The Big Think

November 17, 2005

Say Bye To .99 Pricing

Filed under: Macintosh — jasony @ 2:49 pm

Slashdot is reporting that Apple’s iTunes Music Store will go to staggered pricing next year.

…flat fee pricing will end within the next 12 months, and more popular songs will be priced higher than 99c, while lesser known acts will be priced lower than .99.

3 Comments »

  1. This is a good thing. I’ll bet dollars to donuts that the songs you actually want to listen to will be less expensive. When’s the last time you walked into a record store and found every album on the shelf marked at $14.99?

    Comment by Patrick Watts — November 17, 2005 @ 5:20 pm

  2. Insofar as it lets pricing be influenced more by the whole supply/demand dynamic it’s a good thing. However, I’m not convinced that that’s what’s really happening here. Coming from a new media/distribution perspective, it’s been my experience that record lables tend to agree to deals like Apple’s $.99 pricing structure as test cases just to insure a presence in whatever new distribution channel is opening up. If things work out, they earn some unexpected revenues and establish a channel presence. If the new distribution scheme fails, then they haven’t lost much.

    iTunes had the good luck/audacity to actually succeed, so now the music industry is doing what it planned to do all along: act like the 800 lb. gorillas that they are and demand a bigger slice of the pie once they smell more money to be made.

    Personally, this strikes me as biting the hand that’s been feeding them. The old system wasn’t “broken” by any reasonable standards (consumers were buying lots of songs; everybody was making lots of money, etc.), so why strongarm Apple to re-negotiate terms? Good, old-fashioned greed if you ask me.

    Even more significant is the precedent that this sets for Apple. Over and over, Apple has demonstrated that they know how to build extremely successful consumer value propositions and pricing models. But this deal screams that if a partner pushes back hard enough Apple will cave and let companies with much less impressive track records dictate the terms of their offerings. I don’t see how this can be a good thing.

    Comment by Tim — November 18, 2005 @ 9:00 am

  3. When?

    Comment by Giles Bateman — November 19, 2005 @ 8:38 pm

RSS feed for comments on this post.

Leave a comment

You must be logged in to post a comment.

Powered by WordPress