iTunes song price hikes, drops coming April 7
Apple will begin to offer variable pricing on songs sold through the iTunes Store beginning April 7, according to a new report. Citing music industry executives, the LA Times reports that while the date has yet to be officially announced by Apple, the company has been informing record labels that the change will go into effect on that date. Apple announced in January that it would be moving to a pricing model where tracks sold for either $0.69, $0.99, or $1.29, based on the wholesale cost set by the labels; in return, Apple was able to secure DRM-free music from all three remaining holdout labels.
Despite the DRM-free nature of the more expensive downloads, some music industry insiders are criticizing the move, particularly in the current economic climate. “This will be a PR nightmare,” said former EMI Music executive Ted Cohen, who is now managing partner of digital media consulting firm TAG Strategic. “It is for the music industry what the AIG bonuses are for the insurance industry.” Jim Guerinot, who manages several groups including Nine Inch Nails, No Doubt and Offspring, said that raising pricing was the wrong move if the industry hoped to compete with still rampant music piracy. “Wouldn’t it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?” Guernot said.
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