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Cell Carrier to Take On iTunes Music Store
Wednesday, December 14th, 2005 at 11:45 AM - by Staff
Amp'd Mobile plans on matching prices at the iTunes Music Store, even if it means selling music at a loss, according to Forbes. The cell phone service provider, which focuses on young consumers with a taste for digital content, will sell its songs for US$0.99, just like Apple, but it will be paying music labels about $1.25 for those tracks.
Currently, Sprint Nextel is the only carrier providing over-the-air music downloads to cell phones, and it charges $2.50 per song, hitting users with a $1.50 premium for downloading directly to their phones. Peter Adderton, Amp'd CEO, disagrees with that pricing scheme, commenting "I think it's ludicrous to think you can sell a track at $2.50 when everyone else is selling it at 99 cents."
If Amp'd is successful, it will breath life into cell phone-based music download market, which isn't performing well in the United States, compared to the iTunes Music Store.
Amp'd is expected to roll out its service with songs from EMI Group, Warner Music Group, and Universal Music Group. Sony BMG and Bertlesmann have yet to sign on, instead favoring a sliding scale for song prices.
Big label music companies have been trying to push for a sliding price structure for the iTunes Music Store, but Apple is resisting. Since Apple is the top dog in the digital music download arena, its pricing is the standard.
Mr. Adderton noted "I don't think that we can price music above the market, and right now Apple has set the market."
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