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February 28, 2005

Greed, music and piracy

From the Financial Times:

Some leading music labels are in talks with online retailers to raise wholesale prices for digital music downloads in an attempt to capitalise on burgeoning demand for legal online music.

The moves, which suggest the labels want a bigger slice of the fledgling market's spoils, has angered Steve Jobs, the Apple Computer chief executive behind the iTunes online music store.

But music executives expressed caution about their ability to push through unilateral price increases. Among the biggest groups, Universal Music and Sony BMG are known to be particularly reluctant to disrupt the market for downloads.

One top label said it would not raise wholesale prices now because the market was not yet mature enough for an increase. The three other music labels - which also include EMI and Warner - refused to comment.

Analysts, meanwhile, are warning that price rises could exacerbate internet piracy, which is thought to cost the industry about $2.4bn (£1.2bn) a year.

Music industry executives said introductory wholesale prices for digital tracks had been set low to stimulate demand, but Apple's success had prompted concern that they may now be too low.

Just can't let a good thing alone, can they. Downloading “pirated” music remains as easy as it always has. The profits these companies make are solely depending on the morality of their customer base. (Ironic that one of the top purveyors of immorality is dependant of the moral actions of it's customers). Raising prices will simply cause more people to download the free stuff rather than buy the higher prices stuff. Others (like me) will simply choose to not purchase music at the higher price.

Posted by Jack Lewis at February 28, 2005 08:45 AM

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