iTunes price hikes lead to lower unit sales, revenues

Charles Starrett
By Charles Starrett  - Senior Editor

Three weeks after the introduction of variable pricing on the iTunes Store, labels are seeing lower unit sales for both $.99 and $1.29 songs.

Citing sales numbers from Nielsen SoundScan, Billboard reports that out of the Top 100 tracks, the 67 that remained at $.99 sold a total of 29% fewer units than they did the week before the price increase, resulting in a 29% drop in revenue, while the 33 songs that were raised to $1.29 saw an aggregate drop of 34.5% in unit sales, for a 14.7% decline in revenue.

Billboard suggests that while the $1.29 tracks generated $43,000 in “extra revenue” than they might have if they sold the same number of units at $.99, Digital Music News has cited numerous sources, including executives within the major labels, as saying that overall revenues are moving downward, as unit sales are dipping far enough to produce aggregated revenue declines.

Charles Starrett
By Charles Starrett Senior Editor
Charles Starrett was a senior editor at iLounge. He's been covering the iPod, iPhone, and iPad since their inception. He has written numerous articles and reviews, and his work has been featured in multiple publications.