September 25, 2005
../ Download Price Hike Imminent
Rumors of a rise in individual download prices on the
leading online music services surfaced again when Steve Jobs, Apple Computer's CEO, did some major whining to
the press that he was being pressured by several major labels to increase prices.
Jobs has insisted that an increase above the 99 cent
threshold would turn innocent, law-abiding legal downloaders into a pack of rabid dogs intent to only get their digital
music through illegal means. While he has a point, the online world knows that several other music services are
thriving selling downloads up to $2.99 each.
Beatport.com announced at the Billboard Dance Summit that they are selling 50,000 tracks per month at $1.99 each.
Jobs was particularly scratchy when speaking to the
press at the Apple Expo show in Paris. He reportedly called
the majors pushing for the increase "greedy" even though prices for individual songs are more expensive in
Europe and Asia. Warner and EMI are pushing for the hike while Universal Music appears content with the 99 cent
price point. Sony BMG declined to comment, but iTunes Japan launched without their catalog.
In the US, iTunes
accounts for over 80 percent of all legal downloads with 500,000 and counting to date.
The Future: Look for prices to increase to
$1.29 or $1.49 in 2006. The contracts with the major labels are up for renewal and while Jobs may persuade
some of the majors to remain at the 99 cent price point, others, notably Warner, will object. Even if Universal
signs on at 99 cents, they will certainly have a clause that gives them the right to increase the price if another
label renews at a higher rate.
Whether or not the download price does increase in 2006, it will not stem the sales of the high-flying, and very
profitable, Apple iPod line. And despite Steve Jobs' pubic sniveling about the price increase, the reality is...
...he could care less.
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