iTunes’ variable-pricing strategy only makes sense when $1 is the limit
April 1, 2009
Good idea: charging music bought via the Internet. Bad idea: jacking up those prices as much as 30 percent.
Apple Inc., developer of iTunes, recently announced plans for a “variable-pricing” strategy, which will be the first stray from the 99-cents-per-song business model in use since the store’s debut in 2003. The new model will adopt three pricing rates come April 7: 69 cents, 99 cents and $1.29.
Even though the cheaper option is somewhat relieving to people who enjoy buying music, it is difficult to imagine exactly who would be willing to pay the extra 30 cents for songs they could steal for free.
It’s a well-documented fact that music made available via digital download will sell. At the current rate, digital music sales will surpass CD sales by 2012, according to a Feb. 2008 study conducted by Forrest Research, Inc. But is Apple getting a bit ahead of itself? I admire iTunes and its adaptation to modern, piracy-first times, but making users pay more isn’t going to increase purchases or even keep them on a similar plane. Not in this economy; it just doesn’t make a lot of sense.
Granted, this is the price of a single song on iTunes, not the cost of an entire album. Most LPs will likely cost around $9.99 or less, which is still a bargain. But during a recession, when people have a hard time scraping together money for the necessities let alone the newest single from Lady Gaga, that $1.29 price tag becomes the subject of much discussion.
I enjoy buying music when I have the money. There is just something morally fulfilling about knowing I am doing my part to save a dying industry — similar to, ahem, picking up a newspaper in the morning. Yet for every well-to-do music lover out there who does get something out of buying his or hers MP3s, I’d assume there are 10, 100 or 1,000 who do not. And raising the price on a good number of those songs isn’t going to do anything to change the minds of those who download for free.
What Apple and its ever-expanding iTunes program are doing is noble for paying customers — the 30-cent price cut on some tracks, especially. Anything beyond the 99-cent arc, however, is simply too much to make an impact in today’s world, especially when other big-box music sellers such as Amazon still maintain their dollar-per-song fees. While continuing to charge for music is responsible, overcharging just isn’t a good idea.