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Apple Wins iTunes Pricing Battle
Techtree News Staff, May 02, 2006 1716 hrs ISTThe verdict is out - Apple Computer will continue to sell songs through its iTunes Music Store at 99 cents apiece.
The verdict is out - Apple Computer will continue to sell songs through its iTunes Music Store at 99 cents apiece. The company has confirmed renewing of contracts with four big record companies to arrive at this decision.
The agreements have come after months of bargaining, and are being seen as a defeat of sorts for music companies that have been so far pushing for a variable pricing model.
The bone-of-contention has been on one hand the music industry wanting to put-in-place differential pricing, while Apple on the other insisting that prices remain uniform. At one point the debate looked like Apple would be forced to introduce multiple price points for its iTunes downloads.
However after months of negotiations, Apple has emerged the winner with the declaration that prices of songs on iTunes will remain at 99 cents per track.
The "big four" comprising Universal, Warner Music, Sony BMG, and EMI North America tried to convince Apple to change the price and adopt a variable pricing scheme but in vain. Moreover, during the last few months, the officials of the four companies made a lot of statements to the effect that old records should be priced at 60 to 80 cents while new tunes should be around $1.20 per song.
Steve Jobs, chief executive officer, Apple Computer, had earlier dubbed the music industry as "greedy," and had been insisting on a flat-rate price as a method to keep customers away from peer-to-peer and illegal file-sharing services.
Jobs had also contended that prices need to be low enough on legal music downloads to compete with illicit file-sharing networks, where users can essentially download music for free.
All said and done, the latest agreement is being viewed more as a defeat for music labels as they struggle to retain control of the online music industry, which is quite visibly dominated by Apple and its tunes...
Related News:
Apple Refuses to Blink over iTunes
The agreements have come after months of bargaining, and are being seen as a defeat of sorts for music companies that have been so far pushing for a variable pricing model.
The bone-of-contention has been on one hand the music industry wanting to put-in-place differential pricing, while Apple on the other insisting that prices remain uniform. At one point the debate looked like Apple would be forced to introduce multiple price points for its iTunes downloads.
However after months of negotiations, Apple has emerged the winner with the declaration that prices of songs on iTunes will remain at 99 cents per track.
The "big four" comprising Universal, Warner Music, Sony BMG, and EMI North America tried to convince Apple to change the price and adopt a variable pricing scheme but in vain. Moreover, during the last few months, the officials of the four companies made a lot of statements to the effect that old records should be priced at 60 to 80 cents while new tunes should be around $1.20 per song.
Steve Jobs, chief executive officer, Apple Computer, had earlier dubbed the music industry as "greedy," and had been insisting on a flat-rate price as a method to keep customers away from peer-to-peer and illegal file-sharing services.
Jobs had also contended that prices need to be low enough on legal music downloads to compete with illicit file-sharing networks, where users can essentially download music for free.
All said and done, the latest agreement is being viewed more as a defeat for music labels as they struggle to retain control of the online music industry, which is quite visibly dominated by Apple and its tunes...
Related News:
Apple Refuses to Blink over iTunes
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