iTunes Hits $1.29 But EMI, Amazon And Walmart Buck Pricing Trend

Yesterday iTunes dropped all remaining DRM and launched variable pricing.  As predicted, the major labels and some major distributed indies upped prices on hit product to $1.29. 

EMI Holds At 99 Cents

EMI appears to be the one major label not jumping on the price increase bandwagon. A Wednesday morning survey of iTunes showed hit product by Coldplay and other EMI artists still at $.99. During the original transition to DRM-free, first mover EMI had been criticized for demanding a $1.29 price point. This time EMI may be waiting to gauge consumer reaction before raising prices.
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 Amazon & WalMart Hold Down Prices
The price of hit product from Sony, Universal and WMG also rose to $1.29 on Napster and Rhapsody yesterday. But while they increased prices slightly, Amazon and Walmart.com 
thus far kept them well below $1.29 at $.99 and $.94 cents respectedly.  All download stores pay the same wholesale price; so presumably Amazon and Walmart are accepting much slimmer margins to offer lower prices than iTunes.

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Sony Forces $1.29 On All Stores

The glaring exception is hit product from Sony and its distributed labels which is priced at $1.29 an all retailers including Amazon and Walmart. Unlike all other labels and distributors, Sony offers its music to all download stores using the so-called agency model which enables the label group to control the final sale price.

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  1. I believe that you will find that all the $1.29 tracks on Amazon and WalMart are from Sony labels as I stated in the article. I’ve added the phrase “and distributed labels” to the post to add clarity. (Britney on Zomba is an example.)
    Do you or anyone see exceptions?

  2. It’s because your second paragraph makes it seem that Amazon and Wal-Mart are resisting Sony’s price increases, while the third paragraph states the opposite.

  3. Correct, I should have been more specific. The headline simply implied that Amazon was not making the move to variable pricing, when in fact they did so on Tuesday along with everyone else. Granted, it does appear that they are taking a slightly different approach.
    Another misconception reported by the media (not necessarily Hypebot) was that Amazon, Rhapsody, and others somehow “followed” iTunes on this. In reality, iTunes,Rhapsody and Amazon all switched prices at the same time. Amazon lagged a bit on Tuesday, but it probably had more to do with some backend technology lagging, rather than some strategic move.
    The labels put a date/time in place as to when the wholesale prices would go up. It was up to the individual retailers to make the change. It had zero to do with iTunes doing something and then everyone else trying to play catch up.

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