$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.
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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.