iTunes price hikes: Still too soon to measure impact

iTunes price hikes: Still too soon to measure impact

Summary: It's only been a week since Apple altered the pricing structure on some iTunes tracks and already the data is being sliced and diced to see what impact, if any, the new prices had on sales.The takeaway from a first-week analysis by Billboard.

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It's only been a week since Apple altered the pricing structure on some iTunes tracks and already the data is being sliced and diced to see what impact, if any, the new prices had on sales.

The takeaway from a first-week analysis by Billboard.com: Sales are down; Revenue is up. And while a jump in revenue is a good thing, no one can say with any certainty that the drop in sales is related to the 30-cent price hike.

There are always other factors at work when you're dealing with music sales. Billboard notes that some of the sales shifts were "related to the timing of a release and had little to do with the price increase." The billboard analysis did offer examples where the pricing shift had an impact, specifically:

GS Boyz' "Stanky Legg" provides a good example of the impact of the price increase. In the weeks prior to the bump to $1.29, the track sold 22,424 and 22,686 units. Last week, after being raised to $1.29, sales dropped 12% to 19,692 units. Akon's "Beautiful" had a similar trajectory over three weeks, from 58,861 to 57,941 to 52,760.

Personally, I don't buy the argument that the drop was solely because of the pricing. Sure, there may have been some who chose not to buy because of the hike but I'd like to see examples of similar tracks - genre, target buyer and so on - and their sales performance metrics over the first three weeks of a release.

Just for laughs, let me throw in one other reason why I don't put too much value on a first-week analysis: Spring Break. I can only speak for myself and maybe my kids - but if I'm going to be on vacation for a week and possibly do some traveling, I might buy a few new tracks, load up the iPod with some fresh playlists and then stay away from the iTunes store until I come back from break.

I'm not saying my scenario played a role on iTunes sales, either. I only point it out to further drive home my point that, with other factors at play, it's took early to draw any solid conclusions.

Topics: Apple, Enterprise Software

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  • Sales Drop

    The sales drop may also be related to the buyers being preoccupied with spring activities (sports?), finishing school projects, trying to pay next semester's tuition, or trying to deal with taxes before the 15th.

    There are too many things happening right now to tell if the sales volume changes were due to the change in pricing or other factors.
    David Wilson
  • RE: iTunes price hikes: Still too soon to measure impact

    Wrote about this on my blog. http://digg.com/u11G9j
    nebben