Variable Pricing Slows Digital Music Sales

Feb 9th, 2010 | By | Category: Technology

Ever since the recording industry convinced Apple to introduce variable pricing into its iTunes store, online music sales have slowed. The change from a flat 99 cents price point to a variable scale ($1.29 to 69 cents) made the labels happy but turned buyers away.

A 30% increase in prices during a recession didn’t make much sense even though Warner Music group CEO Edgar Bronfman, Jr. says it has been a “net positive” for his firm. Go figure.

Warner saw year-over-year increases shrink from 11 percent in June to 10 percent in September to 5 percent in December.

According to All Things’s Digital’s Peter Kafka, “The counter here is the one that seems obvious to everyone else: Lower prices and you can sell more stuff.”

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