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News
Hesseldahl: ‘Why Apple Won’t Up-Charge Downloads’
Wednesday, September 28th, 2005 at 3:00 PM - by Brad Cook
BusinessWeek's Arik Hesseldahl writes in his latest "Byte of the Apple" column: "Record execs are clamoring for price flexibility in music downloads, but Steve Jobs is adamant that 99 cents per song is perfect. The war of words that erupted last week ... served to drive home how much the music industry has changed, and how much its executives still have to learn about what those changes mean."
Last week, Warner Music CEO Edgar Bronfman responded to Mr. Jobs' comment that the record industry is "greedy" for wanting to raise iTunes Music Store prices by saying: "There's no content in the world that doesn't have some price flexibility. Not all songs are created equal. Not all albums are created equal."
Mr. Hesseldahl looks at the variety of pricing found in other media, such as books and magazines, and notes that "in principle, Bronfman may be right." And while Mr. Jobs believes that higher prices will mean a return to illegal music downloading for many consumers, the columnist points to research conducted by Ipsos/Insight that shows consumers would be willing to pay as much as US$1.29 per song.
However, Mr. Hesseldahl sees the iPod nano as "Apple's knockout punch." He expects the company to dismiss the idea of more iTunes-capable cell phones and keep its focus on the iPod. And with Apple gobbling up a large piece of the available flash memory, it will be "difficult for competitors making flash-memory-based players that work with other music services to get their products on the shelves this holiday season," he writes.
That turn of events will further solidify Apple's already-entrenched position, giving Mr. Jobs the upper hand and leaving the record industry unable to push through a price increase. "Jobs will get what Jobs wants," writes Mr. Hesseldahl.
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