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iTunes Now Bigger Record Store Than Target, Amazon, Sam Goody

6/25/07, 3:41 pm EST


It’s a good week to be Steve Jobs: All the world is atwitter about Apple’s iPhone, which hits stores Friday, and now comes news that the iTunes Music Store has become the country’s third biggest music retailer. The digital-music superstore jumped over Target and Amazon.com and accounted for 9.8 percent of all music sales in the first quarter of 2007. Wal-Mart is the top dog, with 15.8 percent of the market, and Best Buy is next, with 13.8. (The NPD Group, a research firm that released the figures, counted 12 digital singles as an album to evenly compare digital stores to CD retailers.)

One more reason it’s good to be Steve Jobs: The second-biggest digital-music retailer behind iTunes, eMusic, – which sells unprotected mp3s from indie-label artists for as little as 25 cents a track – is trying to whip up some press by offering the Apple boss a subscription to the service. “We know Steve Jobs loves music,” eMusic CEO David Pakman said in a press release announcing the offer. “All Steve has to do is call me up from his iPhone and I’ll get him a free lifetime pass.” Don’t hold your breath, Dave.


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Comments

merik | 9/2/2007, 3:02 pm EST

hello world!

JDW | 7/8/2007, 3:13 pm EST

If the major label execs and the RIAA were smart, they would immediately abandon this effort to restructure and jack up copyright royalty payments to be assessed to U.S. Internet Radio stations (starting July 15). These stations are an effective way to enhance sales of both CDs and legal MP3 downloads; the labels and the RIAA are foolishly crushing out these stations out of existence — to their own detriment, whether they realize it or not.

The newly assessed rate scale, passed by the U.S. Copyright Royalty Board back on March 2, will raise the level of royalty payments by Internet stations anywhere from 300 to 1,200 percent, mainly because the ruling changes the royalty rates from being assessed on a “percentage of revenue” basis to a “per-song/per-listener” basis.

This reassessment is going to drive royalty payments through the roof, and because the rates are adjusted to be retroactive to Jan. 1, 2006, this will instantly bankrupt U.S. Internet radio stations and force them off the air immediately.

This change also applies to AM/FM stations that simulcast their terrestrial signals over the Internet, forcing them to cease their web transmissions. (It also applies on a limited basis to educational and NPR stations! Go figure.)

Internet radio is the labels’ best friend when it comes to boosting sales! It’s estimated that some 70 million people currently listen to Internet radio on a daily basis. A lot of these radio sites (which already pay composer and performance copyright royalties) offer a link beside the listing of the song being played, so that the listener can click the link and instantly buy a CD from Amazon or a download from iTunes.

This marketing bonanza will vanish thanks to this wrongheaded ruling by the CRB, which was heavily lobbied for by the RIAA and its nonprofit royalty collection branch, SoundExchange.

What were they thinking? Do the label execs think they can simply waltz into barren Internet Radio land and hand off programming to Clear Channel or somebody like that and get them to play only the artists they want to promote?

(Needless to say, this is probably going to drastically harm independent artists, who greatly depend on Internet broadcasting to inform listeners of their existence, thus boosting their CD/download sales and concert revenues, too.)

If this policy goes through, I predict that CD and download sales by the major labels aren’t going to simply keep declining. I predict they will plummet into the abyss. The major label business planners need to have their heads examined.

Support the Internet Radio Equality Act (H.R. 2060 in the House and S. 1353 in the Senate).

BurtBacharach | 6/27/2007, 10:40 pm EST

Downloading music is a good thing you morons. I’m sorry, I’m just not into paying 20 bucks for a CD, unless I know what I want and have good reason. (example: The new Wilco CD came out, went and bought it, respectively) The music industry these days isn’t putting out anything really, the only good albums I can think of this year are Kings of Leon or Wilco. About 95% of the music I download is generally previous albums by artist. People are getting smarter, buying a twenty-dollar CD for maybe two or three “somewhat” decent songs is over. Music is just art, musicians have it a hell of a lot easier than writers or painters. It’s art too, you know.

Unless you’re putting out some damn fine music, you’re not going to succeed in the music industry. Sure, people will have trends and artists will come and go, and then put out a second album and due to the fact it sucked, they blame it on the “internet.”

Isn’t it a little contradictory to independent musicians principles when all they do is bitch about not having enough money.

Music is just a form of art. And if you’re lucky, it can be a career, or a job, people get into making music for all the wrong reasons today.

who? | 6/27/2007, 3:47 pm EST

three ways the record companies can *start* cleaning up their acts:
1) STOP SUING thirteen-year-olds and little old ladies. the individual file sharer is NOT the enemy.
2) clear channel needs to evaporate and take risks putting indie and unsigned bands on mainstream radio.
3) the record labels need to CEASE their relentless hype machine that shoves songs and ringtones from no-talent hacks like t-pain down our throats. i guarantee that people don’t feel a single twinge of guilt stealing bits and bytes from decadent millionaires and the millionaire record execs. backing them up.

Scallion Breath | 6/27/2007, 11:11 am EST

Big Brother is watching indeed!

TVOD | 6/27/2007, 10:32 am EST

12 BILLION illegal downloads tracked for 2006. Nice culture we have here…

Pro-100 | 6/27/2007, 10:06 am EST

Valid points about illegal downloading here and how they are affecting the livelihood of working musicians. But to reduce prices on downloads lower than they already are to a mere 25 cents or the price of a real cd to under 10 dollars will adversely affect the struggling artist even more. The musician will only see about 14 cents per download or about $3.00 for a real cd sale. The cost of independently manufacturing 1000 cd’s for an independent artist is approximately $1,300.00. When you factor in studio costs, promotion and postage you are talking thousands and thousands of dollars invested for a return that is laughable, even if all of them are sold to fans.

Most people do not know the real costs for making music these days since they are not musicians or producers or studio owners and therefore do not see the costs that go into music production behind the scenes.

If you have a water leak in your house and you need to hire a plumber, do you expect him to do his work for free?

People need to support independent artists. People have absolutely NO RIGHT stealing from us. End of story.

man o man | 6/27/2007, 9:40 am EST

being an indie musician myself, i cant really stand to hear all of this BS from the music industry about their profits going down the drain. ppl still love and want music, its just that the days of spending $20 for a CD that has maybe one good song are over. hooray!! no one can afford that anymore. when i was a major label artist back in the 80’s and 90’s, the ones who got all of the $ were the execs with the grotesque salaries who screwed up everything anyway. the biz started out as a singles-driven industry in the 20th century (1920’s thru the 1970’s) and has simply returned to what it once was. the artist has to either adapt or die. most artists cannot either write good songs or are woefully inadequate as live performers. i see this as potentially weeding out the musical herd.

RenoDavid | 6/27/2007, 4:27 am EST

Well, I don’t think ALL of the music industry woes are due to illegal downloading. I think the industry has also been hurt by the increasing popularity of DVDs and video games. People only have so much time and money for entertainment and music isn’t the only game in town anymore. Pay television might be a factor too.

I have purchased some individual songs from the iTunes Store over the years. Less than 100 though. I still prefer buying CDs (and the occasional LP). iTunes is good for the occasional impulse purchase of that old song that I just have to have in my collection, but don’t see a need to have the album it was on originally.

I have all of my digital music (more than 10, 000 songs) loaded into my 60 Gb iPod, but I’ve been thinking of concocting some sort of digital music server. Having the CDs will allow me to rip them again at a top quality (lossless?) rate, that will sound great playing over the home stereo system.

Personally, I think the music industry pricing structure is way out of whack. Any CD over $10 gives me pause, and I’m not poor (not rich, but not poor either). I buy most of my CDs from half.com and try to keep the price around $5 or less. If CDs were priced at $5 it would KILL illegal downloading. Also, since the quality is lower than that of CDs, downloads SHOULD cost around 25 cents each. Actually, at the present prices, they should only be sold at the highest quality possible, and give the consumer the ability to save lower-quality copies for their portable music player. Right now the consumer is paying a premium price for a mediocre product.

One more thing about music downloading: Why doesn’t the music industry come up with a standard size for downloading cover art/liner notes? The purchaser could download this and print it out on your regular 8.5″ by 11″ paper. Forget duplicating the always-been-too-small CD size. The printouts could then be kept in some sort of album for easy perusal while listening to the recording. If we can’t have a physical disc, it’d be nice to have SOMETHING tangible.

sinewave | 6/26/2007, 4:45 pm EST

A message to ‘Unlucky’:

A musician signed to a label is NOT and indie musician. They are under contract. The reason why musicians are dropped by labels these days is precisely because of lack of cd sales due to illegal downloading. I am not in any way defending labels but they are in a business to make money, just like musicians. The chances that a musician these days making a name for himself without the backing of a label willing to promote them are slim to none, unless they have a prior audience or unless they have the funds to tour and I don’t mean to playing for audiences of 10 people on a Monday night at 1am or even worse, “Pay To Play’ venues, exactly what killed the vibrant indie / college scene of the 1990’s.

No matter how you try and convince yourself that illegal downloading is ‘right’ and here to stay, you are in fact a thief no matter how you look at it.

mmc | 6/26/2007, 12:56 pm EST

As far this ridiculous comment by ‘unlucky’, BUY A REAL CD AND DRAG AND DROP IT INTO YOUR IPOD SO YOU CAN JOG!

mmc | 6/26/2007, 12:55 pm EST

As far this ridiculous comment by ‘unlucky’, BUY A REAL CD AND DRAG AND DROP IT INTO YOOUR IPOD SO YOU CAN JOG!

A.M. | 6/26/2007, 12:52 pm EST

MP3’s are just a ploy by Microsoft & Apple to get richer and richer as they outsource more and more of our jobs overseas in the name of progress, as their upper management buy more luxury homes and condos built by illegal, unskilled non-union labor. I for one, have not and will not fall into this trap. You download a horrible sounding MP3, you take money away from the artist who increasingly faces more financial problems staying afloat to survive and even CONSIDER making another album because of what is happening today. Once music is in digital form, it eventually finds it way into the illegal zone of downloading. I blame the corporate world for this as well as the people who are STEALING music who have absolutely no morals anymore. Today’s musician is being raped by having his art fall into this trap of illegal downloading.

If we are STUCK with a world where MP3’s are the ‘norm’ for distribution, there must be a technology in place where the artist is rewarded and not raped. Somewhere there must be a happy medium developed.

I for one MUST listen to music in as high of an audiophile quality as possible and the compressed MP3 will never be an audiophile quality format by it’s sheer design, not even FLAC files are, which are being sold as the same price as a real replicated cd. And forget about this ‘new improved’ bit rate Apple is shoving down everyone’s throats. The are laughing all the way to the bank, not the struggling artists.

I would rather support the artists I listen to directly and buy their cds or vinyl directly from their sites or their on-line distributors, that way their efforts are rewarded. It will be a sad day when indy artists cannot even consider putting out any more music themselves because they feel that their art and expense is all for naught.

I dare someone to do a poll of the thousands of indy musicians struggling to make a living who start MySpace sites and ask them ‘How many cd’s and legitimate downloads have you sold in thelast year?’ I know what the answer really is.

Unlucky | 6/26/2007, 12:41 pm EST

You’re an idiot, MMC. Illegal downloading has NOT killed the indie musician. The labels promoting talentless bimbos, American Idol and dropping talented artists if their albums don’t sell as well as expected is what is killing the indie musician. If indie musicians want to survive, they need to embrace services like eMusic or simply distribute their own music on their website. The middleman that is the major record label has become obsolete. And as far as MP3s being rubbish, what are you smoking? Are people supposed to strap their phonograph to their back while they’re jogging or deal with a Discman that can’t handle the movement and continually skips? 8-Tracks and cassette tapes were rubbish. Digital music is here to stay.

Delaybass | 6/26/2007, 11:32 am EST

I use iTunes, but only for some stuff. If its some of my favorite bands or something I am very interested in, I want the physical copy its only on albums that I am wary of, or willing to not own the actual product and I willing to buy it via iTunes.
I would hope physical discs never totally go away but it really looks like they will.
If the labels can find away to make physical albums cheaper to buy then I think that will help some of us allot. I am not proud of the fact but I often burn CD’s from friends, because I want new music but often cant afford more then one CD every once in a while.

Delaybass | 6/26/2007, 11:31 am EST

I use iTunes, but only for some stuff. If its some of my favorite bands or something I am very interested in, I want the physical copy its only on albums that I am wary of, or willing to not own the actual product and I willing to buy it via iTunes.
I would hope physical discs never totally go away but it really looks like they will.
If the labels can find away to make physical albums cheaper to buy then I think that will help some of us allot. I am not proud of the fact but I often burn CD’s from friends, because I want new music but often cant afford more then one CD every once in a while.

Steven Patrick Morrissey | 6/26/2007, 11:13 am EST

the queen is dead, boys. and it’s so lonely on a limb.

c dub ya 71 | 6/26/2007, 10:43 am EST

music is not dead - just as LP’s still have an audience, the true audiofiles will hold on to their discs. Smaller in number, yeah maybe, but the audience targeted will be more focused, and rewarded.

Kyle | 6/26/2007, 10:16 am EST

I use iTunes regularly because I can get all the albums I want (White Stripes, new Pumpkins-and all the bonuses that come along with it) and the singles.

I don’t see why people are upset about singles becoming popular again. There’s nothing wrong with buying one song (isn’t the artist’s job to make an album worth of good songs? Or is that out of the question?).

CDs will go away, but not for a long time. MP3 is gaining steam and there’s no denying it is the future.

8 TRACKS? | 6/26/2007, 10:06 am EST

I think for the true collector, they will always want the personal record, tape, CD, no diffrent then collectiong coins or stamps, there is people who simply want to listen to music the easiest and cheapist way possible and good luck changing that. I prefer to buy it at a Record Store or even a second hand store, my choice. I find now that since there is so much on the info highway there is a lot more crap then ever.

mmc | 6/26/2007, 9:10 am EST

1) Who would buy music from Wal-mart is right! Who would buy ANYTHING from Wal-mart! They are destroying the middle class in this country.

2)Illegal downloading has killed the indy musician. The next time someone downloads illegally REMEMBER THAT!

3) Who would listen to MP3’s ANYWAY! Their is NO pleasurable value in listening to music in this format. It’s all rubbish.

4) The music industry and especially the indy musician needs digital copy protection in their files so this horrendous scourge of illegal internet downloading will end and our rich musical culture can survive for future generations.

5) Music is NOT free. Someone has to pay to make it. People DO NOT have the right to steal it.

Bonogamy | 6/26/2007, 5:04 am EST

I forgot, this may all be irrelevant if music consumers don’t get access to The Beatles sometime soon (no matter how much RS scolds them, the kids aren’t going to the record store to buy 25-year-old, out of date, thinly-mastered CDs.)

For fuck’s sake, they remastered Steve Perry’s “Street Talk” last year, but Apple Records has yet to touch the most beloved catalog in all of music.

A lot of young people are simply going to associate The Beatles with some archaic time of ancient history unless the music is remastered and brought up to date in terms of digital quality and internet distribution.

If Apple Records remastered the catalog and put it DRM-free on iTunes, with all the original artwork and bonus videos, not only would I buy all of it the second I found out it was available, they could use my money to feed starving political refugees or something, since they obviously aren’t motivated by money (and less so, it seems, by the declining stature of the Fab Four’s music.)

Won’t someone please think of the children?

Bonogamy | 6/26/2007, 4:43 am EST

I still love a CD with a booklet too, but as labels become more net-savvy (like EMI selling DRM-free tracks) the pushing out of CDs is inevitable. All they have to do is offer bonuses like videos and PDF digital booklets with the tracks. I’d pay for a new album or single that comes DRM-free with the same artwork that you would find in a jewel case. At least there’s some assurance of quality you might not find in a torrent.

With videos, booklets with artwork and lyrics and no DRM, you’d get everything you normally get with a CD but you can buy it without the hassle of dealing with snotty clerks and price-gouging markups. That’ll be the end of CDs for good.

Remember that when CDs first came out, the shitty duplication of album artwork and the tinny sound of early-80’s mastering didn’t stop people from making CDs the norm. The same will happen with digital music. In ten years, most singles and albums will come with artwork, videos and other bonuses when everyone realizes you can’t stop progress. It won’t mean the end of the album, but it will mean recognition of the fact that most music consumers are single-oriented.

A Stones CD from 1986, for example, looks like a shitty bootleg compared to the 2002 remasters. All these other companies have to do is improve the quality of the files, and include the actual artwork and lyrics, and they’re off to the races.

T-Nasty | 6/25/2007, 9:56 pm EST

Still like owning a CD with a booklet.

/Torrent still free.

jungleland | 6/25/2007, 8:31 pm EST

Wal-Mart is $.88 per download and is windows media, so no i-tunes / ipod.

These figures are for digital AND ACTUAL CD combined, so that’s why Wal-Mart has high numbers.

One thing is misleading… calling every 12 downloads an album. 12 downloads should be 12 SINGLES. An album means you bought the entire album all at once.

THE REAL STORY is about he return of the SINGLE, only it is in a digital format (and conversly the death of the album)

Illegal downloads are singles, leagal downloads are (mostly) singles, FULL Cds (albums) are showing the worst numbers in years

Chucky | 6/25/2007, 7:11 pm EST

Music is not dead, just how people buy/listen is changing. Whether CD’S themselves go out or not, I for one think it will be a complete shame for the art if it goes completely digital. How impersonal that is. Nothing physical in the product…that would be too sad.

hazanko | 6/25/2007, 6:39 pm EST

itunes rules with ipod at its side itunes sells everything from songs to movies and walmart sucks ballz

Spencer | 6/25/2007, 6:22 pm EST

CD’s are on the way out and music is not dead, it’s just the next phase. From Vinyl records to 8-Tracks to tapes to CD’s and now to MP3 files and digital music. Free music download services like Limewire and Bittorrent are the reasons for the sharp decline of music sales. Once the system goes from CD’s to Digital music full scale, then record sales will rise again.
Only problem with that is, how long will it be until that happens?

Chris | 6/25/2007, 5:13 pm EST

The planets dead. People get some real fucking priorities.

BurtBacharach | 6/25/2007, 4:51 pm EST

I’ve never even see marketing regarding Wal-Mart’s online music store. Who would buy music off them anyway?

Zombie | 6/25/2007, 4:42 pm EST

music is dead. people start crying.

mmd | 6/25/2007, 4:23 pm EST

records are dead. people get ready.

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