Variable Pricing Fallout?
This is probably not news for people who visit the Apple iTunes Music store. Since April this year Apple has changed the pricing of their music tracks. It used to be that every music track in the iTunes store cost 99 cents. Instead, there is now a variable pricing structure. So when you connect to iTunes with your 16GB iPod Touch you’ll find that the prices of single tracks are 69 cents, 99 cents or $1.29. The way this is supposed to work is that the more popular singles cost more, and the less popular ones cost less. This is something the record industry had been pressurizing Apple to do for a long time now. (in “Apple to launch ‘variable-pricing’ for iTunes” ZDNet.com blogged: “Apple has finally caved to the pressures of the recording industry“)
This is not the first time that the pricing of songs in the iTunes Music store has changed. About two years ago, when Apple started offering some DRM-free music, it was priced at $1.29 per track, and the tracks with DRM stayed at 99 cents. This lasted until Amazon launched its online music store, with a much larger DRM-free catalog and singles for 99 cents. Apple then lowered the price of these DRM-Free tracks to 99c. (see “What iTunes Variable Pricing Means to You” from blogs.eweek.com)
The variable pricing structure is actually backfiring, as the more expensive tracks are selling less, and the increased price is not making up for it. (see “iTunes Revenue Drops on Tiered Pricing” on MP3newsire.net) This was predicted, but the Recording Industry still wanted it. (see “Music Industry Folks Worried About iTunes Variable Pricing” on TechDirt.com)
Posted on May 10th, 2009 by mervyn


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