09/21/2005 - Steve Jobs Criticizes Labels for Proposed Price Hikes

Steve Jobs recently warned that raising prices on a-la-carte downloads would
increase piracy levels. Pointing to "greedy" record label efforts, Jobs strongly
advocated maintaining Apple's uniform, 99 cent price point on individual tracks. “The problem is we are still competing with piracy,” said Jobs at the recent Mac Expo Paris. “If they want to raise prices they are getting greedy." The comments come ahead of licensing renewal discussions with the majors, which are slated to happen in the next few months. In addition to advocating price increases, labels have also been interested in tiered download prices based on song popularity.

Tough negotiations are likely ahead, and Apple may be reluctant to give any ground. Already, Jobs is working the media, isolating the labels for wanting too much. But despite the gamesmanship, iTunes remains a rare success story in the paid music market, and consumers have been mostly uninterested in variable pricing programs in the past. Meanwhile, Apple could survive without major label catalog in a worst-case scenario, as most iPods are dominated by free downloads and ripped CD tracks. But so far, that outcome appears extreme.