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News

Apple May Restructure iTunes Pricing

Wednesday, November 16th, 2005 at 12:30 PM - by

EMI Music feels Apple will change the iTunes Music Store (iTMS) pricing structure within a year, according to the Wall Street Journal. EMI speculates that Apple will raise the price of popular songs, and lower the price of less popular songs and performers.

Alain Levy, EMI's chief executive officer, stated that his company has been discussing the issue with Apple, and believes Apple is ready to change its pricing structure. Mr. Levy commented "There is a common understanding that we will have to come to a variable pricing structure. The issue is when."

Apple has not commented on the EMI statements.

Apple's iTMS pricing is currently set at US$0.99 per song, with most albums priced at $9.99. Videos sell for $1.99.

[This article has been updated to site the original WSJ story, instead of the MarketWatch story.]

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mahuti said:

member since 09 Jan 2003 with 377 posts, TMO Staff , send him a message or view his profile

Wed Nov 16, 2005 1:45 pm

I won't be too upset if crappy songs get lower prices. Based on the music I tend to listen to, it could be a boon for me. Its going to suck if I have to spend $20 to buy my wife the next Kelly Clarkson album though.

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macinnerd said:

member since 15 Jun 2005 with 1748 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 1:48 pm

Heh. Notice that it's EMI who said all that. It's still very likely that nothing will happen.

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A guest said: (hide)

Wed Nov 16, 2005 1:50 pm

If SJ gives in on this, he better get some concessions from the labels, such as,

higher bit encoding rate and re-downloading.

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MonkeyT said:

member since 29 Nov 2001 with 78 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 1:56 pm

A record label says Apple will inevitably do what the record labels have so far unsuccessfuly begged Apple to do. Yeah. That makes it true. I understand now.

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fartheststar said:

member since 04 Jan 2004 with 222 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 1:58 pm

If it does happen, they have to still undercut the price of a CD, or I'll go back to buying and ripping CDs

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 2:03 pm

Steve's a smart guy. I don't think he's gonna concede something without getting something in return.

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jesten said:

member since 22 Aug 2005 with 2 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 2:08 pm

It will work for me. I'll save money downloading. I can't imagine the music I listen would go up in price. How ever my wife would break the bank if prices go up.

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motobike_man said:

member since 09 Aug 2005 with 4 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 2:11 pm

If the record compainies get away with this I might go to bittorrent.

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fo said:

member since 23 Aug 2005 with 39 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 2:26 pm

Funny that this story appears on the same day another is reporting flat growth in downloads.

I suspect the record companies would like to see iTunes fail, and be replaced by a rental-type of arrangement. iTunes was a welcome relief when they were concerned with piracy, but now that they're aggressively pursuing the PTP networks, they may be thinking that iTunes will lose them money in the long run. The future of media is rental-based, and Apple stands in the way. Unless, of course, they go to a rental model with iTunes.

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked , send him a message or view his profile

Wed Nov 16, 2005 2:56 pm

Why do some people still claim to the hope of song rentals? It should be clear that that avenue is on the decline (see movie rental sales declining steadily over the past 2 years) versus iTMS continuous growth.

I think it is certainly feasible to think that once current contracts between Apple and the major labels are up for renewal, we will see a change in terms of current sales.

But most of them signed 3 year deals with Apple, something they wish they'd not done now, except look where it has gotten them. They've stemmed the tide of pirated downloads to a large degree, though not 100%, they are still making money (albeit not at their desired level of revenue. Heck, my income isn't my desired level of revenue either!), and the public awareness of digital downloads is at an all time high, just like the sale of iPods.

Their biggest problem is they're peddling crap. And the market has had enough of the crap. It's saturation time for what's available. They spit out too much of it too fast and the technology has allowed consumers to get satiated at a much faster rate. If I NEVER hear another Mariah Carey song again, I'll be very, very happy. Or Britney, or either Simpson girl.

SJ will allow a model change...gradually...to allow for higher prices on premium downloads. The problem is who is subjectively deciding what is a premium download? Their premium may last about 2 months before everyone is burned out on it. Kind of like Hoobastank. Overplayed.

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