How the Music Industry Just Killed Itself. Again.
Monday, April 13, 2009 at 12:03AM 
Yes, iTunes changed its pricing on April 7th, and no, no one's very happy about it. Now as other music retailers like Amazon have followed suit, it's becoming clear(er) that the labels are behind this latest pricing change.
Music is their product, and they are free to price it as they wish. Consumers are then also free to weigh whether a 30% increase in a product's price is worth it, or whether their time is better spent searching for the song by other means.
Ironically though, it seems like having tiered pricing may have created a new headache, especially for the artists. Billboard has done some preliminary research, and it looks like in general, tracks on the top 100 chart priced at $1.29 have fallen in rank, while a majority of $.99 tracks have moved up.
What does it tell us? It means beyond musical sensibility, beyond the art behind the music, consumers are looking at the cold hard cost of buying a track. No artist should have to wonder whether it was a lack of public interest, or the pricing decision of the record label that led a track to fail or succeed. Just look at the app store to see how the price of apps has been driven lower, potentially at the cost of losing quality apps at a higher price point.
The industry has created a slippery slope, in which in six months time, we could see the charts dominated by those (now rare) $.69 cent tracks. When getting to #1 is more about the price of the track than the viability of the music, the industry loses. The end game is free tracks, and while that will be great for consumers, the record label execs can start packing their boxes now.
Music Store, iTunes, music industry, pricing Permalink
Reader Comments (13)
"Yes, iTunes changed it's pricing.."
"it's" is a contraction, the proper usage is "its pricing"; there's no apostrophe since "its" is the possessive form.
Grammar police are correct, and it has been corrected. Thanks for letting us off with a warning this time.
Now that would be hilarious if older tracks went to the top of the charts because they’re cheaper.
BTW, Grammar Police forgot to use real apostrophes which look like this ” ” instead of this "" .
I‘m just sayin‘
Whether or not this is a "good" thing for the labels actually depends on what economists would call the "price elasticity of demand." In normal person speak - "It's OK if sales decline." If the sales of the $1.29 tracks decline _less_ than 29%, then the labels will end up making more money. If they decline more than 30%, then they will have a net loss of revenue.
None of this takes away from the message of this post - by having variable pricing, we have made it difficult to determine if it's price or music quality that is driving sales.
(note: two uses of "it's" with correct use of the apostrophe)
There is no possessive form of it. It's, is a contraction meaning it is.
Sadly it appears that even though the numbers dropped for the higher priced tracks, it's not enough for their earnings on those tracks to actually go up. They are simply selling a few less for a lot more.
It's amazing that the record industry is trying to bring a supply and demand pricing model to a digitally distributed product. Will they never learn?
Hi Sloth & TDL,
You say that, "...we have made it difficult to determine if it's price or music quality that is driving sales," but you likely meant that it's the recalcitrant music labels foisting this on Apple, hence on us.
But it seems to me that music labels are not concerned about quality, except in relation to the bottom line: I.e., if it sells to cover costs, its quality could be better; If it sells and makes a bit of profit, it's quality is better; If it sells very well, the quality is very good; etc. Therefore, the multi-tiered pricing structure does not matter to the labels at all as a gauge to determine quality. It just matters if the music, whether derivative and ho hum or creative and awesome, sells enough.
Pardon me for using "it's" instead of "its." You see, my secretary....
Talk about biting the hand that feeds you. Record companies are so grateful....
Variable pricing makes sense.
To buy a 40-year-old track for the same price as a 40-day-old track is ludicrous.
A bunch of singles costs more than an album, and they should be priced that way.
However, the pricing for a non-manufactured piece of data over the internet should and will eventually be very low or run the risk of inducing piracy,.
Why is it ludicrous that a 40-day-old track could be the same price as a 40-year-old track? The Beatles never got any cheaper as time went on.
The way copyright has been geared by governments and big business, that is exactly what they want! You have this concept of only rewarding the artist for effort to create the track and then what? It should go into the public domain?
Please, that is a sentimental view of copyright. Today, suits ensure that artists will be driving their six-figure cars around Hollywood for TMZ. So pay up that extra 30 cents for Fifty Cent!
The record companies won't learn, they still think they control the market. All they've done is make a lot of money for indie artists, many which are much better than the stuff they try to peddle. Once iTunes fully throws open the doors to the indies, you will see a real drop in record company profits.
Now the broadband companies are starting to look at the same business plan. Mobilize now or pay through the nose for broadband! Spread the word!