Digital Music

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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4 Comments

  1. I don’t think the labels will be able to help themselves unfortunately. I foresee them taking advantage variable pricing as soon as the clock strikes midnight on 4/4. Maybe even before…

  2. Yep Unfortunately the labels have the attention span of a flea. They’ll want to get paid as much as possible right now rather than lowering the price on everything and encourage more people to buy more music. Itunes could compete with p2p if the price was low enough. Great usability combined with fair prizing is what the people want.

  3. They will raise the price and sales will continue to decrease, perhaps at a greater rate.
    Then one day we will see a small article in the WSJ:
    Major Labels Bankrupt, RIAA dissolves, Good Guys Win, The End.
    bbb
    wheatus.com

  4. Yes, I do think the labels will abuse this, and NONE of the extra profits will go to the musicians, who deserve it the most.
    This is why I have refused to purchase an iPod. Frankly, I’d rather stay away from Apple as long as possible when it comes to everything they do that is music related. I’d rather get a Sony MP3 player or stick with my phone, which thus far is working out nicely.

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