Record execs want a bigger bite out of Apple

Yesterday, the Houston Chronicle reported on the ongoing pricing battle between Apple’s iTunes and major record labels. The record companies want Apple to raise the price of a single download from its current 99 cents, and they want a cut of iPods profits. Also in works, is variable pricing – higher prices for established artists and lower prices for more underground acts (which is fine for Houstonist, since we don’t plan on downloading Mariah Carey anytime soon).

Record companies get a 70 percent cut of each downloaded song, which is a much better return than they receive by selling CD’s after you factor in marketing and manufacturing costs. It seems like the large record companies haven’t learned their lesson from the “Chumbawamba Factor” last decade (most people who bought that band’s CD because of the hit “Tubthumping” were very disappointed with the rest of the tracks on that album and felt cheated). That trend of forcing consumers to buy the full album (by not releasing a single) is probably what led to illegal online file-sharing.

We’re happy that Apple is standing its ground (so far) on pricing. It brings us back to the days of the 45 record, when we could buy two songs for less than two dollars, and if liked what we heard, we would usually buy the full length album soon afterwards.

This whole shift in the recording industry brings up a couple of questions: Is there really a need for “record labels” anymore? (Artists like Aimee Mann and Matthew Sweet seem to be doing better without them.) With the “a la carte” downloading trend progressing, will there be a need for full length albums? How do you feel about not having a physical product (and artwork, for that matter) in your hands when you download an artist’s song?

It’ll be interesting to see how this unfolds. As long as we still have access to good music, and the artists can make a living, we’re happy as a worm in an apple.