Amazon and Wal-Mart MP3 Stores Adopt Variable Pricing
The quiet price hike confirms that Apple's unofficial switchover date for variable pricing on its store is part of a larger move to raise prices across the industry. Concerns had been raised that the music industry might target Apple specifically after an initial comparison of prices this morning had suggested only iTunes was carrying the higher prices. Major music labels have publicly expressed a desire for such pricing after the emphasis on single downloads over albums, as well as plummeting CD sales, hurt the traditional music industry as a whole.Amazon, which had previously offered a standard $0.99 price point, is now offering approximately eight of its top 100 bestselling tracks at $1.29, with a handful of others priced at $0.79 and the vast majority still priced at $0.99. Wal-Mart, which had previously offered individual tracks for $0.94 and late last year began offering its top hits at $0.74, has also adopted a three-tiered model with $1.24, $0.94 and $0.64 price points. Approximately 15 of its Top 100 Singles are currently priced at $1.24.
As Seth Weintraub points out at Computerworld, tracks are not necessarily offered at the same relative price points across the different stores. Apple currently has a significantly greater percentage of its tracks priced at $1.29, with many of these same tracks still being offered at $0.99 (or even $0.79 in some cases) at Amazon or $0.94 at Wal-Mart, suggesting that Apple is receiving different pricing from the record labels than its competitors.
Sources at Apple tell me that Apple is getting different prices than Amazon from the recording idustry. The record companies are, and have been for awhile, favoring Amazon. In fact, Amazon is selling songs for less than the price that Apple pays for them in some cases.