[Ti] [OT] Applemusic.com - is the price right?

[Trevor J. Hutley]

At 13:40 -0700 28-4-2003, Bill Reburn wrote:
>Everyone catch the keynote?
>
>New iTunes, New iPods, new music downloads.. Awesome stuff

Great stuff.  Great software, connectivity, quality, range, 
e-commerce, etc.  Superb innovation, technically.

BUT is the price right?  Is the added value fairly distributed?  Just 
some thoughts  ......

If we assume that the price of a CD is about $1/track (just for 
argument's sake).

The Apple innovation really changes the nature of the value chain, 
cutting out all the intermediaries.  This is normal in e-commerce.

But since the AppleMusic price is about the same (¢99/track), all the 
existing margin in the conventional value chain accrues to someone. 
We do not know what deal Apple have cut (no pun intended) with the 
music 'suppliers', but someone is now making a good margin; who 
previously was making none (Apple) or was making much less (the music 
suppliers).

What does the consumer gain ?  Convenience, marginally or perhaps not 
noticeable lower quality, choice.
But not, or not significantly, lower cost.

I am sure that the artists get no benefit.  I would like to be wrong 
on that one.

It is  my feeling that this apparent/first glance inbalance in 
benefits of the new delivery channel will inevitably force changes. 
Once the value of the new delivery channel begins to be seen, the 
added value of the few participants will be seen as in appropriately 
large.   My prediction is that the unit price will change.

Do I spend too much time assessing business plans and business 
models, that I cannot see this one as sustainable?

How do others see the price aspect of this innovation?

regards,  Trevor