Apple's iTunes to boost price of hottest songs to $1.29
In an economy where consumers are looking for lower, not higher, prices, Apple will attempt to break through the psychological barrier of the 99-cent per song price by moving the price to $1.29 on April 7 for hit singles and some classic tracks.
The date hasn't been announced by Apple, which has been notifying record labels of the date, according to industry executives interviewed in the Los Angeles Times. Some older or less-popular songs will drop in price to 69 cents.
Music companies have been pressuring Apple for years to raise the per song price on the latest hits, a move that Apple co-founder Steve Jobs had resisted, saying it would hurt sales. To make the move during a recession is odd timing. But as CD sales have been declining, the music industry is desperate to eek more money out of each digital music sale.
"It is for the music industry what the AIG bonuses are for the insurance industry," former EMI Music executive Ted Cohen, who is managing partner of digital media consulting firm TAG Strategic, told the Times.
Jim Guerinot, who manages such bands as Nine Inch Nails, No Doubt and Offspring, told the L.A. paper that the industry's pricing should be moving down, not up, to better compete with still-rampant music piracy. He doesn't see the sense of trying to squeeze more out of those willing to pay for their music.
Apple set the 99-cent-per-song rate in 2003 upon launching the iTunes Store. Then in January the seller of iPhones and MacBooks said it would begin selling music based on wholesale costs set by the labels, at three prices: 69 cents, 99 cents and $1.29.
Starting on Tuesday, April 7, Apple will find out if consumers speak out against the higher rate by putting away their wallets.