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Record Companies Screwing Consumers Again


Apple seems to have lost its fight with the record companies over the $9.99 uniform pricing policy in the iTunes music store: the new Eminem greatest hits collection, posted online today, is selling for $14.99.

Some context: When Apple opened its music store, it announced that all songs would each cost 99 cents, and entire albums would cost $9.99. Desperate for some legit online music venue that would save them from piracy, the record companies agreed. But ever since iTunes became a huge hit, the record companies have been getting greedy. (What a surprise.) They've been pushing for what they call "variable pricing," which they define as the ability to raise prices on some records while lowering them on others. In practice, this means that the record companies will raise prices on some albums, while lowering prices on none.

(Remember that it was the practice of the record companies to charge the most for older compact discs by artists like The Beatles and Neil Young, despite the fact that virtually all the production costs on such albums had already been incurred, apparently on the theory that Baby Boomers would happily pay the higher prices. Which, among other things, meant that young people who wanted that music either wouldn't buy it or would steal it, which is one reason artists felt compelled to sell out to Cadillac, etc., in order to feel that their music was still relevant.)

So a couple of weeks ago, along came Madonna's new album at $12.99, and here's Eminem at $14.99—for a greatest hits album. Which is to say, an album that has no production costs whatsoever. Pure profit.

This is fascinating and depressing: These prices are about what the physical cd's would have cost in the days before iTunes existed. Which means that the record companies will have eliminated all their packaging and distribution costs, but are charging essentially the same price for their albums.

Meantime, I've yet to find any prices of iTunes albums that are actually lower than the former top price of $9.99.

No wonder it's hard to take the record companies seriously as they bitch and moan about the state of their business. And no wonder people steal music.