Apple Goes to Variable Pricing, Amazon Now A Better Deal

By  |  Tuesday, April 7, 2009 at 9:31 am

ituneslogoWell, it happened. iTunes instituted variable pricing early Tuesday, and the effects are already rippling through the online music store. Five of the top 10, and eight of the top 25 songs now cost $1.29.

One thing we’ve still been unable to locate? Those 69-cent tracks. Nowhere to be found — maybe we’re missing them? But I guess if we’re looking at things overall, the price increase isn’t as widespread as some may have thought.

The price hike certainly opens up the door to Amazon MP3. All songs on that store are still 99 cents, but this could be more a function of a different expiration date on that store’s contract with the record labels. Then again, this could be a veiled trick to push all of us to music stores other than Apple in an attempt to break iTunes dominance.

Record labels have made it no secret that they aren’t happy that Apple is pretty much the only game in town when it comes to digital music.

In any case, Amazon MP3 is showing signs of life. While iTunes had a 87 percent share of the market in 2008, its competitor has managed a 16 percent share, the best showing so far for anybody according to NPD data.

Amazon’s music store is having a good deal of success with the older crowd, so the company may find it prudent to begin targeting this demographic a little heavier in an attempt to gain some more share.



5 Comments For This Post

  1. tced Says:

    I have another term for variable pricing: higher prices. The recording industry has been plotting higher prices all along. They used to have a “minimum price” – the price of a CD. Then they got talked into track prices. Not a happy situation for them.
    I am old enough to remember track pricing in it’s previous form – 45 rpm records. I even remember going to the music store and being able to listen to them in small booths!

  2. Greg Says:

    I think you saw a good example of that with the U2 release that was what, $3.99 on Amazon for the whole album? I think they have the flexiblility to make more surgical strikes like that that will definitely keep me coming back and can siphon off some my apparent Apple tithing.

    Still though, high price or not, it’s still signifigant for others to compete with iTunes’ path of least resistance. Until Amazon figures a way around that, they will remain a distant 2nd.

  3. Randall Says:

    Richard Baguley and I just had a conversation about this over on TechVi.

    He had an interesting point that basically this cuts the real-world value of iTunes gift cards by 30%, and people who didn’t capitalize on their gift cards ahead of time are essentially screwed.

  4. pond Says:

    Amazon is also tiered pricing, .79 to 1.29 – is this true? Did they change right along with Apple? Does that mean Amazon is following the market leader, or that this is all being controlled by the major record labels?

  5. Kelsey Says:

    The increase will only lead to an increase of pirating. Seriously, why would someone pay 1.29 when they can easily download the music for free somewhere else. I agree that the music industry needs to find a different way to turn a profit, but doing this only allows the technologically savvy youth to fit through the loop holes. Nice try, industrious Goliath, but don’t pull Apple iTunes down with you. (Amazon, Wal-mart, etc have raised their prices as well, or so I read…) I found a video that gathers opinions from major nat’l and international media outlets…some good, some bad, but all HONEST!

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  1. So Much for Cheaper Music on Amazon. | Technologizer Says:

    […] Well, it didn’t take very long for the other music stores to follow suit after iTunes’ price hike Tuesday. By late evening, both Amazon and Wal-Mart had simarily raised prices on some of their top […]