3-Tier iTunes Pricing: What Do You Think?

  • Posted: 08 April 2009 12:14 AM

    Apple has announced 3-tier iTunes pricing for music.

    I think this has been long in coming and may get the industry to aggressively back iTunes sales rather than being both for and against Apple’s music store. I don’t purchase much music so my additional out-of-pocket costs won’t be significant and I prefer the higher quality downloads despite $.30 more for new and popular tracks.

         
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    Posted: 08 April 2009 01:17 AM #1

    One problem as I see it is that the recording industry doesn’t accept a very simple but somewhat elusive fact - that when you release music, you are not just competing with whatever other music was released that week but every recording ever made.  Such is the nature of iTunes and digital media - it creates a level playing field.  Of course, the most popular and ‘latest, greatest’ are a bit more desirable because people are always hungry for something new.  However, once the ‘newness’ wears off, so should prices.  I guess what I’m rambling about is….I think any price increase is a mistake.  If anything, I’d like to see prices come down, topping out at a buck.  And I’d like to see lyrics, liner notes and full album art for each release including earlier releases.  If not, why not just get the CD from Amazon and rip it onto the hard drive at a much higher bit rate?  Basically, I think the record companies would be extremely wise to chill out with prices or more and more people will simply copy music and share each others’ collections for FREE.

    EDIT….Sorry DT, didn’t directly answer your question.  Guess I’d say let the market dictate prices, not the record companies.

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    Posted: 08 April 2009 01:25 AM #2

    I think I’ve spent $10.00 today on iTunes but my neighbor tells me for that money I could have downloaded so much more music from Russian sites. Especially so since I’m into world music.

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  • Posted: 08 April 2009 02:34 AM #3

    Eric Landstrom - 08 April 2009 04:25 AM

    I think I’ve spent $10.00 today on iTunes but my neighbor tells me for that money I could have downloaded so much more music from Russian sites. Especially so since I’m into world music.

      I’m not positive but I think the artist isn’t compensated under this scenario which is the only reason I happily pay for music.  I’ve already been paying the higher price since we’ve upgraded all of our music to be drm free.  I’d be very surprised if this made the powers that be any more comfortable with Apple.  I’m more than a little suspicious that they’ve been able to hide the true sales numbers in the past.  Apple’s dominant position has made that impossible under the circumstances. 
      I’m tickled that Apple broke the dependence on purchasing full albums as it allows me to fill in my collection with just what I’m looking for.  When it comes to new music I’m still more inclined to buy the CD from Amazon if I like the artist.  There have been too many instances through the years where something I didn’t think much about at initial hearing would end up being my favorite song.  Waiting in the Weeds on the Eagles latest album being the most recent example.

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  • Posted: 08 April 2009 08:01 AM #4

    Just the now-irrelevant old style recording labels clinging to their old business model. Fixed price was better for both customer and artist. Only bad for hangers-on like the labels!

    The fact of the matter is, the labels would be better off if Apple did have a monopoly on music distribution.

         
  • Posted: 08 April 2009 12:22 PM #5

    Apple learns from App Store market pricing. Way to go!

         
  • Posted: 08 April 2009 12:27 PM #6

    I’m just glad most of the stuff I like is pretty unpopular. I’m looking forward to lots of sixty-nine-cent downloads.

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  • Posted: 08 April 2009 12:48 PM #7

    It will be interesting to see how long it takes for prices to drop on a formerly “most popular” song.  (And they should just change that labeling in iTunes to read “most expensive” songs.)

    So when a song leaves the “most popular” list - will it drop in price in a day?  a week?  6 months?  a year?

    Guess we’ll have to wait and see… and wait to spend $$ on them also.  Way to introduce something that promotes a “don’t spend money on that now” idea during a time when we need to keep the dollars flowing.

    Just sayin’.

         
  • Posted: 08 April 2009 01:21 PM #8

    I can understand why the record labels are wanting to raise prices on their most popular prices in order to raise their revenues, but I really don’t think this is a good idea. When iTunes was conceived part of the idea was that all songs would be sold for the same price, 99?. Doing this created the level playing field that has led to the iTunes store not only raises that price above the psychological barrier of $1.00, but gives the record labels power to set as many songs as they like at the higher $1.29 price tier. Also, I don’t know if anyone else has taken a look at some of the selections in iTunes since this went into effect, but the 69? songs are very sparse. I have yet to find a song that I have the intent to purchase priced at 69? and I am really not into any of the new music that is coming out now. I do think it will be interesting to see how long it takes for “popular” songs to fall from the 1.29 tier back down to the 69? tier. Ultimately, in this economy raising prices will result in much less sales from people who would otherwise not hesitate to buy a song or two, simply because $1.29 looks like a whole lot more than 99?.

         
  • Posted: 08 April 2009 10:30 PM #9

    I can’t see why apple met this demand.  It’s business insanity:  Apple is not the only music download store, and competitors retain control over pricing/margin decisions.  Amazon was already undercutting iTunes on some tracks, and with 1.29 for popular tracks, its going to seriously encourage iTunes users to look elsewhere.  The labels don’t get what they want and apple looses big.

    But part of what the labels wanted was to kill iTunes dominance in that market, right?

         
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    Posted: 08 April 2009 11:30 PM #10

    azarkon - 09 April 2009 01:30 AM

    I can’t see why apple met this demand.  It’s business insanity:  Apple is not the only music download store, and competitors retain control over pricing/margin decisions.  Amazon was already undercutting iTunes on some tracks, and with 1.29 for popular tracks, its going to seriously encourage iTunes users to look elsewhere.  The labels don’t get what they want and apple looses big.

    But part of what the labels wanted was to kill iTunes dominance in that market, right?

    As I understand it, Amazon has started raising their prices now too. I agree that the labels wanted to thwart iTunes dominance, but I’m just not sure how important it is to Apple anymore. They really don’t make that much from music sales anyway (as I understand it), the iPod is now ubiquitous, and iTunes is moving on to conquer new territory (video and handheld apps).

    Music pricing shenanigans will hurt the labels more than it will hurt Apple, who is quite frankly skating to where the puck will be next, the mobile device market.

         
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    Posted: 08 April 2009 11:49 PM #11

    iBill - 09 April 2009 02:30 AM
    azarkon - 09 April 2009 01:30 AM

    I can’t see why apple met this demand.  It’s business insanity:  Apple is not the only music download store, and competitors retain control over pricing/margin decisions.  Amazon was already undercutting iTunes on some tracks, and with 1.29 for popular tracks, its going to seriously encourage iTunes users to look elsewhere.  The labels don’t get what they want and apple looses big.

    But part of what the labels wanted was to kill iTunes dominance in that market, right?

    As I understand it, Amazon has started raising their prices now too. I agree that the labels wanted to thwart iTunes dominance, but I’m just not sure how important it is to Apple anymore. They really don’t make that much from music sales anyway (as I understand it), the iPod is now ubiquitous, and iTunes is moving on to conquer new territory (video and handheld apps).

    Music pricing shenanigans will hurt the labels more than it will hurt Apple, who is quite frankly skating to where the puck will be next, the mobile device market.

    I tend to agree. The iTMS has become an entertainment portal for the iPod; music is just one part, and seemingly, a diminishing part. Further, the App Store expands the iTMS concept to an arena in which Apple controls nearly all of the widgets.  And as we have seen on the App Store, pricing is quite fluid.  I suspect similar results will be seen with music. Also variable pricing may open the door to having direct distribution rights with new acts who may be anxious to charge $0.69/track.

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  • Posted: 08 April 2009 11:54 PM #12

    I see this move as industry capitulation the album sales model will no longer work. The industry has been fighting this reality and blaming Apple all along. By providing the industry with tiered pricing, there’s less of a reason for the industry to keep roadblocks in Apple’s way.

    As long as Apple maintains its dominance with the iPod and the iPhone the iTunes store will maintain its dominance in online music sales.

    We have five iPhones in the household and attention is more and more moving away from music to apps.

         
  • Posted: 12 April 2009 06:52 PM #13

    I was pleasantly surprised earlier today to see the number of tracks that have been dropped to $.69 in the iTunes music store. I know much of the discussion has been about the rise in price for current and currently popular tracks, but someone desiring to fill out a collection of classics may be delighted to find comparative bargains in the new pricing structure.

         
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    Posted: 12 April 2009 07:13 PM #14

    The market will decide.  If $1.29 doesn’t rake in the dough like the labels are hoping it will, we might see less tracks sold at that price point.  Me personally, considering how much prices go up over the years and that a track was $0.99 at the launch of the iTMS in 2003 (ah, remember when it was just a music store?), I’m not bothered by the $0.30 price hike for the occasional gotta-have super-popular song.

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  • Posted: 12 April 2009 09:54 PM #15

    Mav - 12 April 2009 10:13 PM

    The market will decide.  If $1.29 doesn’t rake in the dough like the labels are hoping it will, we might see less tracks sold at that price point.  Me personally, considering how much prices go up over the years and that a track was $0.99 at the launch of the iTMS in 2003 (ah, remember when it was just a music store?), I’m not bothered by the $0.30 price hike for the occasional gotta-have super-popular song.

    Especially when the track is downloaded at a much higher quality bit rate and is DRM-free. That’s worth $.30 more. I’ve bought much more music in the years since the iTunes store opened than I did in the decade prior simply because it’s easier to buy music online and I don’t need to buy an CD album to add a couple of desired tracks to my collection.

    Anyone notice the disappearance of used music stores (and most bricks and mortar music stores) since iTunes opened its digital doors?