Apple has long stood by the simplicity of the flat, $.99/track pricing scheme. The system has frustrated the record labels who insist that digital pricing should fluctuate like the price of actual CDs, even though the idea behind cut-rate CDs is to move inventory that’s not selling. Apple budged a little from flat-rate orthodoxy when it adopted $1.29 DRM-free tracks, and now it’s set to give in some more.
WSJ: The changes, many of which could be unveiled during a speech Tuesday at the Macworld Conference & Expo in San Francisco, include a change in the way Apple prices its songs. Apple has historically priced nearly all its songs at 99 cents each. Under a new pricing plan, songs would cost either 69 cents, 99 cents or $1.29, depending on how desirable they are considered. Apple is likely to sell the “vast majority” of the songs for 69 cents, these people said. But they cautioned that the handful of the most sought-after songs—which generate the vast majority of sales on the service—would likely cost $1.29.
This isn’t the first time variable pricing based on popularity has been tried on the web. That’s the core model behind New York startup Amie St. and AmazonMP3 has gained fans with its daily rotation of cheap albums. Today, for example, you can get the brand-new album from singer-songwriter Erin McCarley for just $1.99 –normal price $7.99 (we’ve never heard of her either, which might explain the price).
The labels will be happy that they got a shift in pricing strategy, but it’s not going to produce major results for them anytime soon.