Apple’s iTunes will increase the price of hit singles and in-demand tracks to $1.29 on April 7th. The new variable pricing method will also reduce the price of other songs. Label executives contend the new pricing will allow them to offer packaged downloads of songs that might entice consumers to spend more on music. (Los Angeles Times)
Critics say:
“Some music industry veterans are criticizing the 30% hike price, saying the timing is tone deaf because it comes in the midst of a recession and at a time when spending for online music appears to have reached a plateau.”
“This will be a PR nightmare,” predicted former EMI Music executive Ted Cohen, who is managing partner of digital media consulting firm TAG Strategic. “It is for the music industry what the AIG bonuses are for the insurance industry.”
“Wouldn’t it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?” he said.
Supporters say:
“If you’re not drawing new people and your spending isn’t growing, it’s a natural part of the product life cycle” to raise prices, said Russ Crupnick, a senior analyst for NPD Group. Crupnick said he doubted a 30-cent price increase would prevent iTunes customers from buying a hot new release from artists like Kelly Clarkson, Flo Rida or Lady Gaga. He noted that offering a discounted second track packaged with a premium priced song from the same artist could boost sales.
The Bottom Line: In the hey day, artists successfully delivered an entire package what we called an album. Today, the act thrives on a single and usually the single alone. With the help of technology and the lack of an album – consumers have trained themselves to listen and purchase singles only, hence, it’s natural progression to increase the worth of the single.
Why pay $1.29 for crappy M4As, when you can get a slightly less crappy MP3 for 99¢?
Hey, Jobs – I thought you weren’t gonna raise prices. Maybe this has something to do with that imapasse on The Beatles’ catalog?
Anything for an exclusive, huh?
>> Crupnick said he doubted a 30-cent price increase
>> would prevent iTunes customers from buying a hot new
>> release from artists like Kelly Clarkson, Flo Rida
>> or Lady Gaga.
But it will likely deter customers from buying a “hot new release” from Kelly Clarkson, Flo Rida, AND Lady Gaga. I see it like you’re gaining $.30 from one definite purchase, but missing out on $.69 from what would’ve been that next purchase. Do the labels still think they’re in control? That they can charge whatever they want? That they aren’t going to lose consumers?
And $.69 for catalog tracks is great, but the hike for in-demand tracks shows that they aren’t looking towards the future.
Just ethically, though, I can’t wrap my head around the idea that the industry thinks, in this economy and still in the middle of this decade long pr nightmare, that they should hike prices 30% on a product that’s a fraction of the audio quality of it’s physical counterpart, with no manufacturing or shipping cost, and doesn’t come with any artwork.
Maybe this will be huge for Amazon.
[...] (A.K.A. the most downloaded) will raise from the standard 99 cents to new pricepoint, $1.29 reports The King of A&R. Enjoy buying 3 tracks from the price of [...]
Won’t this just encourage more people to download illegally? I’m curious to see how this plays out.
I can’t beleive that they are raising prices – haven’t the corporate moguls taken enough black eyes? This is preposterious – there is absolutely no reason to raise prices except for greed ? – and as for the product life cycle? The product pricing decreases as the production and marketing spend decreases – you idiot!!
I’m trying to keep an open mind so I went searching for bargain catalog tracks from some of my favorite artists. Here’s what I found…
Tom Petty
$1.29: 1 (Free Fallin)
$0.69: 1 studio track, 2 live tracks
Van Morrison
$1.29: 1 (Brown Eyed Girl)
$.69: 1 (a duet with Sandy DeCrescent on the Sleeping w/ the Enemy OST)
The Wallflowers
$1.29: 1 (One Headlight, but only on the 90’s Rock Number 1’s, along with 5 others)
$.69: none
The Eagles
$1.29: everything but their new record & their 2 holiday tracks. 59 studio songs, 15 live recordings.
$.69: none
Creedence Clearwater Revival
$1.29: at least 6 studio tracks, at least 10 live tracks, at least 1 alternate version
$0.69: none
(To be fair, though, most CCR full albums are $5.99, $6.99, or $7.99)
No Change (all still $.99)
Fleetwood Mac, Bob Dylan, the Band, Rolling Stones, T. Rex, Mungo Jerry, David Bowie, Pink Floyd, Ben Kweller, Jackson Browne, Doobie Brothers, Steve Miller Band, Rilo Kiley, Elliott Smith, The Format, Mott the Hoople
As far as new stuff, all of Flo Rida’s record, all of Death Cab For Cutie’s new EP, & half of Lady Gaga’s & all of her remixes are $1.29, & then most of the singles in the top 10.
Thought I’d be able to find the $.69 songs, especially in artists who have huge catalogs that are somewhat spotty or are full of unnecessary live albums (Fleetwood Mac). But I can’t really find any. Maybe the music I listen to is just inherently valuable?
Started digging really deep & C+C Music Factory have 4 $.69 tracks on their 1994 record (4 years after their 2 hit singles), 2 are interludes & 2 are “moment of silence for…” tracks that are just dead air. ($.69 for ten seconds of nothing…)
Ok, so the price change came out today. This is the worst change i have ever seen itunes ever take. i cannot even find one 69 cent song, but there are a boat load of 1.29 songs…. you know, i think people are going back to the “Limewire” thing or changing over to Rhapsady (where you can preview the entire song). Thanks a lot Itunes, your crap now!
This is ridiculous! I was so mad when I notice the prices go up to $1.29. I agree this will definitely cause more people to download illegally because I for one, am not willing to waste 30c more just because a song is more popular. This is the worst time to be increasing the price of music. If I’m scrimping just to afford groceries and other necessities, I’m definitely not going to pay more for my music!
and corporate america is still baffeled as to why so many people limewire their music? here they are trying to fight limewire, through lawsuits and loss of internet service for using illegal programs…and then they turn around and increase prices.
its almost a no one win for the customer, if they happen to use certain internet services that is in cahoots with the music industry, to report those downloading illegal music/movies and whatnot.
all i can say is, that itunes, is practically handing over their customers to the competition. the ipod i bought last year, is the last ipod i will ever buy. i have my reasons, beyond just a price increase.
what really is annoying, is that you are paying all this money for a song that can only be used for mp4 and not mp3s.
who wants to spend more money just because a song is popular….i guess the zune will be getting more customers along with rhapsody….the only thing probably keeping itunes from completely failing and losing all its customers, is that, $1.29, is still an improvement from having to go to the store to purchase a cd for 13 dollars, only to like 1 or 2 songs.
After fighting for the record companies for years and always buying my music I am more insulted than anything. I definitely will be jumping on the torrent and LimeWire bandwagon. I think they just lost a lot more money than they’ll make with this little stunt.
Zune won’t pick up any more customers & neither will Rhapsody. Unless people are just ignorant. People will just be more apt to put illegal mp3s on their iPods.
Coolfer had an article about the change saying that top downloaded songs that were upped to $1.29 dropped several spots on average, but that, with the price hike, the amount of profit didn’t decrease. I think where they’ll see the loss is in $.99 songs, in people outright boycotting the service or cutting down on their purchases or not knowing whether a song is going to be $.99 or $1.29, so they’ll go straight to another vendor where they can be sure (Sony really fucked Amazon in that way). Or they’ll just learn to use torrents or any of the other dozens of ways to find pretty much any song that’s ever been recorded for free.
It’s a knee to the groin of the people who have been keeping the industry afloat by acquiring things legally… the vaunted $.69 tracks are few & far between, hardly encouraging catalog sales.
The industry should collaborate on a textbook called “How not to do PR.”
I was going to mention the Coolfer article, which is on Billboard.biz, but Jon Cole beat me to it.
I am personaly taking 30 days off of I Tunes. I can not walk by an I Tunes card without buying it. I have hundreds invested to date and I am done. I urge people to follow. This is a crazy time to raise your prices 30%. I would not be writing this if there was a 10% hike, but come on.
I officially refuse to buy songs off of iTunes. $0.99 was already expensive for ONE song. It was absoltely rediclous to raise the prices.
Let’s boycott these greedy pigs!!!
I refuse to pay 30% more for the song, I am the only one in my circle that pays for music, all others download illegally, now I got to pay more?
Makes no sense.
No thank you, I will enjoy the new songs in youtube, and use the remainder of my money in itunes on 99 cent songs. I will not get any more credit, I feel it is outrageous to charge over $1 for a song.
Attention Steve Jobs:
I just wanted to express my disappointment with your recent rate hikes on certain songs. I was always skeptical about online purchasing of music, but your trademark 99-cent cap is what won me over. Now that it seems you have thrown that out the window, I will no longer be purchasing music through your medium.
Instead I will be joining the masses disappointed I tune users back to Best Buy and other music stores that have managed to stay afloat. I would rather not stick around to watch 1.29 rise to 1.49 than to 1.89 and so on. I may end up paying a little more in the end but it comforts me greatly to know I have a physical hard copy in my possession that can not be accidentally erased or is extremely difficult to transfer to a new computer when your old system is dying out. For what its worth, I did enjoy the convenience of the download however my experience with digital downloading is over. I will attribute this to the greed of the Beatles and their feeling that their crumby old music is worth more than a buck. It’s not.
Thank you,
David M