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iTunes tiered pricing not a big hit in the first week

16 April 2009 23:31 by Rich "vurbal" Fiscus | 3 comments

In the first week after Apple rolled out their variable pricing model for songs from iTunes the results are mixed. The good news is that revenue is up slightly. Unfortunately it comes at the expense of track sales at the highest price point.

Total track sales were actually up for the week, as were sales of $0.99 songs. But the 33 tracks which were increased from $0.99 to $1.29 sold 12.5% few units than the previous week.

As a result, sales of songs in the top 100 rose significantly less than total sales.

If this trend continues, the obvious question is whether it's more useful to make more money per track or get your music on the hands of more consumers. This is where things get much more interesting.

Artists almost certainly benefit more from increasing the number of listeners. The labels, are probably best served by a higher profit margin per track, at least in the short term. And label executives don't exactly have a history of long term planning.

Permalink to this article | Topics: MP3 & Digital Audio Online music services

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Warner Music reports 17% revenue drop in second quarter (7 May 2009)

Label profit falls with new iTunes prices (7 May 2009)

EFF files lawsuit against Apple (28 April 2009)

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iTunes in Germany adds feature films (17 April 2009)

iTunes price change is hurting tracks (11 April 2009)

Amazon, Wal-Mart, raise MP3 download prices (9 April 2009)

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Discuss this article!
hermes_vb (Senior Member) 17 April 2009 14:35
I think it would be better to make money by mass consumption at a lower price. That way you reduce the attractiveness of Torrent when factoring in the legal implications. [ + quote]
jookycola (Member) 17 April 2009 17:40
Sorry iTunes. you lost me. I liked your business model and i have bought a ton of music there. But i'm now a straight torrent user now, thanks for pushing me away. goodbye. [ + quote]
hermes_vb (Senior Member) 17 April 2009 21:08
To be fair to Apple (can't believe I'm doing this), it's probably the idea of the recording industry, not Apple. They probably conceded after the industry allowed everybody but Apple to offer DRM free downloads. [ + quote]