This is another example of biting the hand that feeds you. MP3's were being freely distributed; people making CD's of songs they wanted; and the Record and Tape Industry screamed (and rightfully so) about their material being mass distributed without royalties.
So, Apple creates (operative word here, creates) a website that sells 'virtual' data; and the Record Industry begins to gather money with NO EFFORT on their part whatsoever. No tracking, no advertizing, no inventory, no distribution, no promotions. Heck, Apple even managed the site for them.
But, this still isn't good enough. No, now they want MORE money per song; and Apple and other sites hold the companies to their contracts.
Now, these record companies want to 'tax' the very group that provided them with Billions of unclaimed dollars. It appears the very basic ideas of creativity, (why didn't the record companies start an internet music store?), commercialism (with the exception of Sony, no record company has YET to market their own MP3 player), and free enterprize (charge too much, people will simply share the music freely amongst themselves).
There are so many lessons that COULD have been learned; yet have not apparently been grasped yet. Beta tapes of movies used to run $60-100/movie. The price dropped, and instead of dubbing a copy, people PURCHASED the movie. Now with $20 I can either buy a New movie release; but I still can't buy the Beatles White Album. Why not? Haven't the Record companies recouped their money from the Beatles? If CD's weren't price fixed (which is illegal, and the record companies have already lost at least one class action suit on this one), if the prices weren't artifically high; and if the songs today had 1% of the talent exhibited 30 years ago; things may be different today.
I also remember when VHS/Beta videotapes costed between $60-100 per title. This was back in the mid-1980s. I remember wanting to buy my father The Godfather on videotape and it was over a hundred dollars! (I got him socks and underwear instead.)
Now this was during a time when the movie industry thought that videotapes were going to put them out of business. And indeed, many of us bought blank VHS cassettes and taped movies off HBO. I ended up taping about thirty movies this way.
But suddenly the movie industry got a clue and decided that if they couldn't beat them, why not join them? So they dropped the price of pre-recorded videotapes (soon to be followed by DVDs) to where normal people could afford them and suddenly they started selling them in the millions.
How successful was this? It was so successful that box-office bombs turned into profitable hits when released on VHS/DVD for about $10 a pop. It was so successful that box-office hits DOUBLED their revenues overnight on the very first day of VHS/DVD release!
And what about all those movies that we taped off HBO? They are gathering dust up in the attic. Why fuss with a poor quality home-made tape when you can get the real thing with crystal-clear quality and all the bells and whistles (deleted scenes and other extras) for a very reasonable price?
I keep waiting for the day that the recording industry decide to open their own "iTunes" stores and stop ripping off the consumer with these $17.99 CDs. But I am stunned to see that they still apparently insist on continuing on with their doomed "horse and buggy" business model. It's getting to the point now where it is too late for them to recover.
At least it will be fun to watch. Everybody loves to see a train wreck.