iTunes Moves Forward with Variable Pricing, Amazon Follows

Jake Smith is a TuneCore Customer Support Representative and Editor of the Weekly Newsletter

As some of you may have already seen, iTunes now has variable pricing for invidual tracks.  I spoke about this in a discussion piece posted two weeks ago (iTunes Going DRM Free), however I was under the impression this change would not occur until June (my apologies). For those of you who do not know, iTunes is now offering individual tracks at three different price points;  $0.69, $0.99 and $1.29.

The freedom to price individual tracks differently is something record labels have fought for ever since iTunes opened shop in 2001.  In exchange for the store making its content DRM free, the labels finally got their wish. Take a look at the top 100 songs in iTunes and you'll see about half have already increased to $1.29.

An important note for all TuneCore users who have music for sale in iTunes:  at this time, TuneCore does not have the ability to change individual track prices.  Unless specified otherwise, all individual tracks will remain at $0.99.  We will soon be able to give all users the ability to set individual track tiers for iTunes prior to delivery, so please stay tuned for more announcements.

Amazon, the second highest selling store after iTunes, rolled out a similar $1.29 price tier, however at this time fewer than 10 tracks in their top 100 are priced at this level.  This article from engadget shows a side by side comparisson of current prices in iTunes vs. Amazon.

This sudden shift leads me to wonder - will the iTunes price change lead to a dramatic shift in the market share of these online retailers, or will label pressure force the other stores to follow Apple's lead?  Share your thoughts!

Comments

[Quang Ly]

My feeling tells me that it won't change much. If it does, then probably more for the better since it is free publicity for iTunes during this change. I think the 99 cent pricing was a good run since the user doesn't have to judge the price value for the song. It is like going to a $1 store. The pricing doesn't matter. It only matters if you want it. Now, if the pricing stores to fluctuate dramatically like say $5, now, the user has to spend time contemplating the value of the item. 99 cents is a price for impulsive buy. But then again, who really knows. We can only see how the numbers go and adjust our strategy accordingly..

[Duncan]

We also need the ability to adjust pricing AFTER delivery to iTunes and Amazon. Reducing old tracks below the price of new releses in order to incentivize their purchasing is essential.