For a Song: The Price War Begins

Written by Eric Olsen
Published May 29, 2003

Listen.com reduces online song price to $.79:

    Listen.com, which offers Internet radio broadcasts and other programming for $9.95 a month, is lowering the price for burning digital music onto compact discs to 79 cents per song, the company said Wednesday.

    The move comes just one month after Apple Computer Inc. launched an online music store, in which Macintosh users can download a song for 99 cents with few restrictions - and no monthly subscription fee.

    ...."We're starting to see the business model experiments," said Michael McGuire, an analyst with Gartner G2.

    ....The company decided on the 79-cent price after a six-week experiment, in which Listen.com charged 49 cents per song, chief executive Sean Ryan said. The move attracted more subscribers and boosted song downloading, although he declined to reveal figures.

    Listen.com may allow customers to burn songs for a fee without buying a monthly subscription, Ryan said, calling 2003 "the year to test business models." [AP]

Let me know when there are 500,000 songs available for under $.50 each and no subscription fee or usage restrictions.

Career media professional Eric Olsen is honored to be the founder and publisher of Blogcritics.org, which, quite frankly, rules - as do his wife and four children.
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For a Song: The Price War Begins
Published: May 29, 2003
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Filed Under: Sci/Tech: Internet, Music: News
Writer: Eric Olsen
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Comments

#1 — May 29, 2003 @ 11:57AM — Tom Johnson [URL]

I agree - even 79 cents is too high a price for a compressed audio file. Offer SHNs, FLAC, APE, or something else that is lossless and I'll jump at the chance. But I simply will not pay for compressed audio.

#2 — May 29, 2003 @ 12:29PM — Phillip Winn [URL]

Uh-oh, Tom. I hope you don't watch DVDs (lossy MPEG compression). For that matter, I'd be interested in hearing your reactions after observing many modern recording sessions, in which the sound is tweaked and compressed and twisted in all manner of ways before it ever even gets mastered. Not always, of course, but I think you might be surprised. Still, Napster proved that most people do want compressed audio.

Anyway, I'll get back on-topic. Let's do the math:
$9.95/month + $.79/track for Listen.com, or $0/month + $.99/track for iTMS. Since I'm saving $.20/track, but I'm paying $9.95 for the privilege, how many times do I have to save $.20 to pay for the $9.95? I'll tell you: 49.75 times.

So if you download 50 tracks per month, Listen.com is a better deal financially. If you download less than 50 track every month, iTMS is a better deal. But there are still more obstacles to Rhapsody bliss. If you're a member, you can browse the selection and see for yourself that a lot of tracks simply aren't downloadable. I have seen estimates that only about 2/3 of the tracks are burnable, which puts quite a crimp in things, too.

Don't forget Apple's album prices, too. I just bought Live's 13-track Birds Of Pray album for $9.99, which works out $.77/track, cheaper than Rhapsody. I noticed last night that the Cranberries' 74-track Treasure Box was selling for something like $34.99 (I think, don't quote me) on iTMS, which is less than $.49/track.

Of course, you get more from Rhapsody than just downloadable tracks, but all of that disappears the first month you don't pay for it. That might appeal to some people, but obviously not many since they claim only "tens of thousands" of paid subscribers.

And of course, the iTMS is so far only available to Mac users.

For those who prefer to have the math spelled out for them, here are a couple of comparisons:

1 Track:
Rhapsody: $10.74 (9.95 + .79)
iTMS: $ .99 (0.00 + .99)
12 Tracks:
Rhapsody: $19.43 (9.95 + 9.48)
iTMS: $11.88 (0.00 + 11.88) (or less, if an album)
25 Tracks:
Rhapsody: $29.70 (9.95 + 19.75)
iTMS: $24.75 (0.00 + 24.75) (or less, if albums)
50 Tracks:
Rhapsody: $49.45 (9.95 + 39.50)
iTMS: $49.50 (0.00 + 49.50) (or less, if albums)
75 Tracks:
Rhapsody: $69.20 (9.95 + 59.25)
iTMS: $74.25 (0.00 + 74.25) (or less, if albums)


And remember, this is every month. As an emusic.com and netflix.com subscriber, I can tell you that something has to be a really good deal for one month, because there will always be some months you download or rent nothing at all, and that skew the average pretty darn quickly.

Ah well, I could spend all day talking about how nobody seems to really get it yet, but I'm probably preaching to the choir.

#3 — May 29, 2003 @ 13:11PM — Mark Saleski [URL]

what's all this stuff about being able to burn (or not) tracks?

if it's coming out of your speakers, you can snag it...with things like Total Recorder.

...unless the Rhapsody folks are smarter than we think.

#4 — May 29, 2003 @ 13:22PM — Phillip Winn [URL]

Yeah, things like Total Recorder work, but they don't exactly provide the comfort and ease of use that services like the iTMS do, so most people don't/can't use them.

#5 — May 29, 2003 @ 14:42PM — Phillip Winn [URL]

From home, I checked. The Treasure Box For Boys And Girls contains 74 songs and sells through iTMS for $39.96. That's $.54/track. Not quite as low as I thought, but considerably better than $.79/track from Rhapsody.

It's $53.99 on Amazon, or $.73/track. Wow, it's cheaper to buy the physical disc than to download it from Rhapsody!

Okay, okay, I know that this is probably a wild exception. But any album that Apple sells for $9.99 that has 13 or more tracks is a better deal from iTMS even without considering the $9.95 monthly fee Rhapsody charges you for the privilege of buying from them.

There I go not being fair again. Darnit!

#6 — May 30, 2003 @ 00:32AM — Tom Johnson [URL]

Well, Phillip, Napster proved that people want *free* music, not necessarily compressed audio. (And all iTunes has done so far is sell a lot in its early days. Give it a year and see if it's still selling any significant numbers. I bet it won't be.)

All audio is compressed - it has to be in order to fit onto the media of choice. DVDs are a step UP from video, not a step down, as mp3s are from CDs. The problem with MP3 is that it severely compresses audio to the point where it affects the playback - I can hear mp3-sourced material, especially if it has been decoded back to wav. If all you do is listen to music on tinny computer speakers, mp3s are fine. But anywhere else mp3s sound very compressed. I won't pay for it, and neither should anyone else. Pay for it when they've set a standard that is a step UP from where we are now, not a step back down to the digital equivalent of the cassette. If this turns out to be a success, it will be a significant step back for music, which has been striving to become clearer and better for decades now. Why have we bothered to make all these wonderful, clear digital recordings only to compress the hell out of them so you can download them quickly? And I'm not talking about the compression that is applied to the actual audio used to make music, which you refer to, I'm talking about post-production. This is like paying a photographer to take pictures of you not with his super-high quality digital or film camera but with a cheap throwaway Kodak, and getting only PhotoCDs full of 4x6" 72dpi images in return. That's a pretty crappy deal, isn't it?

#7 — May 30, 2003 @ 08:42AM — Phillip Winn [URL]

Tom - I'm fully aware of everything you say. But you must be able to scroll up a little and see that I was responding to your specific point: "But I simply will not pay for compressed audio." Like I said - take a look around a modern recording studio and count the compressors used.

Napster was free, yes, but it was also compressed audio, and you specifically said you wouldn't take anything lossy. Apparently the majority of people disagree.

DVDs are a step up from video, and also a step up from laserdisc, which is actually what I said. And yet when DVD was introduced, lots of laserdisc owners said that they would never pay for compressed video and audio. Laserdiscs, you see, were uncompressed. DVDs are lossy, and yet the overall experiences is better for a variety of reasons, not the least of which is that you don't have to manually flip the darn discs every half hour!

Your new argument (slightly changed from your original post) has to do with MP3. I fail to see the relevance, since the iTMS doesn't use MP3. I've done my own tests with MP3s at 128Kb (ugh), 160Kb (okay, but noticeable) and 192Kb (just about right), as well as AAC files (which iTMS uses) at 128Kb and 160Kb, and the AAC files are much more difficult to distinguish from the original.

I don't listen on "tinny computer speakers," but on a combination of a decent pro-speaker/iSub setup on my Mac, a nice home system, and my vehicles. I might be able to tell the difference in some cases - maybe - but I wouldn't call it anything like a cassette quality.

I heard all of this same crap when CDs came out too. A friend who owns a high-end stereo shop mocked CDs and declared that vinyl would never die. He now sells lots and lots of CDs to people who spend no less than 100K on a home stereo, and very few turntables. Was that a step backward? Hardly. It's a debatable point, but not to anyone using an objective standard.

You don't want to use iTMS, even though you've never heard how they sound. Fine. Obviously with 1% of computer owners buying 3 million songs in 30 days, you are in the minority. Maybe if you ever sit through a blind test on quality equipment, you'll be pleasantly surprised.

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