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$1.29 songs dropping on iTunes charts

updated 03:40 pm EDT, Fri April 10, 2009

1 29 iTunes Songs Falling

The institution of variable song prices on iTunes has directly translated to a decrease in the popularity of the more expensive songs, Billboard finds in a short-term study of the immediate wake of the change. Those songs that were boosted to a $1.29 price typically fell 5.3 places on iTunes' Top 100 charts on Wednesday and another 2 places on Thursday. In exchange, those songs that kept their 99-cent pricing rose an average of 2.5 spots on Wednesday and 1.7 on Thursday.

In some cases, the changes were enough to push certain songs off the chart altogether. How 69-cent songs have been affected isn't clear, though these are usually older or less popular titles that are unlikely to chart.

The music charting organization notes that the price increases don't automatically translate to lost revenue for labels but that it doesn't necessarily take a steep drop in unit numbers to swing to a loss. A 23.3 percent loss in the number of songs sold is enough to nullify the advantage of a price increase.

A similar study has yet to be conducted on other stores that have also agreed to variable pricing in return for protection-free songs, such as Amazon and Walmart.

With less than a week of sales, the long-term effect of the price cut has yet to be determined. Billboard also warns that other factors can affect the songs' positions. However, the initial results appear to support views that variable pricing is more likely to deter single-track sales of popular songs.



By Electronista Staff
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  1. Peter Bonte

    Fresh-Faced Recruit

    Joined: Aug 2001

    +1

    Market

    Maybe Apple has a secret plan. Direct competition lowered the general price in the Appstore to $0,99, allowing variable pricing in iTunes could lower the price to gain in billboard rating.

    There is no supply vs demand pricing because there is infinite supply, a lower price will make them more money in volume or so we hope. Soon we'll see new singles at $0,69 and the back catalog $0,99

    On a side note, 1 cent is a perfect price for a song on a P2P distribution, we do all the work and the labels only have to count the dollars.

  1. bfalchuk

    Fresh-Faced Recruit

    Joined: Jul 2003

    +12

    Short Sighted

    This isn't surprising. The record labels just can't seem to get it, and stay super-short-sighted. For me, knowing I could get a track for $0.99 meant that I never really questioned it. I went and bought it legally and easily. Now, I'm not sure what it will cost, so I have to go look and think about it if the price isn't $0.99. That is enough time for me to talk myself out of the purchase or think about, um, alternative acquisition methods. Cough cough.

    Really, record execs, you consistently cut off your nose to spite your face. For once in your industries history, wake up and take advice from people who get. You can be angry with Steve Jobs or think he has too much power, but he was right, and so were the others who followed the fixed price purchase model. Subscriptions never worked, and variable pricing never worked. You're all about to see your only hope get crippled.

    Nicely done!

  1. gambit-7

    Fresh-Faced Recruit

    Joined: Feb 2001

    +3

    Nice gambit, Apple

    By allowing price increases to take place, Apple was willing to bet that exactly this happened: lower priced songs faired better, and appears to have sold more. Let's hope the recording industry is paying attention. Just because they can sell at 1.29 doesn't mean they should.

  1. Makosuke

    Forum Regular

    Joined: Aug 2001

    +10

    Wrong Analogy

    Re: bfalchuk:

    They're not cutting off their nose to spite their face, they're complaining about the food on the rescue helicopter that picked them up and threatening to jump out and find a quieter rescue boat because they're so important one is bound to come. This after the iceberg they were sitting on that they insisted would never melt did.

    I'm not actually sure this will bear out over the long run, but it would be kind of awesome if they ended up crippling their own profits this way. Either that or just driving artists away from them entirely so they can set their own price on iTMS and elsewhere.

  1. chas_m

    Moderator

    Joined: Aug 2001

    +2

    Goose. Golden Egg.

    Memo to the record companies: you're killing it.

    Now, many of us (including me) will cheer when the last soulless conglomerate record company shutters. But I'm sure the model is to hurt a lot of artists and others on the way down, and I don't look forward to that, so here's a secret clue:

    Reinvent yourselves as production companies, or die.

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    +6

    shock! horror!

    Stop the press! "Cheap" is more popular than "expensive"!! Who knew?

    Welcome to the real world, record company dickheads.

  1. Salty

    Professional Poster

    Joined: Jul 2005

    0

    new commercial...

    I see a new commercial coming. Mom and son go shopping for music, they look around on iTunes listening to clips so they can figure out what they wanna buy, in the end they decide that Britney Spears song sounds cool but that extra 30 cents just doesn't seem worth it, so they're gonna go with a 99 cent Switchfoot track! And guess what it's a 99 cent song!

    Btw thankfully none of the artists I like are on the billboard for the most part, so they're all still at 99 cents. I had to put out some effort to find a 1.29 cent song because most of those seem only to be on artists I turn the radio off for.

  1. lamewing

    Dedicated MacNNer

    Joined: Aug 2004

    0

    Too bad

    Too bad everyone doesn't boycott the $1.29 songs.

    Hey, at least you don't buy much of your music on iTunes Japan where the songs cost 150 to 200 en (yen) each. Currently, that is $1.50 to $2.00 a song, but it is still cheaper than importing the music, unless you buy the entire album.

    The BIG problem with iTunes Japan is they have not switched over to 100% DRM-free music. Only a small portion is iTunes Plus. But, until iTunes U.S. carries a full selection of Jpop, many of us don't have a choice.

    :P

  1. CreepDogg

    Mac Elite

    Joined: Jun 2001

    +3

    Economics 101

    Wow. So the concept of a 'demand curve' holds true. Whod've thunk?

  1. carloblackmore

    Fresh-Faced Recruit

    Joined: Dec 2005

    0

    next dumb step?

    If this decline continues (and it will), you'd think the next logical step would be to either discontinue the variable pricing or to increase the quality of the $1.29 tracks (artist photos, media or lyrics). Who wants to bet that the record companies blame this on Apple somehow and think up an even dumber solution to their problem like increasing the price even more to make up for the drop-off in sales??

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