iTunes Raising Prices in Face of Competition

by Tim Stevens on March 29, 2009 at 04:50 PM

iTunes Raises Price in Face of Competition

iTunes, now the world's largest music retailer, is under fire from many competitors, including Amazon's amazonmp3 service, which sells most popular tracks for $.99, but also offers plenty of other tracks at $.79 or less. So how does Apple respond to this pressure? Why, by raising prices on some tracks $.30, naturally.

Starting April 7, Apple will raise the prices of a number of its hottest tracks to $1.29 as part of a new "variable pricing" strategy that will allow music publishers to sell tracks at various price points. Hiking costs probably won't make many fans among consumers but there is at least some good news: Publishers can also sell tracks for less than $.99, which may open the door for smaller artists to get a little more traction in a very busy online store.

What remains to be seen is whether iPod, iPhone, and other iTunes users will stomach the price hike, or just start shopping somewhere else for the same tracks -- especially when "somewhere else" is usually just a few clicks away. [From: Los Angeles Times]

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Tags: amazon, apple, apple itunes, AppleItunes, business, iphone, ipod, itunes, music, online music, OnlineMusic, retail, shopping

Comments

BryanMar 29th 2009 5:04PM

Neutral

I stopped shopping at iTunes a while ago. Now that I see this I'm glad I did.

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RobMar 29th 2009 6:40PM

Neutral

Apple would be wiser to keep its prices unchanged and increase some level of service. I don't know what exactly, but do something so that customers value you. Look at airlines. They all fought to cut costs and lower prices and where are they now? Apple of all companies should realize that people will pay premium prices if they feel the product and service are worth it. Maybe that's part of their new tactic?

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KarlWMar 30th 2009 4:27AM

Neutral

No. Apple's got the biggest music store, they didn't need to change their tactics.

This is because the record labels are trying to stop Apple's dominance of digital music. They're trying to bolster competitors like Amazon's service. They tried making Amazon's service DRM free and making that an exclusive feature to Amazon's service, but that didn't work. Now they're giving iTunes and AmazonMP3 the same product, but forcing Apple to make their service more expensive.

Consumers may not understand DRM, but they do understand cash. By renegotiating contracts to make iTunes more expensive, they're trying to cripple it.

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Level 5Mar 29th 2009 7:46PM

Neutral

Shopping at iTunes has NEVER EVER been an option for me. I listen to mainly either electronic music (I produce and DJ), and alot of classic and 90's rock. So for the electronic stuff I go to Beatport for 320kbps and WAV purchases, and for the CD's I might want, well.. in this case, it's cheaper to get a CD from a used record shop, rip it in the format and quality I CHOOSE, and then file it. Almost every online retailer is guilty of this; only providing one format. Everyone might say the CD is dead but it's a baseline HQ format that allows me to rip the PMP of my choice in the format that either the PMP requires or that I choose. They need to get on the WAV/FLAC/ALAC tip and fast.

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Mobile Phone DivaMar 29th 2009 11:09PM

Neutral

I'm with you about CD ripping! Still the best option out there to guarantee quality files!

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SteveMar 29th 2009 11:23PM

Neutral

Wasn't the tiered pricing the compromise that Apple had to give to the record companies in order for them to switch to all DRM free on iTunes?

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Mobile Phone DivaMar 29th 2009 11:39PM

Neutral

I read something like that too, but why only for iTunes then? Amazon is still $.99 and still DRM free.

Was it the music industry being heavy handed because they know they still get more sales though iTunes? Although I think they're shooting themselves in the foot by enforcing a price increase on iTunes since Amazon is just a click away. That's a good way to lose sales on their best vehicle.

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SilverFoxMar 30th 2009 12:42AM

Neutral

I hope (and I will be one) who walks away from this egregious inflationary scam... heck, of late you can't even download music from the iTunes store as it repeatedly says there is an "error 11111) and you should try again later... like 24 hours or more and they're still having "access problems". My guess is that some of the numbskull staff assigned to watch the servers are off watching NCAA March madness and could care less about the unhappy customers (go look at the blog... there's more than a few). And, forget about getting a response to your email complaint/inquiry... iTunes/Apple staff don't have the least interest in customer service. I hope they lose their shirts and any other clothing by customers who are fed up with their half-bassed, take-it-or-leave attitude.

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psycrosMar 30th 2009 3:27AM

Neutral

Yeah, not the wisest of moves. While the Apple faithful will pay exorbitant prices for that fruity logo, iTunes probably gets ten times more business via Windows and iPhones than it does from Mac users. Funny how the record industry leans hardest on those who make them the most money. Kind of like the government.

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GalleyMar 30th 2009 8:16AM

Neutral

Prices for catalog title tracks will be 69 cents. That's a good thing, because those same catalog title CDs sell for $5.00 - $8.00 at Amazon.

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iTuneshaterApr 17th 2009 10:18PM

Neutral

I use to buy ALL my music from iTunes. By them raising prices i will no longer EVER buy a song from them... I dont care they have cheaper old songs no one wants those we want the new songs. It was the biggest digital music store and now I really hope iTunes stuggles to continue selling songs. Hopefully Apple will see this has caused them to lose tons of business. With the economy the way it is people are not going to pay even more they will just download it illegally. iTunes THIS IS CRAP!

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aliceApr 19th 2009 8:34PM

Neutral

i can't afford even $.30 more. in this economy they were lucky to even be getting $.99 per song. Riasing the price is going to make them lose even more customers, including myself. This is a dumb move on itunes part and they will soon find that out. All of my friends have decided not to buy from itunes any more just because of that price hike. There are other places to get music, especially when itunes doesn't even have some very decent songs...some clasic some undiscovered...

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