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Is variable pricing the key to online music sales?

Written by Rich Fiscus (Google+) @ 13 Jul 2007 22:03 User comments (12)

Is variable pricing the key to online music sales? The success of newcomer Sara Bareilles is being partly attributed to iTunes offering her album for download at a discounted price of $6.99 instead of the usual $9.99.
A week after iTunes launched a new discount section on their site called "The Next Big Thing" which included Bareilles' album among other releases. Around 14,000 ownloads from the site accounted for around 80% of her total sales. By comparison, albums from Paul McCartney and the White Stripes sold around 16,000 digital copies during their first week of release earlier this year.

As music sales have moved online from traditional brick and mortar stores, music labels have complained that if iTunes would adopt a variable pricing model it would help boost industry sales. Judging from iTunes' results, including a 152% spike in sales of Atlanta rapper Unk's several month old album, they may have a point.

While labels themselves are popular targets for blame regarding sales figures, it's reasonable to believe that nearly all aspects of the fledgling online music business have room for improvement in the coming years.

Source: The Wall Street Journal

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12 user comments

113.7.2007 23:50
webe123
Inactive

As long as the sale price is BELOW the regular price, that would be a good thing.

But what the music industry tried to strongarm Steve Jobs to accept a few years ago, was to let THEM determine what artist was more popular and therefore RAISE the price on that artists song. Which would have killed the itunes store sales.

Steve Jobs flat out refused and they could not make him, because they already signed a contract with him to sell all of their tunes on the itunes store for 99 cents each.

So it all depends on why you want to change the pricing...are you wanting to raise or lower the price?....because if you raise the price...you just dig a grave for yourself if you are the itunes store.

Too many other choices today and the music industry had better get used to playing ball with the consumer for a change!

214.7.2007 5:07
hughjars
Inactive

A fair and reasonable price for the level of quality is what it's all about.

If we carry all the production & distribution overheads (ie the hardware for burning the disc, the media to burn it to and the costs net connection) then it's only right the costs are levelled accordingly.

But if they're going to try charging stupid sums for 60kbps garbage then forget it.

The net price has to be well below the regular CD retail pricing.

......and they can forget attracting any serious sized market if they're going to shove their DRM cr@p into it too.

314.7.2007 5:46

good for iTunes

414.7.2007 6:59

its simple the lower it is the better it sales sony is finding that out the hard way,of coarse sheeple are more than happy to pay more for stuff than they should,corporations know it and are more than willing to raise prices to get more moeny.

The music indutry needs to understand some profit is better than none at all.

514.7.2007 15:04

still doenst address the issue of the crappy quality drm files you get from them. even if it were free i wouldnt use the service... until they start having some lossless flac downloads, or v0 mp3s at least, im sticking with what works...

614.7.2007 21:57
webe123
Inactive

Originally posted by ZIppyDSM:
The music indutry needs to understand some profit is better than none at all.

Too bad I don't know any hackers! ZippyDSM...That quote needs to be plastered on the front of the RIAA homepage!!

715.7.2007 17:12

$6.99 bull$hit smells just as bad as the $9.99 flavors. What is so superior about the cheaper version if it still stinks?

816.7.2007 8:31
hughjars
Inactive

Originally posted by windsong:
$6.99 bull$hit smells just as bad as the $9.99 flavors.
- Exactly and it's that kind of greedy idiocy that just makes sure no-one listens.

916.7.2007 13:41

thats weird there is an article here about sara bareilles. she went to my school and used to sing the anthem at the football games and stuff. its such a small town here, that i grew up knowing most of her family.

weird to see her mentioned on a site that i frequent. she is blowing up pretty huge

1017.7.2007 16:51

Well if pricing is different and the music is worth it and the good music is cheaper then yes it will eventually be better for the music industry.

1121.7.2007 20:09

Quote:

Originally posted by hughjars:

Originally posted by windsong: $6.99 bull$hit smells just as bad as the $9.99 flavors.

- Exactly and it's that kind of greedy idiocy that just makes sure no-one listens.


It's the Star System guys.This is how it works nowadays.If i.e. Beyonce sells 200.000 CDs say the first days and Cardigans sell say 2000 then it's obvious what the music companies will choose.Of course,this happens because serious artists aren't promoted from the beginning so...we are here.

Quote:
The music indutry needs to understand some profit is better than none at all.
Indeed smart,ZippyDSM :-D.

1218.8.2007 11:49

When does the original contract withe iTunes and the RIAA expire?

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