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Amazon matches Apple's $1.29 for top tracks while Walmart undercuts by a nickle

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.

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RE: News tomorrow: Piracy rates increase
By PrinceGaz on 4/8/2009 2:02:50 PM , Rating: 2
Yes. Higher pricing for legal downloads will inevitably lead to more piracy instead. Most people will only spend a finite amount on entertainment, and the less they get for what they spend, the less likely they are to spend it in the first place.

Far from increasing prices per track, they should reduce prices as most people would probably end up spending at least as much, and quite probably a bit more as they are getting better value for money.

RE: News tomorrow: Piracy rates increase
By nixoofta on 4/8/2009 5:52:23 PM , Rating: 2
That would be nice,(reduced prices), but I think that's too much to hope for from Apple, Amazon, Wally World, etc...

I think they're making up for losses due to the downturn in the economy. If I was losing my house, Apple/Ipood music bill would be one of the first luxuries to go.

I think a lot of these corporations literally "bank" on predicted sales. The money they were expecting to make has already been spent and they're scrambling to make up for it. Then again my foil hat does seem a little tight. :P

By Bateluer on 4/8/2009 7:50:09 PM , Rating: 2
No, you're right. Politicians do it all the time.

Fact of the matter is, raising prices nearly always also drives sales down in the long term. It'll result in a short sales spike out the gate, then it drops off fast.

Things you don't do in a recession are raise prices and raise taxes. Particularly in this recession, since the bulk of it is caused by consumers being too nervous to spend money. Sounds like a brilliant business move, make things cost more. That'll boost sales.

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner
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