Wednesday, April 8, 2009

iTunes rolls out variable pricing

Posted By on Wed, Apr 8, 2009 at 4:10 PM

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As promised, the iTunes music store has switched to a variable pricing model, where the more popular tracks are $1.29, others remain at $0.99, and back catalog files are now $0.69. All songs are also DRM-free, but as noted in Wired's Epicenter blog, this pricing change doesn't address a shift in consumer's behavior:

Although new prices will be a step in the right direction for many iTunes customers, they are a superficial fix for iTunes' real threat: that most consumers and even some artists think 69 cents per track is far too dear.

According to Nielsen SoundScan, paid downloads growth slowed last year, increasing 27 percent in 2008, where it increased 45 percent in 2007. Meanwhile, free streaming services accessed through web browsers and mobile apps are growing in popularity. Apple and the labels raising the prices 30 percent on popular songs and dropping them 30 percent on back catalog tracks won't help them compete with shifting consumer behavior.

With devices like the iPhone as well as other stream-ready cell phones and web-based services like Pandora, and others, it's easy to see how this pricing change could pass unnoticed and/or

It's also worth noting that the Amazon mp3 store remains at $0.99 per track.

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