Rich Fiscus
16 Apr 2009 23:31
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.