Apple to launch 'variable-pricing' for iTunes
It appears that Apple has finally caved to the pressures of the recording industry. According to a report in the Los Angeles Times, Apple will introduce variable pricing for digital music on the iTunes Music Store starting April 7, raising the price of the hottest and most popular tracks to $1.29.
Apple itself hasn't announced the pricing change publicly but recording industry sources told The Times that Apple has been notifying labels of the changes, which would also include lowering the prices on less popular tracks.
For some time, Apple had resisted the "variable-pricing" model. As the leader - and some might argue the pioneer - of legal online music distribution, Apple maintained the upper-hand against the labels, which have been watching CD sales plummet in the age of digital tracks.
The recording industry has been beaten down over the years. It's been fighting, lobbying and practically begging Apple for more flexible pricing while, at the same time, filing lawsuit after lawsuit to battle digital piracy, a move that proved to be a public relations nightmare.
Most recently, the Recording Industry Association of America said it will cease filing lawsuits and will engage the Internet service providers to assist them in cracking down on illegal music sharing, a move that hasn't been any more popular. Bottom line: customers not happy about the iTunes price hike should think carefully before heading back to underground music sharing sites.
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The Times report notes that the new prices would also free Apple's tracks of DRM restrictions, which would allow buyers to make unlimited copies and play the songs any any device, not just the iPod.
It's unclear whether this price change is the result of the recording industry finally convincing Apple to give its model a try or if it has anything to do with the comfortable position that Apple holds in the digital music business. Competitor after competitor has tried to unseat the mighty team of iPod and iTunes. Even the best have failed. All the while, iTunes has grown even more, adding movies, TV shows and now add-on apps for the iPhone and iPod Touch into the store, making it easy for consumers to visit, browse and shop in the iTunes store.
In this economy, a price hike was almost inevitable.