Labels To Explore Variable iTunes Pricing
April 3, 2006 at 10:04 AM (PT)
APPLE COMPUTER's iTUNES MUSIC STORE has charged 99 cents for single song downloads since its inception three years ago. But now, the NEW YORK TIMES reports that some labels feel "hamstrung" by the uniform pricing policy as they begin a new round of music licensing discussions with APPLE.
IPSOS INSIGHT Digital Music Analyst MATT KLEINSCHMIT told THE TIMES, ''The labels really want to be able to boost up the price for downloads on new releases. The question is, are we at a time now that we want to experiment with variable pricing?'' The labels currently make approximately 70 cents per download, according to the article.
While APPLE and the labels declined to comment for the story, comments previously made by both sides indicate that a dispute has been brewing for months, and that it has been exacerbated by several consumer lawsuits, as well as government investigations into possible price-fixing by the labels.
Last fall, WARNER MUSIC GROUP CEO EDGAR BRONFMAN, JR. called for APPLE to allow different download prices for songs, and also give the labels a cut of iPod sales. EMI CEO ALAIN LEVY concurred, saying that releases by top-selling bands should be priced higher, while tracks by lesser-known artists should be discounted -- reflecting the same approach to wholesale pricing for CDs and products.
JOBS, arguing that record companies already make more profit by selling a song through iTUNES than on a CD, responded, "So, they want to raise the prices, it just means they're getting a little greedy.''