Under The Microscope

The Rumble In The Virtual Jungle

In this corner, weighing in at over half a billion downloads, the iTunes Music Store. The iTunes Music Store will be represented by Mr. Steven P. Jobs, CEO of Apple Computer, Inc., wearing the black turtleneck and black trunks.  
  And in this corner, wearing the red tie and matching trunks, Mr. Edgar J. Bronfman. Mr. Bronfman is CEO of Warner Music Group, and today represents the recording industry.
Let’s Get Ready To Ruuummmmble!

For a couple of weeks now, there’s been a battle growing in the public eye between Apple and CEO Steve Jobs and various music companies about prices in the iTunes Music Store. The iTMS’s pricing model has no doubt been debated since before it even opened its doors, but until recently the argument was mostly private.

Now the debate is becoming increasingly public, as Apple and various members of the music industry duke it out in the media. Steve Jobs has called the music companies “greedy” for wanting to raise prices. Warner Music Group thinks Apple’s pricing policy is “unfair”. They both make good arguments. Apple says that any increase will drive users back to piracy. The RIAA says that other products get varying prices, and music should too.

Really, it feels like I’m watching my parents argue about me while I’m standing right there in the room. Not only have Apple and the music industry ceased to make any effort to hide their internal dispute, if they had ever tried in the first place, but they seem to be actively enjoying their publicized debate. And yet, despite strongly pushing their arguments before the public eye, they barely acknowledge that the public even exists. Warner Music Group’s CEO said:

“That’s not to say we want to raise prices across the board or that we don’t believe in a 99-cent price point for most music. But there are some songs for which consumers would be willing to pay more. And some we’d be willing to sell for less.” (Source)

This is about as close as they come to acknowledging that customers matter at all. And the only way he considers that they matter is in determining just how much cash they can be convinced to hand over for the latest Britney Spears track. He then later says, seemingly ending the idea of less expensive songs:

“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.” (Source)

However, Apple isn’t doing much better. While stating that the buying process should be simple and declaring that raising prices will drive customers away, Jobs is still happily talking about us but never to us, despite the fact that millions of customers will read every word of it.

“We’re trying to compete with piracy, we’re trying to pull people away from piracy and say, ‘You can buy these songs legally for a fair price,'” he said during a press conference in Paris ahead of the opening of Apple Expo. “But if the price goes up a lot, they’ll go back to piracy. Then everybody loses.” (Source)

So why doesn’t anybody ask us what we want? While our dysfunctional, acronymic parents iTMS and RIAA are busy arguing about our fate, you’d think they’d at least find out what we think about the whole thing. Of course, we all know what customers really want, “What they want is better products for free.” (Thanks, Dilbert.) Maybe that’s not the best idea, but at the very least they could acknowledge that their customers exist and it is they who will ultimately determine the success or failure of whatever pricing structure they decide on.

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