LA Times reports that apple will start charging $1.29 per song for some of the songs.
The world’s largest music store, Apple’s iTunes, plans to boost the price of many hit singles and selected classic tracks to $1.29 on April 7, breaking the psychological barrier of 99 cents in what could be the first big test of how much consumers are willing to pay to download individual songs.
Although the date for higher prices has not been publicly announced, Apple has been notifying record labels it will go into effect on that date, industry executives said.
The move, part of a new “variable-pricing” strategy that will also lower the price of selected songs, is an attempt by the music industry to wring more revenue from digital downloads in the battle to offset declining CD sales. Label executives contend the new pricing will allow them to offer packaged downloads of songs that might entice consumers to spend more on music.
Some music industry veterans are criticizing the 30% hike price, saying the timing is tone deaf because it comes in the midst of a recession and at a time when spending for online music appears to have reached a plateau.
“This will be a PR nightmare,” predicted former EMI Music executive Ted Cohen, who is managing partner of digital media consulting firm TAG Strategic. “It is for the music industry what the AIG bonuses are for the insurance industry.”
This will be a major shift in apple’s strategy which so far resisted variable pricing saying it will introduce more friction in the buying process. If this variable pricng used to introduce bundling as some labels seem to be hoping, this move may backfire. It would be interesting to see how music fans will take to this new pricing scheme.