"From our perspective, we welcome Apple's price drop. It will encourage more and more people to download more content legally" - Domenic Carosa
Kate O'Toole, Michael Atkins and Domenic Carosa
Will price of music downloads in Australia drop across the board?
CEO of destra Corporation Limited (ASX:DES), Domenic Carosa, was interviewed by Michael Atkins on triple j's Hack Daily about the status of the price of music downloads in Australia on the favourite radio program on Wednesday, 23rd October 2007. Hack Daily is featured on triple j radio every weekday at 5.30pm.
Excerpt from the radio program:
Kate O'Toole: Has the price of music downloads in Australia just got a whole lot cheaper? First, Apple dropped the U.S. its best price to USD 99 cents. Apple Australian then followed suit by dropping their price of DRM-free downloads by AUD 50 cents to AUD $1.69. DRM means that the songs are not restricted to a particular music player or computer. But crucially, the deal doesn't apply to the whole iTunes catalogue, so will it lead to a download price fall? Michael Atkins has more.
Michael Atkins interviews Domenic Carosa about the possible price fall of the price of music downloads in Australia.
Michael Atkins: A quick look around the major Aussie download sites shows lack of competition on format, quality and pricing. A spokesman for Telstra Bigpond, the second largest store say they can't sell DRM-free downloads in MP3 format due to opposition from the major record labels but Telstra are in the middle of negotiations with EMI to change that situation. They have no current plans to drop their prices. Another player in the market is destra. They sell downloads through retail stores, JB Hifi (www.jbhifimusic.com.au), Harvey Norman (www.channelgo.com.au) and in independent online stores. Most of their downloads are in Windows WMA formats which doesn't work on iPods and have DRM restrictions. The CEO of destra, Domenic Carosa welcomes the Apple price drop but says his company has been selling downlods for AUD $1.69 or cheaper for over a year and doesn't plan to go any lower.
Domenic Carosa: I mean we're not going to enter a price war with Apple. From our perspective, we welcome the price drop. It will encourage more and more people to download more content legally and we've run a number of trials in the past where we've dropped music down to AUD 49 cents, as well as AUD 99 cents, and the consumption of that music has increased three and four folds.
Michael: So, will you put the pressure on JB Hifi and Harvey Norman to drop the prices of what they offer now?
Domenic: Ultimately, a pricing decision is up to them.
Michael: Do you think we have enough competition in Australia on download price at the moment?
Domenic: I believe that prices should come down. But at the same time, not only prices should come down. The whole notion of DRM should just be terminated and all content should be in MP3 format so they work on every single player.
Michael: What's in the way of that?
Domenic: A lot of the record companies demand a minimum price for their tracks and so that's part of what's in the way of differential pricing.
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