Feeds

Aussie firms fight to take biggest loss for music downloads

Cheapest tunes but at what cost

  • alert
  • submit to reddit

SANS - Survey on application security programs

A price war between online Australian music sellers has pushed per track download costs to record lows.

Aussie ISP Teltstra last week slashed the price of songs downloaded from its BigPond Music service to 99 cents (US$0.75) each from A$1.49 for subscribers and A$1.89 for the rest of the plebs. Rival Destra, which proudly bills itself as Australia's DRM (digital rights management) pioneer, did Telstra one better by cutting its per track cost to 89 cents, vowing it "not be undercut by Telstra or any other new player to the marketplace.” Both companies have limited the price cuts to April at this time.

"Wal-Mart in the United States recently attracted world-wide attention by offering downloads for US88 cents (A$1.18) undercutting Apple's US$99 cents (A$1.34) iTunes," said Justin Milne, managing director at BigPond. "Now BigPond Music is offering music fans in Australia a chance to join the music download revolution at the price of 99 cents for April."

The two companies appear willing to take per song losses in the hopes of attracting more consumers to "legal" online music stores. Leading online song seller, Apple has said in the past that it loses money as a result of bandwidth costs and the cut taken by the record labels at US$0.99 per song. Apple, however, does make money of the pricey iPod music player.

But the Australian sellers do not have lucrative hardware to fall back on. Still, they justify the April promotions as a way to up interest in online music and their services over the long haul.

"This is just a promotion for April," Domenic Carosa, CEO of Destra, told The Reg,. "It has already encouraged more people to try legal music downloading and encouraged more people to go online."

Carosa declined to detail how much money Destra losses per track at the promotional rates or otherwise.

At the end of April, Destra plans to up its prices to between A99 cents and A$1.99 per track. At the low-end, this would still make Australia the cheapest place to buy music online in the world. Of course, millions of consumers download music for free with the help of peer-to-peer services.

One might think that direct delivery of music via the Internet would be more efficient and, dare we say, profitable than sending trucks full of CDs to record shops. The labels, however, seem intent on making sure per track song sales prove less attractive to vendors than pushing more palatable subscription services that make sure consumers shell out at least $9.99 per month for entertainment - see Napster and Real Networks.

It's nothing short of astonishing to see technology companies outbid each other to fit in with these rigid pricing models backed by the recording industry. ®

Related stories

War on Culture's victims face Penitentiary Blues
Triple setback for music giants' global jihad
Kazaa and co 'not cause of music biz woes', say Profs

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.