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Business News Digital
Variable pricing cropping up across digital music market
By CMU Editorial | Published on Thursday 9 April 2009
Well, we wondered if the move by iTunes into variable pricing this week, so that some downloads are priced at $1.29 instead of 99 cents, would be replicated at other download stores, and it looks like it will be, and, for that matter, already has been. According to CNet, more than a few downloads are now selling for $1.29 on the US version of Amazon MP3. There are also reports in the US that Walmart and Real Network’s download stores are selling tracks above the 99 cents price point.
It is likely that the price increases across the board are being caused by an increase in the wholesale prices for some downloads as set by the labels and their digital distributors. The labels have wanted variable pricing in the download space since the very early days of legit download stores, of course, and it looks like they are now getting their way. Presumably that means that the labels’ deals with other download stores allowed for variable pricing, but possibly only once Apple had agreed to move away from the 99-cents-for-all-tracks model it created and had been very committed to until recently.
Given the price changes are seemingly happening across the board, the introduction of variable pricing probably won’t have too big a negative impact on iTunes, as had been predicted by some. Though some commentators still reckon that by raising prices, and even just by adopting the more confusing variable pricing model, some consumers of legit download stores will be pushed toward illegal services where everything is consistently priced at zero cents.
I’m not sure that’s really true, though it might make sales and price cuts on specific tracks a bigger deal in the digital market. Both Amazon and Play.com have in the past run promotions offering certain tracks at considerably less than the usual 79 pence price point in the UK market.
