Digital music stores are where the glut of music sales come from today, much to the chagrin of the record industry. In the heyday of the industry, sales of physical formats like CDs and tapes were big money, but today's digital tracks are low margin leaving the record companies with a fraction of the profits they previously enjoyed.
The leader of the digital music revolution and the largest music retailer around is Apple's iTunes Store. Yesterday, DailyTech reported that Apple had moved to the tiered pricing model that had been expected. The tiered pricing was in response to the record labels wanting more control over the pricing of songs on the popular music store according to some reports.
With iTunes being the clear leader in the digital music industry, it comes as no surprise that the smaller players in digital music follow Apple's lead. Such is the case with the new iTunes pricing structure. Amazon and Walmart have both now increased the price of some of the songs in their digital catalogs to the same level as Apple.
Electronista reports that as of today, both Amazon and Walmart have introduced a tiered pricing structure. Ten of the top 100 songs on Amazon increased in price to the same $1.29 per track as iTunes. On the Walmart digital music store, the top price for popular tracks is now $1.24 per song.
Amazon and Walmart also followed Apple's lead by reducing the price of some tracks in the digital libraries. Select Amazon songs now sell for 79 cents while Walmart sells some select tracks for 64 cents. Electronista says that the Apple hike and subsequent price increases on two of the other major digital music stores highlights that the digital music industry is raising prices across the board.
What isn’t clear at this point is if the record labels have demanded a larger cut of sales from digital tracks or if the digital music retailers have simply decided to squeeze more out of their customers.
quote: What isn’t clear at this point is if the record labels have demanded a larger cut of sales from digital tracks or if the digital music retailers have simply decided to squeeze more out of their customers.
quote: None of these guys are making any money off of music sales, and WalMart may very well be losing money via loss-leader pricing.
quote: Most of the time the songs are written for them...