Variable Pricing of iTunes, Amazon Benefit the Record Labels

By Alexander Toldt
14:13, April 9th 2009
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Apple’s new pricing policy for its iTunes Music Store enabled the major record labels to charge listeners more for the tracks they like the most. 

 
Until Tuesday, Apple was selling all the tracks in its store for 0.99 cents. It did not matter whether the tracks were old or new, highly-required or not so required by listeners. On Tuesday, the Cupertino-based fruit company started selling songs for 69 cents, 99 cents, or $1.29. The price gets higher depending on the popularity of the song. 
 
This move from Apple, the largest music retailer in the United States, was described by La La Media, another player on this market, as an “industry shift.” Buyers of online music can forget about the 89 or 99 general price for downloading one MP3. 
 
Amazon.com and Wal-Mart are now on the same trend and adopted the variable pricing policy. The two tunes vendors increased the price of the new tracks by 30% to $1.29 on Amazon, and $1.24 at Wal-Mart. Amazon.com holds the second place in the top online tunes sellers behind Apple’s iTunes, but ranks higher than the other players in this industry such as Wal-Mart. 
 
Probably Amazon and Wal-Mart aren’t very happy about this. Raising prices during recession can’t be something a company considers as good strategy, but in this case it was made possible by Apple, which made it possible for record labels to raise prices. 
 



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