRM-laden downloads, the consumers who do pay for the music must bear the added burden of financing the illicit activity.
That’s a message that falls flat with the proponents of fair use and fair value because you get one (fair use) without the other (fair value). A compromise must still be made. And I for one think that compromise isn’t worth any premium whatsoever. Do you?
