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Label profit falls with new iTunes prices

7 May 2009 7:57 by Rich "vurbal" Fiscus | 11 comments

The major record labels spent 5 years convincing Apple to sell hit music for a premium price in the iTunes store. Nearly a month into the new pricing scheme, which lowers the price of some songs to $0.69 while raising others to $1.29, hasn't been the cash cow label executives expected.

The problems seemed to begin immediately after the new pricing scheme was introduced. Although the number of songs sold jumped, it wasn't an across the board increase.

In fact, sales of tracks priced at $1.29 actually fell. Fortunately for Apple, revenue from sales at the lowest tier were enough to make up the difference, resulting in a net gain.

According to Digital Music News the labels haven't been quite so lucky. They are reporting label revenue under the new price scheme has actually dropped.

If the trend continues it would seem the labels have managed to accomplish the exact opposite of what they wanted. Their chief complaint about iTunes, almost since its inception, has been that it gives Apple too much power in the market.

At least for now, giving in to label demands appears to have increased that power.

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

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Discuss this article!
ivymike (Member) 7 May 2009 8:07
You reap what you sow, ya pigs. [ + quote]
voltRis (Newbie) 7 May 2009 10:17
oh, I am SO shocked. [ + quote]
Clownzill (Newbie) 7 May 2009 11:10
Do these media labels think that they are SO powerful that they can defeat the natural laws of economics. [ + quote]
emugamer (Member) 7 May 2009 11:50
Good for them. It's about time the fat cats came down a waist size. http://www.rbr.com/media-news/advertising/14147.html [ + quote]
Pride1 (Member) 7 May 2009 15:30
Is this the part where we are supposed to feel bad for the record companies? [ + quote]
ThePastor (Junior Member) 7 May 2009 16:54
*Quote:* Their chief complaint about iTunes, almost since its inception, has been that it gives Apple too much power in the market. We're talking about a world that can take rank amatures, polish them up a bit and sell them off as "American Idols"... and they're worried that Apple has too much power? The only one who should have power is the ARTIST and the FANS... everything else is just bull [ + quote]
bam431 (Junior Member) 7 May 2009 20:43
corporate pigs serves them right getting to greedy [ + quote]
ripxrush (Junior Member) 8 May 2009 3:02
If you are or are not into country music a newer John Rich song "Shutting Detroit Down" Comes to mind! Apple is not my fav, they do have a good product, the music tho, these record execs don't do shit it is the musicians! These execs live in multi-million $ homes when their workers (secretary & such) prolly get jack! SCREW THEM! Even if you don't like country ya gotta listen to the song! It is great. I think this is funny as hell! [ + quote]
Mez (Senior Member) 8 May 2009 9:24
This is another amazing news flash. Prices go up, so sales go down. Most everyone has already invested in a DRM remover so no DRMs have no value for most of the public. The reason they removed the DRMs is because they know everyone has a DRM remover. Plus it is a good excuse to up the insainly high priced music another 20%. I am surprized they didn't cut to the chase and make the tunes 2 bucks. [ + quote]
autolycus (Newbie) 8 May 2009 15:25
how does apple achieve too much power? (which is funny coming from the possibly the greediest group out there, minus bank execs). Any other company can come in and offer something else at a better price, but the problem is the Music industry would never allow it. This is so funny, the deserve every penny lost. Unfortunately, we all know that people will get fired and the execs/manaagement will keep their pay, get their bonuses and actually get a vacation that is more then 3 days.... [ + quote]
loubat (Junior Member) 9 May 2009 0:35
Somebody please remind me again why I'm supposed to pay $1.29 for a lossy audio file??? When they finally realize that mp3's at ANY bitrate aren't worth more than $0.50 (maybe for a v0, certainly not for a 192 or 128) maybe they'll see some real profits. Currently we're still paying CD prices for audio files that are half the quality. That's simply not going to fly with "the masses." [ + quote]