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Will Labels Use Or Abuse iTunes Variable Pricing?

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Following months of lobbying by the major labels, the iTunes store will add variable pricing on April 7th.  Tracks will be priced at $.69, $.99 and $1.29.  There''s been no official word as to which downloads will be sold as various price points, but presumably some older catalog will be reduced in price; while some hit product will be cost 30% more than before.

But will the major labels use this opportunity to lower overall prices or abuse it by trying to ring a few extra pennies from the few paying customers that have left? TAG's Ted Cohen wrote on the MidemNet blog, "As we continue to try to wean a whole generation off of 'free,' it's critical that we don't 'jump the shark' at this juncture."  Jim Guerinot, who manages Nine Inch Nails, No Doubt and Offspring told the LA Times, "Wouldn't it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?"

If recent major label behavior is any indication, the labels search for revenue will almost certainly trump reason and the demands of the consumer.

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