Report: Music Labels Want Online Price Hike; Jobs Fuming

February 27th, 2005 at 2:00 PM - News by Brad Gibson

Some leading music labels are trying to raise prices for digital music downloads to squeeze out more profits, and Apple Computer chief executive officer Steve Jobs is not too happy about it, the Financial Times reported Monday.

The report suggests some music moguls want to squeeze out more profits as the publicis demand for handheld digital media devices, and the music to go with them, is at an all-time high.

"Music industry executives said introductory wholesale prices for digital tracks had been set low to stimulate demand, but Appleis success had prompted concern that they may now be too low," the FT report said.

Michael McGuire, an analyst at Gartner, said the move could backfire because consumers who buy music over the Internet are accustomed to paying U.S. 99 cents or less for downloads. If prices go up, he fears some users of pay services like the iTunes Music Store will go back to illegally downloading music for free from peer-to-peer services.

The report said Mr. Jobs was less than happy about the talk of raising online music prices, but it did not have directs quotes from Mr. Jobs and did not attribute the report to a specific source.