After Apple announced earlier this year that it would give in to the music industry’s demands for variable pricing on iTunes, the new price model will finally debut on April 7.
From that date on, tracks will be priced at 69 cents, 99 cents and $1.29 depending on their popularity, with the hottest, newest songs costing more than $1. Nothing’s been announced yet, but the LA Times claims Apple has been telling record labels that the new prices will go into effect on that date.
The music biz has been demanding these changes for years, insisting song downloads should be priced like CDs, which would also help them increase revenue as digital downloads are becoming a bigger part of recorded music sales.
But industry veterans already tell the LA Times that raising song prices during a recession and when digital music sales have plateaued is a bad move:
“This will be a PR nightmare,” predicted former EMI Music executive Ted Cohen, who is 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 such bands as Nine Inch Nails, No Doubt and Offspring, said the industry’s pricing was moving in the wrong direction if it 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?” he said.
Indeed, variable pricing already exists on iTunes competitor, Amazon’s MP3 store, but Amazon’s prices don’t go over 99 cents per track. Time will tell whether consumers will want to spend more than $1 to buy a new song. But now that there are so many cheaper, and legal, ways to hear that same song for less money (including free, via on-demand streaming services like Imeem), we wouldn’t be surprised if many iTunes consumers start looking elsewhere for a better deal.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.