iTunes, Amazon, Wal-Mart Pricing Music Variably
On Tuesday, Apple introduced variable pricing to the iTunes Store. While this was news in itself, it seems the rest of the industry is following suit.
On Tuesday, Apple introduced variable pricing to the iTunes Store. While this was news in itself, it seems the rest of the industry is following suit.
Apple announced at Macworld that it would remove DRM from all of its songs. The idea of the tiered pricing is, of course, to make more money. By capitalizing on more popular songs and charging less for the songs that weren’t really selling anymore Apple has upped the revenue and still makes a penny here and there on the older tunes.
That said, the problem with said pricing is that in a recession, increasing the price of anything drives the average consumer nuts. That in mind, we figured Amazon and other iTunes competitors would be sitting pretty, safe in the knowledge that the most popular music store was upping its prices, driving a little more business their way. Not everyone was willing to pay $1.29 for the latest tune, right?
Unfortunately this is not the case. It seems Amazon, Wal-Mart, Rhapsody and Lala have all followed suit, raising the prices of their music so that they’re closer to Apple’s. On the one hand we can understand their thinking, if Apple can do it, so can we. On the other hand, it seems silly to pass up the chance to be the known as the cheapest.
Amazon has jumped on the variable pricing bandwagon with some newer tracks costing $1.29, others costing 99c and some even cheaper at 89c. Lala has also changed its tune (look pa, I made a funny) explaining in a company blog post that the raised prices were an ‘industry shift.’
What do you guys make of the price changes? I’m happier to purchase the albums in their entirety to save money, as I’ve always done but will this make a difference in your decision when purchasing music? Or is this just one of those price increases that’s implemented as the years go by like the cost of bread, milk or a newspaper?
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Some cable companies do this with their pay-per-view movies. If it's something that people like, they'll charge more for the viewing. Personally, I think it sends the wrong message. If they charged based on how long the movie/song was (meaning they were streaming more data to you) then it would be justifiable because you can relate that to some kind of bandwidth and associated cost. But if they're just charging you more because they can, then they are showing very little consideration to the customer.
And before we see a lot of flak here regarding "Charging you more because they can... that's the #1 rule of business! PROFITS," please keep in mind that it's hard to make a profit if you have no customers, and lots of potential customers do prefer a company that cares.
Overall a good piece of work here from the writer, though there was the occasional typo and the misuse of "that said" (meaningless without the "with" in front of it) which was immediately followed up by "that in mind." I do think those can infuriate some of your readers who have some quirky pet-peeves. =)
Jane, I'm really starting to enjoy your articles.
Seems to me that all the albums are still $9.99 (for me in Canada as well), so it won't affect me since I usually I buy them in albums not separate songs.
deltatux
Personally, I think this is great and is the way it should have been all along. iTunes has done two things; It has made albums cheaper and has made buying individual songs possible. So now you have people who still buy the whole album and people who prefer to download just one or two songs from one. When every song is 99 cents, the consumer gets the benefits with the more popular song. But what new artists that haven't hit it big yet or artists that people just don't care about anymore. I don't think their songs should be as expensive as the most popular songs out there. Maybe if their price is dropped, more people will end up downloading them because their cheaper? And songs that are extremely popular SHOULD deserve more reward. Yes you might lose a small number of people who aren't willing to pay more, but tough cookies! That's how economics works! It will benefit Apple, it will benefit the artists that produce what the consumer likes to hear, and I doubt 30 cents is really gonna break the bank if they really want that hot new sound. Put it this way. You've got a KIA, an Acura, and a Mercedes. Do you really think it would be fair (at least from Mercedes perspective) for someone to be able to buy their car at the same price as the Acura? And do you think people would pay the same price for the Kia as the Acura? No. I think not.
Just more incentive for people to keep pirating music TBH.
I think lowering prices for old songs is cool, but any increase in alredy high prices is a lousy move.
But maybe it will work for them.