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Napster UK launches - stupidity abounds within the music industry

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Subject:  Napster UK launches - stupidity abounds within the music industry
Author:   johnnyh:   view profile | all posts by this author | add to favourites
Date:   13:45:17 20 May 2004
 
Is it just me or is everyone else suitably loathing of the music industry's pathetic attempts to further their strategy of screwing consumers?

At £1.09 PER TRACK, Napster UK, which has just launched today (www.napster.co.uk), has surely got it all wrong. Remember that this is NAPSTER, the black-eyed industry-shafting bunch that is all of a sudden making up for its earlier 'free' model by ripping of UK consumers. And Europeans. And Americans (but not as badly).

There will obviously be some sort of user base by the end of the year - my question is whether these people are clinically short of a few shillings? Well, given that they will be paying £1.09 per track, they aren't short in the fiscal department, but is there anyone home upstairs?

For years we have seen CD prices rise and rise - £17 isn't uncommon for certain artists nowadays, though thanks to the likes of CD Wow and Amazon (which offer the latest albums for about £9), offline retailers are having to compete a little more for business.

We have heard all the tales of consumer revolt as the tabloids went crazy about comparative CD prices in the US - something like £7 for a new CD. Then there's the exchange rates... the UK holidaymaker can pick up bargains galore these days.

Yet when we strip out the whole process of making a CD, which is after all a real product involving paper and plastics and metals and printing and so on. There is a cost to making each and every CD, unlike the virtually-zero cost of providing these files to the online distributors, in digital format.

The record labels own the manufacturing plants and the labelling/packaging plants. Maybe they don't want a digital distribution model, lest they be forced into closing these plants down. But surely digital is cost effective and the rise of the on-demand model for entertainment products is a no-brainer for the record companies to get into.

But hey ho, they actually RAISE the price of tracks in the UK (compared to the US). OD2 charges 99p per track - again, total industry rip-off tactics that do nothing for the consumer. At least we might see some price competition, but I for one won't touch these services until pricing better reflects true worth.

If a CD sells on Amazon for £9, and if Amazon and everyone else can make a little margin on this (given the offline distribution model and manufacturing/packaging etc - ie lots more costs), then how are consumers expected to swallow £1.09 per track? I don't get it.

Except I do. This is proof positive that the reocrd companies are still locked in the Dark Ages, that they are sitting comfortably and that they do not want to change the status quo.

They will accomodate a digital music industry, but only if it doesn't damage the offline model. How much profit do you get from £1.09 per track? Where does it all go? How much will Napster/OD2 see?

Is this just one big price fix, with the industry at large agreeing cartel-style to a minimum price per track ie £1? Maybe Napster takes the other 9p? Of that £1, how much is cost and how much is profit? Compare that to the costs of producing and distributing a CD... how does it add up?

It sucks, but will we see any action from the powers that be? Probably not - the best we can hope for is that consumers recognise these prices as disgraceful and ignore the Napsters of this world until the record industry gets wise.

It would be very interesting to learn how many extra music lovers would buy into these services if the price per track was halved. My bet is that there would be a significant uplift in numbers. I'd pay 50p many times over for my favourite songs. I reckon they'd sell at least twice as many songs, maybe ten times as many. The price would be so much more appealling, more digital music players would be sold, the industry would accelerate... but what would the effects be on CD sales?

It is a curious conundrum and no-one will know the outcome unless someone tries it. But who will, who can? It just looks more and more like the record industry has the digital distribution market all sewn up, and these initiatives are merely a way of keeping price levels intact.

Pathetic.
 
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