Jari Ketola
7 Apr 2004 14:44
While Apple iTunes, Roxio's Napster and other online music stores are still offering a lot of single track downloads at 99 cents a piece, and full albums at $9.99, the prices on new releases have already went above the prices of new CDs.
For instance N.E.R.D.'s new album Fly or Die costs $16.99 at iTunes, and $13.99 at Napster. For comparison you can purchase the album on CD for $13.49 at Amazon.com.
The driving force behind the changes to the price structure are the five major record labels that provide the licenses to online music stores. The single track download prices on hot new releases might be boosted to anywhere from $1.25 to $2.49 per song. Some labels are very eager to lift prices, while the others realize that at the current stage raising prices would make little difference in revenues, but would definitely drive customers away rather than lure them in to explore new technologies.
One has to hope that the record industry has the patience to let the industry grow, and maybe even try and find ways to offer discounts and great deals to loyal customers. It doesn't take an analyst to predict that a 150 per cent increase to prices would deal a huge blow on the sales. And it doesn't take a legal expert to see the blame eventually being cast on peer-to-peer networks and Internet music piracy.
Source: NJ.com