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January 24, 2005

Searching For Download Profit
Turns out 99-cent downloads are no way to make money, or so top music execs told the International Herald Tribune at Midem. Sony BMG's Thomas Hesse calls the quasi-standard fee "an introductory offer" -- "a fair way to begin the business" but, at 99 cents, it's difficult for all of us to make a decent living. ... In the longer term, we believe music is worth more. And we should resist the temptation to price music down to zero just because we're competing with free."

From Christophe Cuvillier from French music retailer FNAC, "The way this business is structured at the moment there's no way today to make money."
For Microsoft, music is another way to become part of the consumer's life. Mike Conte, GM of of MSN Marketplaces, says, "Music is not a big moneymaker for MSN. We cover our costs and little more."
In the same article, Sony's Phil Wiser talks about the company's flawed digital music strategy. "In many ways, our position in the market was ours to lose, and to some extent we lost it because of a couple of bad decisions. One of them was, clearly, going with an internal, proprietary technology, causing more damage than it did good." Now, Wiser claims Sony is leading the charge for open standards. "We're going to transition over time to have multiple formats. If we're successful, consumers will never have to worry about that again."
Posted by yatta at 01:08 PM