Warner sees slower sales growth after pricing change
Warner Music Group has revealed that unit sales growth on the iTunes Store has decelerated since the move to a variable pricing scheme. AllThingsD reports that industry-wide, year-over-year “digital track equivalent album unit growth” was 5% in the December quarter, down from 10% in the September quarter and 11% in the June quarter. As iTunes makes up the majority of Warner’s digital revenue, growth is slowing in that metric, as well, with digital revenue up 8% year-over-year in the December quarter, compared with a 20% growth rate in December 2008. Warner CEO Edgar Bronfman Jr. said that music downloads are a “mature” business, and that the pricing change has been a “net positive” for the label, but also suggested that, looking back, the move to raise prices wasn’t the best idea during a time of recession. Apple announced the move to a variable pricing scheme, under which individual tracks are sold for $.69, $.99, or $1.29, in January 2009, although the changes didn’t take hold until April 2009.
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